Tax handling

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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 statusForms
Domiciled or Citizen of the US, or US Resident AlienW9
All other customersW-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 ptpWithholdingFeeshowing 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.

SymbolCUSIPISINDescription
ET29273V100US29273V1008ENERGY TRANSFER L P COM UT LTD PTN
EPD293792107US2937921078ENTERPRISE PRODS PARTNERS L P COM
MPLX55336V100US55336V1008MPLX LP COM UNIT REP LTD
IEP451100101US4511001012ICAHN ENTERPRISES LP DEPOSITARY UNIT
PAA726503105US7265031051PLAINS ALL AMERN PIPELINE L P UNIT LTD PARTN
MMP559080106US5590801065MAGELLAN MIDSTREAM PRTNRS LP COM UNIT RP LP
ARLP01877R108US01877R1086ALLIANCE RESOURCE PARTNERS L P UT LTD PART
AB01881G106US01881G1067ALLIANCEBERNSTEIN HLDG L P UNIT LTD PARTN
NGL62913M107US62913M1071NGL ENERGY PARTNERS LP COM UNIT REPST
BSM09225M101US09225M1018BLACK STONE MINERALS L P COM UNIT
CEQP226344208US2263442087CRESTWOOD EQUITY PARTNERS LP UNIT LTD PARTNER
USAC90290N109US90290N1090USA COMPRESSION PARTNERS LP COMUNIT LTDPAR
GEL371927104US3719271047GENESIS ENERGY L P UNIT LTD PARTN
GLP37946R109US37946R1095GLOBAL PARTNERS LP COM UNITS
NS67058H102US67058H1023NUSTAR ENERGY LP UNIT COM
SUN86765K109US86765K1097SUNOCO LP/SUNOCO FIN CORP COM UT REP LP
CQP16411Q101US16411Q1013CHENIERE ENERGY PARTNERS LP COM UNIT
UAN126633205US1266332055CVR PARTNERS LP COM
SPH864482104US8644821048SUBURBAN PROPANE PARTNERS L P UNIT LTD PARTN
DCP23311P100US23311P1003DCP MIDSTREAM LP COM UT LTD PTN
WES958669103US9586691035WESTERN MIDSTREAM PARTNERS LP COM UNIT LP INT
SMLP866142409US8661424098SUMMIT MIDSTREAM PARTNERS LP COM UNIT LTD
WLKP960417103US9604171036WESTLAKE CHEM PARTNERS LP COM UNIT RP LP
HEP435763107US4357631070HOLLY ENERGY PARTNERS L P COM UT LTD PTN
DMLP25820R105US25820R1059DORCHESTER MINERALS LP COM UNIT
DKL24664T103US24664T1034DELEK LOGISTICS PARTNERS LP COM UNT RP INT
CAPL22758A105US22758A1051CROSSAMERICA PARTNERS LP UT LTD PTN INT
FUN150185106US1501851067CEDAR FAIR L P DEPOSITRY UNIT
SPLP85814R107US85814R1077STEEL PARTNERS HLDGS L P LTD PRTRSHIP U
GHI02364V206US02364V2060GREYSTONE HOUSING IMPACT INVES BEN UNIT CTF
CLMT131476103US1314761032CALUMET SPECIALTY PRODS PARTNE UT LTD PARTNER
GBLI37959R103US37959R1032GLOBAL 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 filedEnd of year tax documentAvailability time
W-91099-CompositeMarch
W-8BEN1042-SApril

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:

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.