IRS Pushes Back Some FATCA Compliance Dates

The U.S. Internal Revenue Service (IRS) and the U.S. Treasury have moved back several of the key compliance dates for the Foreign Account Tax Compliance Act (FATCA).

Under FATCA, certain U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS. FATCA will also require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The key provisions of FATCA that affect credit unions are the requirement to file Form 1042-S for payments of dividends or interest in the amounts of $10 or more to nonresident alien members and conduct due diligence regarding whether credit union members’ payments to overseas Foreign Financial Institutions (FFIs) are to FFIs that are not FATCA compliant.  Credit unions would have to withhold 30 percent of any funds transferred to non-FATCA compliant FFIs.

While the reporting requirement on the 1042-S remains unchanged, the withholding requirement has been pushed back to Jan. 1, 2017.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

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