IRS Form W-8CE – If you’re considering relinquishing your U.S. citizenship or terminating your long-term residency status, navigating the tax implications is crucial. One key document in this process is IRS Form W-8CE, officially titled “Notice of Expatriation and Waiver of Treaty Benefits.” This form plays a vital role for covered expatriates who must notify payers about their status and potentially waive certain tax treaty benefits. In this SEO-optimized guide, we’ll break down everything you need to know about Form W-8CE, including its purpose, who must file it, how to complete it, and important deadlines. We’ll draw from official IRS sources to ensure accuracy and relevance as of 2026.
What Is IRS Form W-8CE?
IRS Form W-8CE is a notification form used by individuals who qualify as covered expatriates to inform payers (such as financial institutions or employers) of their expatriation status. It alerts the payer that the individual is subject to special tax rules under Section 877A of the Internal Revenue Code, often involving deferred compensation, retirement accounts, or trusts. By filing this form, expatriates may waive rights to reduced withholding under U.S. tax treaties, ensuring compliance with expatriation tax requirements.
The form was last revised in October 2025, with adjustments for inflation in thresholds like average annual net income tax liability (set at $206,000 for 2025). It’s not submitted to the IRS directly but given to relevant payers. For the latest version, you can download the PDF here: https://www.irs.gov/pub/irs-pdf/fw8ce.pdf.
Who Qualifies as a Covered Expatriate?
Understanding whether you are a “covered expatriate” is essential, as only these individuals are required to use Form W-8CE for certain assets. According to IRS guidelines, you are a covered expatriate if, on your expatriation date, any of the following apply:
- Your average annual net income tax liability for the five tax years preceding expatriation exceeds $206,000 (2025 amount; indexed for inflation in later years—check Form 8854 instructions for updates).
- Your net worth is $2 million or more.
- You fail to certify on Form 8854 that you’ve complied with all U.S. federal tax obligations for the five preceding tax years.
Exceptions to Covered Expatriate Status
Not everyone meeting the above criteria is considered a covered expatriate. Exceptions include:
- Dual citizens at birth who remain citizens and tax residents of another country, and who have been U.S. residents for no more than 10 of the last 15 tax years.
- Individuals who relinquish U.S. citizenship before age 18½ and have been U.S. residents for no more than 10 tax years prior.
An “expatriate” refers to a U.S. citizen who relinquishes citizenship or a long-term resident (lawful permanent resident for at least 8 of the last 15 tax years) who ceases that status. The expatriation date is the day citizenship is relinquished or permanent residency ends.
Who Must File Form W-8CE?
Covered expatriates must provide Form W-8CE to payers if they held any of the following items on the day before their expatriation date:
- Eligible or ineligible deferred compensation items (e.g., pensions, retirement plans, or deferred payments for services).
- Specified tax deferred accounts (e.g., IRAs, 529 plans, HSAs, or Coverdell accounts).
- Interests in nongrantor trusts (where you’re a beneficiary but not the owner under tax rules).
All expatriates (covered or not) must also file Form 8854 with the IRS to report expatriation. Failure to file can result in covered expatriate status due to non-certification.
How to Fill Out IRS Form W-8CE?
Completing Form W-8CE is straightforward but requires attention to detail. Here’s a step-by-step overview based on the form’s instructions:
- Personal Information: Enter your name, U.S. taxpayer identification number (e.g., SSN or ITIN), permanent address, expatriation date, and current mailing address if different.
- Certification: Sign under penalties of perjury that you are a covered expatriate and authorize the form’s sharing with withholding agents.
- Payer Details: Provide the payer’s name and your account number or identifying information.
- Check Applicable Boxes: Indicate which items you held on the day before expatriation:
- Box 1: Eligible Deferred Compensation Item – Check to waive treaty benefits for withholding reductions. This applies if the payer is U.S.-based (or elects U.S. treatment), you’ve notified them of your status, and you’ve waived treaty claims on Form 8854.
- Box 2: Ineligible Deferred Compensation Item – Check if conditions for eligibility aren’t met; you’ll be treated as receiving the present value of benefits.
- Box 3: Specified Tax Deferred Account – Check to be treated as receiving your full account interest.
- Box 4: Nongrantor Trust – Check to waive treaty benefits on distributions or elect to receive the trust’s value (requires an IRS letter ruling and tax payment certification).
- Signature and Date: Sign and date the form.
Keep a copy for your records. Do not send it to the IRS—deliver it directly to the payer.
When and Where to File Form W-8CE?
Timing is critical to avoid penalties. Submit Form W-8CE to each relevant payer by the earlier of:
- The day before the first distribution on or after your expatriation date.
- 30 days after your expatriation date.
For nongrantor trusts, if electing to receive the value, obtain an IRS valuation letter ruling and attach it to Form 8854, filed with your tax return (Form 1040 or 1040-NR) by the due date, including extensions.
Tax Implications and Payer Responsibilities
Filing Form W-8CE triggers specific actions for payers under Section 877A:
- Withholding: Payers may withhold 30% on taxable payments or distributions.
- Reporting: Payers must provide details like present values or account interests within 60 days.
- Elections: For trusts, payers withhold until they receive proof of tax payment on the deemed distribution.
Covered expatriates face mark-to-market taxation on worldwide assets (with a $866,000 exclusion for 2025, adjusted annually), plus taxes on deferred items. Consult a tax professional to calculate liabilities.
Common Mistakes to Avoid with Form W-8CE
- Missing Deadlines: Delays can lead to unnecessary withholding or compliance issues.
- Incomplete Waivers: Ensure treaty waivers are properly noted on Form 8854.
- Overlooking Related Forms: Always file Form 8854; it’s mandatory for all expatriates.
- Assuming Non-Coverage: Double-check thresholds and exceptions to confirm your status.
Recent Developments and Resources
As of 2026, there are no major recent developments noted for Form W-8CE beyond the 2025 revision. However, inflation adjustments continue—check the IRS website for updates. Related resources include:
- Instructions for Form 8854 for expatriation reporting.
- IRS Publication 519 (U.S. Tax Guide for Aliens) for broader expatriation guidance.
For personalized advice, consult a qualified tax advisor or attorney specializing in expatriation taxes. Expatriation is irrevocable and has lifelong implications, so proceed with caution.
By understanding and properly filing IRS Form W-8CE, you can ensure a smoother transition while complying with U.S. tax laws. Download the form today and start planning your next steps.