Tax handling
Account management
This page discusses features principally used when DriveWealth’s Account Management product is enabled. Partners managing customers on their own won’t have these workflows available.
During the customer onboarding process, DriveWealth utilizes the information sent through the create User request to generate either a W9 or W-8BEN tax form. This process happens automatically and requires no additional input or validations by you or the user.
Customer filing status | Forms |
---|---|
Domiciled or Citizen of the US, or US Resident Alien | W9 |
All other customers | W-8BEN |
Tax forms on file are stored as Physical Documents and can be retrieved from that API.
Non-Resident Dividend Tax
When a customer receives a dividend, if they are not a US customer, an amount of that dividend will be withheld and paid to the US IRS based on that customer’s country of tax residency.
For example, if the following dividend gets paid to a customer based in the United Kingdom:
{
"finTranID": "GL.b0043e24-117d-4429-82dd-9b23ea82ef74",
"finTranTypeID": "DIV",
"accountAmount": 30.43,
"accountBalance": 280.43,
"comment": "BPY dividend, $0.3043/share",
"instrument": {
"id": "476b40ee-3ff9-46af-85af-fec572d13d23",
"symbol": "BPY",
"name": "Brookfield Property Partners L.P."
},
"dividend": {
"type": "CASH",
"amountPerShare": 0.3043,
"taxCode": "FULLY_TAXABLE"
},
...
}
A subsequent Transaction will be posted to the Account noting the following tax withholding:
{
"finTranID": "GL.ddf3fd42-c62e-4cd1-a0c6-6dcfe046be97",
"finTranTypeID": "DIVTAX",
"accountAmount": 4.56,
"accountBalance": 275.87,
"comment": "BPY tax, 15% withheld",
"instrument": {
"id": "476b40ee-3ff9-46af-85af-fec572d13d23",
"symbol": "BPY",
"name": "Brookfield Property Partners L.P."
},
"dividendTax": {
"type": "FOREIGN_TAX",
"rate": 0.15,
},
...
}
Publicly Traded Partnership (PTP) Withholding
DriveWealth supports IRS-compliant withholding for U.S.-listed Publicly Traded Partnerships (PTPs) under Section 1446(f) of the Internal Revenue Code.
For non-U.S. persons holding PTPs—such as certain master limited partnerships (MLPs)—DriveWealth automatically handles the 10% withholding on gross proceeds from sales.
The Account Transactions API will have a PTP_WITHHOLDING
transaction created for orders in scope.
[
{
"accountAmount": -10.21,
"accountBalance": -12349.91,
"accountType": "LIVE",
"comment": "PTP WITHHOLDING IRS TAX ON SELL 5.59791552 shares of BSM at 18.23",
"dnb": true,
"finTranID": "KK.10ab0bf7-80c0-436b-a957-c4de6f838bb9",
"finTranTypeID": "PTP_WITHHOLDING", //PTP FEES NOW PRESENTED IN TRANSACTIONS
"feeSec": 0,
"feeTaf": 0,
"feeBase": 0,
"feeXtraShares": 0,
"feeExchange": 0,
"fillQty": 5.59791552,
"fillPx": 18.23,
"instrument": {
"id": "9ad10471-feee-4369-9c9a-87db904bfa5a",
"symbol": "BSM",
"name": "Black Stone Minerals, L.P."
},
...
},
...
]
The Retrieve Order API will have a ptpWithholdingFee
showing the amount withheld.
{
"id": "KK.faf8a431-ae8a-43a3-89a1-52aea4b6f3d8",
"orderNo": "KKXP000471",
"type": "MARKET",
"side": "SELL",
"status": "FILLED",
"symbol": "BSM",
"averagePrice": 18.25,
"averagePriceRaw": 18.25,
"totalOrderAmount": 273.48,
"cumulativeQuantity": 14.98520547,
"quantity": 14.98520547,
"amountCash": 273.48,
"fees": 0.02,
"ptpWithholdingFee": 27.35, //PTP FEES NOW PRESENTED IN ORDER DETAILS
"orderExpires": "2023-11-03T20:00:00.000Z",
...
}
The ptpWithholdingFee
field appears on the orders.completed events as well.
{
"id": "event_899a7391-57a7-4577-***",
"type": "orders.completed",
"timestamp": "2023-11-03T15:17:07.340258117Z",
"payload": {
"id": "KK.faf8a431-ae8a-43a3-89a1-52aea4b6f3d8",
"orderNo": "KKXP000471",
"type": "MARKET",
"side": "SELL",
"status": "FILLED",
"symbol": "BSM",
"averagePrice": 18.25,
"averagePriceRaw": 18.25,
"totalOrderAmount": 273.48,
"cumulativeQuantity": 14.98520547,
"quantity": 14.98520547,
"amountCash": 273.48,
"fees": 0.02,
"ptpWithholdingFee": 27.35, //PTP FEES NOW PRESENTED IN EVENTS
"orderExpires": "2023-11-03T20:00:00.000Z",
...
}
}
Current list of Securities subject to PTP withholding tax.
