I invest in U.S. stocks from overseas and too much tax was withheld. How do I get it back?

You're a nonresident alien if you don't have a green card and don't meet the substantial presence test. That test asks whether you were in the U.S. at least 31 days this year and at least 183 days over three years, counting all of this year's days, 1/3 of last year's and 1/6 of the year before.

Investors who live in China and visit the U.S. now and then are almost always nonresidents. Students and scholars on F or J visas don't count some of their days, so they may also still be nonresidents. That needs a case-by-case look.

A separate question is whether you can use a tax treaty. The U.S.–China treaty turns on whether you're a tax resident of China, not on your citizenship. It doesn't apply to Hong Kong. A Chinese citizen living in another country looks to that country's treaty with the U.S., if there is one.

Mainly dividends: 30% by default, or no more than 10% for residents of China under the treaty. Capital gains on stock sales are generally exempt if you were in the U.S. fewer than 183 days, and U.S. bank deposit interest and most portfolio interest are exempt too.

A few points worth knowing:

• The treaty itself doesn't exempt stock gains. Article 12 of the U.S.–China treaty lets the U.S. tax them. The exemption comes from U.S. law and the 183-day rule, so the number of days you spent in the U.S. is what matters.
• Trading for your own account through a U.S. broker isn't a U.S. business. That matters, because once you're treated as engaged in a U.S. business, very different rules apply.
• The 183-day case mostly comes up for students and scholars whose days are partly exempt. Ordinary overseas investors rarely hit it.

It's almost always paperwork. If the broker doesn't have a valid W-8BEN from you, or your W-8BEN doesn't claim the treaty, it has to withhold at the highest presumed rate.

The most common situations:

1. No W-8BEN, or an incomplete one. Without a valid form, the broker may withhold 30% on dividends, apply backup withholding, or treat you as a U.S. person. IRS rules don't let a broker apply a treaty rate to someone it merely presumes is foreign.
2. An expired W-8BEN. The form is generally valid from the date you sign it through December 31 of the third calendar year after that. A form signed in 2026 lasts through December 31, 2029. Miss the renewal and the next dividend goes back to 30%. If your address or tax residence changes, you have 30 days to file a new one.
3. No treaty country on line 9. If you don't claim the treaty, dividends are still withheld at 30%. Treaty benefits also require a U.S. taxpayer ID or a tax ID from your country of residence.
4. Being treated as a U.S. person, with 24% backup withholding on sales. If you once gave a W-9, have a U.S. address on file, or a joint owner gave a W-9, the broker may treat the account as a U.S. account. It then withholds 24% of the gross proceeds (not the gain) when you sell, and issues a 1099-B instead of a 1042-S.
5. Distributions withheld as if they were all dividends. Brokers may skip withholding on fund capital gain distributions and return of capital, but many simply withhold on the full amount.

Many overseas trading apps clear through U.S. brokers. The withholding and tax forms may come from the U.S. broker or from the overseas firm, but the rules are the same.

Form 1042-S is the income and withholding statement brokers send to foreign persons by March 15 of the following year. A 1099 goes to U.S. persons. If you received a 1099, your broker has you on file as a U.S. person.

The boxes on Form 1042-S that matter most:

Each type of income gets its own 1042-S, so several from one account is normal.

There are two routes. Before March 15 of the following year, the broker can sometimes adjust it. Once the 1042-S or 1099 is out, you file Form 1040-NR with an ITIN and the IRS refunds it.

Route 1: the broker adjusts. IRS rules let a withholding agent that discovers over-withholding by March 15 of the following year repay you through the reimbursement or set-off procedures (and as late as the extended due date for the 1042-S). Whether a given broker will actually do this varies. After you update your W-8BEN, ask. It's the easiest fix when it's available.

Route 2: file Form 1040-NR.

