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Sec. 1.6414-1 Credit or refund of tax withheld on nonresident aliens and foreign corporations.

(a) In general.

Any withholding agent who for the calendar year pays more than the correct amount of:

(1) Tax required to be withheld under Chapter 3 of the Code, or

(2) Interest, addition to the tax, additional amount, or penalty with respect to such tax,

may file a claim for credit or refund of the overpayment in the manner and subject to the conditions stated in the Procedure and Administration Regulations (Part 301 of this chapter) under section 6402, or may claim credit for the overpayment as provided in paragraph (b) of this section. With respect to the payment of withholding tax under section 1446, this section shall only apply to a publicly traded partnership described in § 1.1446-4. See § 1.1446-3(d)(2)(iv) for rules regarding refunds to a withholding agent under section 1446.

(b) Claim for credit on Form 1042.

The withholding agent may claim credit of an overpayment described in paragraph (a) of this section for any calendar year by showing the amount of overpayment on the return on Form 1042 for such calendar year, which shall constitute a claim for credit under this paragraph. The claim for credit shall be evidenced by a statement on the return setting forth the amount determined as an overpayment and showing such other information as may be required by the instructions relating to the return. The amount claimed as a credit may be applied, to the extent it has not been applied under § 1.1461-2(b), by the withholding agent to reduce the amount of a payment or deposit of tax required by § 1.1461-1 or § 1.6302-2(a) for any payment period occurring in the calendar year following the calendar year of overwithholding. The amount so claimed as a credit shall also be entered on the annual return on Form 1042 for the calendar year following the calendar year of overwithholding and shall be applied as a payment on account of the tax shown on such form. If the withholding agent files a claim for credit or refund of the overpayment on Form 843 in accordance with section 301.6402-2 of this chapter (Procedure and Administration Regulations), or a claim for refund of the overpayment on Form 1042 in accordance with section 301.6402-3 of such chapter, he may not claim credit for the overpayment under this paragraph.

(c) Overpayment of amounts actually withheld.

No credit or refund to the withholding agent shall be allowed for the amount of any overpayment of tax which, after taking into account paragraph (b) of section 1.1464-1, the withholding agent has actually withheld from an item of income under Chapter 3 of the Code.

(d) Effective/applicability date.

The last two sentences of paragraph (a) of this section shall apply to partnership taxable years beginning after April 29, 2008.

[T.D. 6922, 32 FR 8714, June 17, 1967, as amended by T.D. 9394, 73 FR 23069-23086, Apr. 29, 2008.]

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