Symbol | CUSIP | ISIN | Description |
---|---|---|---|
ET | 29273V100 | US29273V1008 | ENERGY TRANSFER L P COM UT LTD PTN |
EPD | 293792107 | US2937921078 | ENTERPRISE PRODS PARTNERS L P COM |
MPLX | 55336V100 | US55336V1008 | MPLX LP COM UNIT REP LTD |
IEP | 451100101 | US4511001012 | ICAHN ENTERPRISES LP DEPOSITARY UNIT |
PAA | 726503105 | US7265031051 | PLAINS ALL AMERN PIPELINE L P UNIT LTD PARTN |
MMP | 559080106 | US5590801065 | MAGELLAN MIDSTREAM PRTNRS LP COM UNIT RP LP |
ARLP | 01877R108 | US01877R1086 | ALLIANCE RESOURCE PARTNERS L P UT LTD PART |
AB | 01881G106 | US01881G1067 | ALLIANCEBERNSTEIN HLDG L P UNIT LTD PARTN |
NGL | 62913M107 | US62913M1071 | NGL ENERGY PARTNERS LP COM UNIT REPST |
BSM | 09225M101 | US09225M1018 | BLACK STONE MINERALS L P COM UNIT |
CEQP | 226344208 | US2263442087 | CRESTWOOD EQUITY PARTNERS LP UNIT LTD PARTNER |
USAC | 90290N109 | US90290N1090 | USA COMPRESSION PARTNERS LP COMUNIT LTDPAR |
GEL | 371927104 | US3719271047 | GENESIS ENERGY L P UNIT LTD PARTN |
GLP | 37946R109 | US37946R1095 | GLOBAL PARTNERS LP COM UNITS |
NS | 67058H102 | US67058H1023 | NUSTAR ENERGY LP UNIT COM |
SUN | 86765K109 | US86765K1097 | SUNOCO LP/SUNOCO FIN CORP COM UT REP LP |
CQP | 16411Q101 | US16411Q1013 | CHENIERE ENERGY PARTNERS LP COM UNIT |
UAN | 126633205 | US1266332055 | CVR PARTNERS LP COM |
SPH | 864482104 | US8644821048 | SUBURBAN PROPANE PARTNERS L P UNIT LTD PARTN |
DCP | 23311P100 | US23311P1003 | DCP MIDSTREAM LP COM UT LTD PTN |
WES | 958669103 | US9586691035 | WESTERN MIDSTREAM PARTNERS LP COM UNIT LP INT |
SMLP | 866142409 | US8661424098 | SUMMIT MIDSTREAM PARTNERS LP COM UNIT LTD |
WLKP | 960417103 | US9604171036 | WESTLAKE CHEM PARTNERS LP COM UNIT RP LP |
HEP | 435763107 | US4357631070 | HOLLY ENERGY PARTNERS L P COM UT LTD PTN |
DMLP | 25820R105 | US25820R1059 | DORCHESTER MINERALS LP COM UNIT |
DKL | 24664T103 | US24664T1034 | DELEK LOGISTICS PARTNERS LP COM UNT RP INT |
CAPL | 22758A105 | US22758A1051 | CROSSAMERICA PARTNERS LP UT LTD PTN INT |
FUN | 150185106 | US1501851067 | CEDAR FAIR L P DEPOSITRY UNIT |
SPLP | 85814R107 | US85814R1077 | STEEL PARTNERS HLDGS L P LTD PRTRSHIP U |
GHI | 02364V206 | US02364V2060 | GREYSTONE HOUSING IMPACT INVES BEN UNIT CTF |
CLMT | 131476103 | US1314761032 | CALUMET SPECIALTY PRODS PARTNE UT LTD PARTNER |
GBLI | 37959R103 | US37959R1032 | GLOBAL INDEMNITY GROUP LLC COM CL A |
Ongoing tax documentation
Throughout the lifecycle of an account, tax documents are generated as a result of activity incurred and taxes withheld by DriveWealth. All tax forms are calculated based upon the US tax season which is between January 1st, and December 31st.
Generally before the end of February, all tax forms are submitted by DriveWealth to the IRS for processing and acceptance. The day in which end of year forms are made available to end customers varies each year:
Initial form filed | End of year tax document | Availability time |
---|---|---|
W-9 | 1099-Composite | March |
W-8BEN | 1042-S | April |
Not all customer accounts receive an end of year tax form. To understand if a customer qualifies for a tax form generation they must meet the following thresholds:
- Interest and Dividends exceeds $10, or
- There were sell side transactions throughout the year that exceeded $20, and
- The account is not a tax-advantaged account (e.g. a retirement account)
Review the Official documents section to learn how to retrieve these files.
W-8BEN information updates
The IRS requires that a customer updates their W-8BEN every 3 years, after the date of account creation. To facilitate the change in information, DriveWealth makes available two methods:
- A hosted website: DriveClient
- The User API
- The
user.inforequired.created
Event
The primary points of information that need to be either confirmed or changed include:
- Full Legal Name
- Address
- Tax Identification Number
Events & DriveClient
After subscribing to the user.inforequired.created
event, partners should notify the relevant customer to update the above information or in some cases upload a document when the user.inforequired.created
event is generated. . This can be done all via the DriveClient.
After this information is submitted DriveWealth will automatically generate a new tax document on behalf of the customer. A taxform.created
will automatically be generated upon completion of the generation.
Updated about 14 hours ago