My sister has a taxable brokerage account with Interactive Brokers and invested in GE stocks (which collapsed, resulting in a massive capital loss written off on Line 132 of Schedule 3 on her T1 return). However, I did not realize that the W8BEN form was not filled, therefore she faced 30% withholding (should be 15% under the Canada-US tax treaty) for dividends received.
T5 box 15 = 772.84 T5 box 16 = 231.85
So, the amount that is overwithheld ($115.92) automatically appeared on Line 232 of her T1 as "other deductions", but is this all she is going to get--a tax deduction for the amount paid, but not a tax refund? Is there a way to make the IRS refund the amount? Thank you.
In other words: My sister is a non-resident alien living in Canada and has no ties to the United States. She has US sourced qualified dividend income subject to 30% withholding, which should be 15% withholding under the US-Canada tax treaty. So, does she get a refund from the IRS for the excess tax paid, or is this a non-refundable withholding, for which only a tax deduction is available on the Canadian side? So, no point in filing a 1040NR?