How are capital gains taxed for ITIN holders?

Tax treatment depends on residency status. Non-resident aliens pay 30% withholding on US-source dividends (reduced by treaty) but generally do not pay US tax on capital gains from stock sales unless they are present in the US for 183+ days during the tax year. Resident aliens (who elected to file as residents) pay the same capital gains rates as US citizens: 0% for income under $47,025, 15% for $47,026-$518,900, and 20% above $518,900.

What is Form 8949 and do ITIN holders need to file it?

Form 8949 (Sales and Other Dispositions of Capital Assets) reports every stock sale including purchase date, sale date, cost basis, proceeds, and gain or loss. ITIN holders who are resident aliens must file Form 8949 with their Form 1040. Non-resident aliens generally do not need Form 8949 for stock sales because capital gains are typically not US-taxable for non-residents. Totals from Form 8949 transfer to Schedule D.

How are dividends taxed for ITIN holders?

US-source dividends paid to non-resident aliens are subject to 30% withholding at the source. Tax treaties reduce this rate: UK 15%, Canada 15%, Germany 15%, India 25%, Japan 10%, Australia 15%, China 10%. The brokerage automatically withholds the applicable rate based on your W-8BEN. Qualified dividends for resident aliens are taxed at preferential capital gains rates (0%, 15%, or 20%). File to claim treaty benefits and refunds.

What is Form W-8BEN and why do ITIN holders need it?

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner) tells the brokerage you are a non-resident alien and claims any applicable tax treaty benefits for reduced withholding on dividends and interest. Every non-resident ITIN holder must submit W-8BEN to their US brokerage. The form is valid for 3 years and must be renewed. Without a W-8BEN, the brokerage withholds 30% on all dividends regardless of treaty eligibility.

Can ITIN holders open margin accounts for stock trading?

Yes. Interactive Brokers and Charles Schwab offer margin accounts to ITIN holders who meet minimum requirements. Interactive Brokers requires a $2,000 minimum for margin. Margin accounts allow short selling, options trading, and leveraged positions. Pattern Day Trader rules apply if you make 4+ day trades in 5 business days, requiring a $25,000 minimum balance. Approval depends on trading experience and account size.

Do ITIN holders pay tax on cryptocurrency trading gains?

Cryptocurrency is treated as property by the IRS per Notice 2014-21. For non-resident aliens, crypto gains are generally not US-taxable unless the activity constitutes a US trade or business. For resident aliens filing with an ITIN, crypto gains are reported on Form 8949 and taxed at capital gains rates. Exchanges like Coinbase and Kraken issue Form 1099-MISC or 1099-B for US-based users. See our ITIN for cryptocurrency guide for details.

How do you report stock losses on your ITIN tax return?

Capital losses offset capital gains dollar for dollar. If your total losses exceed gains, you can deduct up to $3,000 of net losses against ordinary income per year ($1,500 if Married Filing Separately). Excess losses carry forward to future tax years indefinitely. Report losses on Form 8949 and Schedule D. The wash sale rule prevents deducting a loss if you repurchase the same or substantially identical stock within 30 days before or after the sale.

What are the reporting thresholds for stock trading accounts?

Brokerages report all stock sales to the IRS on Form 1099-B regardless of amount. Dividends over $10 are reported on Form 1099-DIV. Interest over $10 is reported on Form 1099-INT. Non-residents receive Form 1042-S instead of 1099 forms. Additionally, ITIN holders with foreign financial accounts exceeding $10,000 at any point during the year must file FinCEN Form 114 (FBAR). Accounts over $50,000 may require Form 8938 (FATCA).

Can ITIN holders trade options and futures?

Yes. Interactive Brokers is the primary platform offering options and futures trading to ITIN holders. Options require account approval based on experience level (Levels 1-4). Futures trading requires a separate futures account and typically a $10,000+ balance. Options and futures have different tax treatment: Section 1256 contracts (most futures and broad-based index options) are taxed at a blended 60% long-term / 40% short-term rate regardless of holding period.

ITIN for Stock Trading: Brokerages, Capital Gains, and Taxes

Updated April 2026

Direct answer: Interactive Brokers, Charles Schwab, and Firstrade accept ITIN holders for US stock trading. Non-residents pay 30% withholding on dividends (reduced by treaty) but generally no US tax on capital gains. Resident aliens report gains on Form 8949 at 0-20% rates. File W-8BEN to claim treaty benefits.

Which US Brokerages Accept ITIN Holders?

Interactive Brokers is the best option for ITIN holders. It accepts non-US residents, offers access to US stocks, ETFs, options, futures, forex, and bonds, and has low commissions ($0 for US stocks, $0.65 per options contract). Minimum deposit is $0 for cash accounts, $2,000 for margin. Charles Schwab International accepts ITIN holders for brokerage accounts with $25,000 minimum. Firstrade offers $0 commission stock trading with no minimum deposit for ITIN holders. Robinhood, Webull, and Fidelity require SSNs and do not accept ITINs. To open an account, you need your ITIN, passport, proof of address, and completed W-8BEN form. See our best banks for ITIN holders for banking options.