• You need an ITIN. If you don't have a U.S. taxpayer ID, apply for one with your first return (see our guide: Do I have to mail my original passport to the IRS to get an ITIN?).
• If all you had was dividends and you're only reclaiming withholding, use the simplified procedure. It applies if you were a nonresident all year, weren't engaged in a U.S. business, had your tax fully covered by withholding at source and are filing only to claim a refund. The IRS's own example is a nonresident whose only U.S. income was stock dividends, one of which was withheld at 30%.
• Refigure at the treaty rate. Dividends go on Schedule NEC in the column for the correct rate (10% for China), and item L of Schedule OI lists the country and treaty article (Article 9 for dividends). An individual claiming a reduced treaty rate on dividends or interest generally doesn't need Form 8833.
• Attach proof. Attach the 1042-S to the front of page 1 and enter the box 10 credit on line 25g. For backup withholding, attach the 1099, and report withheld sale proceeds on line 12 of Schedule NEC. If you're reclaiming withholding on a fund's capital gain distribution or a return of capital, attach a statement as well.
• Timing and payment. The IRS says refunds of tax withheld on Form 1042-S can take up to 6 months. With a U.S. bank account you can use direct deposit. Without one, the IRS mails a check to the foreign address on line 35e (see our guide on IRS refund checks sent overseas).

These are illustrative examples with round numbers, meant only to show the math. They aren't your actual situation.

Example 1: dividends withheld at 30%. Say you're a tax resident of China and received $10,000 of U.S. dividends in a year. Your W-8BEN had expired, so the broker withheld 30%, or $3,000. Under the treaty it should have been 10%, or $1,000. Filing Form 1040-NR with your ITIN and the 1042-S lets you claim back $2,000.

Example 2: 24% backup withholding on a sale. Say you sold U.S. stock for $50,000 and the broker, treating you as a U.S. person, withheld 24% of the gross proceeds, or $12,000. You were in the U.S. fewer than 183 days and just trade for your own account, so the gain isn't subject to U.S. tax. That $12,000 can generally be reclaimed in full. One catch: an account treated as a U.S. account often didn't apply the treaty rate to dividends either, so the 1040-NR has to pick up 10% on those dividends, which reduces the refund.

Both examples make the same point: withholding isn't the final tax. What you actually owe is worked out on Form 1040-NR, based on your status and the treaty.

Nonresidents without U.S. wages file Form 1040-NR by June 15 of the following year. If you had U.S. wages subject to withholding, it's April 15. A refund generally has to be claimed within 3 years of filing or 2 years of paying the tax, whichever is later. After that, it's gone.

• For 2025 income, the deadline was June 15, 2026. For 2026 income, it's June 15, 2027.
• The IRS treats tax withheld at source as paid on the return due date, and a return filed early as filed on the due date.
• If you never filed for a year, the IRS says most people have a three-year window to claim the refund, after which the money becomes the property of the U.S. Treasury. If you were over-withheld for several years, start with the oldest year that's closest to expiring.

If you live overseas and have no home in the U.S., owning U.S. stocks and funds generally doesn't create state tax. Form 1042-S has state tax boxes, but they're generally blank for this kind of investment income. If you have a home, a job or a business in a U.S. state, that's a separate question.

The earlier you catch it, the easier it is. If the broker can fix it, you don't have to wait for the IRS.

• Situation A: New account, or nothing over-withheld yet. Give the broker a W-8BEN, claim your country of residence on line 9 and provide the tax ID it asks for. Note the signing date and renew before it expires. On a joint account, every owner needs one.
• Situation B: You caught it this year, before March 15 of the following year. Update or file the W-8BEN so future withholding is right, then ask the broker whether it can repay what was already over-withheld through the reimbursement or set-off procedures.
• Situation C: You already have the 1042-S or 1099. File Form 1040-NR with an ITIN (applying for one with the return if needed), attach the 1042-S or 1099, refigure at the treaty rate and claim the refund. Fix the W-8BEN at the same time so it doesn't happen again next year.
• Situation D: It's been going on for years. Refund claims are generally limited to 3 years, so start with the oldest year that's about to expire. Years past the deadline can't be recovered.