How Are Capital Gains Taxed for Non-Resident ITIN Holders?

Non-resident aliens are generally exempt from US capital gains tax on stock sales under IRC Section 871(a). The key exception: if you are present in the US for 183 or more days during the tax year, capital gains become taxable at a flat 30% rate. If you stay under 183 days, gains from stock, bond, and ETF sales are not US-taxable. This makes US stock investing attractive for non-residents. However, dividends are US-taxable at 30% (reduced by treaty). Interest from US bonds and bank deposits is generally exempt. Report your status on Form W-8BEN provided to your brokerage.

How Are Dividends Taxed and How Do Treaties Help?

US-source dividends are subject to 30% withholding for non-residents. Tax treaties reduce this rate. Treaty rates by country: UK 15%, Canada 15%, Germany 15%, India 25%, Japan 10%, South Korea 15%, Australia 15%, China 10%, France 15%, Mexico 10%, Brazil 15%, Israel 25%. Your brokerage withholds at the treaty rate if you filed a valid W-8BEN indicating your treaty country. Without a W-8BEN, the full 30% is withheld. If too much was withheld, file Form 1040-NR to claim a refund. Qualified dividends from US corporations are the most common type and are fully subject to these rates.

Need an ITIN to open a brokerage account?

Apply through itin.so. Standard: $297. Express: $297. Start trading US stocks with your ITIN. 100% money-back guarantee.

Start Your ITIN Application

What Is Form 8949 and When Do ITIN Holders File It?

Form 8949 reports every capital asset sale: stocks, ETFs, bonds, options, and cryptocurrency. Each transaction lists the description, purchase date, sale date, proceeds, cost basis, and gain or loss. Short-term gains (assets held under 1 year) go in Part I. Long-term gains (held over 1 year) go in Part II. Totals transfer to Schedule D (Capital Gains and Losses). ITIN holders who are resident aliens file Form 8949 with Form 1040. Non-residents generally do not file Form 8949 because capital gains are not US-taxable for them. Your brokerage provides Form 1099-B (residents) or Form 1042-S (non-residents) with the transaction data needed to complete Form 8949.

What Is W-8BEN and How Does It Reduce Your Tax?

Form W-8BEN tells your brokerage you are a non-resident alien and claims tax treaty benefits. Complete Part I with your name, country of citizenship, ITIN, and address. Part II is for treaty claims: enter the treaty country and the article number that reduces dividend withholding. Part III is your signature. The form is valid for 3 calendar years from the year it is signed. Renew before expiration to avoid 30% default withholding. Without a W-8BEN, your brokerage assumes 30% withholding on all dividends and interest regardless of treaty eligibility. Filing this form can reduce your dividend tax rate from 30% to 10-15% depending on your country.

What Reporting Requirements Apply to ITIN Holders With Trading Accounts?

ITIN holders with US brokerage accounts may have additional reporting obligations. FBAR (FinCEN Form 114): required if total value of all foreign financial accounts exceeds $10,000 at any time during the year. Due April 15 with automatic extension to October 15. FATCA (Form 8938): required for specified foreign financial assets exceeding $50,000 (single) or $100,000 (married filing jointly) on the last day of the tax year. These forms apply to US residents with foreign accounts, not to non-residents with US accounts. Non-residents with US-only accounts generally do not have FBAR or FATCA obligations. Consult a tax professional for your specific situation.

How Do You Open a Brokerage Account With an ITIN?

The process takes 3 to 7 business days. At Interactive Brokers: create an account online, select "Individual" account type, enter your ITIN when asked for a tax ID, upload your passport and proof of address (utility bill or bank statement), complete the W-8BEN form electronically, and fund the account via wire transfer. At Charles Schwab International: call their international services line, provide your ITIN and identification, complete the application by mail or electronically, and fund with a minimum $25,000. At Firstrade: apply online, enter your ITIN, upload ID documents, and fund with no minimum required.

Government Sources

Non-resident capital gains exemption per IRC Section 871(a)(2). Dividend withholding per IRC Section 1441. Tax treaty rates per IRS Publication 901. Form 8949 and Schedule D per IRS instructions (Rev. 2025). W-8BEN per IRS Form instructions. FBAR per 31 USC 5314. Information current as of April 2026.

ITIN Stock Trading: Frequently Asked Questions

Interactive Brokers is the top choice for ITIN holders. It accepts non-US residents with ITINs for trading US stocks, options, futures, and forex. Charles Schwab International accepts ITIN holders for brokerage accounts. TD Ameritrade (now part of Schwab) accepts ITINs. Firstrade accepts ITINs for US stock trading with no minimum deposit. Robinhood and Webull require SSNs and do not accept ITINs.

Get Your ITIN and Start Trading US Stocks

Apply through itin.so. Standard: $297. Express: $297. Open your brokerage account with your ITIN. 100% money-back guarantee.

Start Your ITIN Application WhatsApp Us