Internal Revenue Code · 26 U.S.C.
§ 1446. Withholding of tax on foreign partners’ share of effectively connected income
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 1446
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- October 22, 1986 by Pub. L. 99–514
- Last amended
- March 23, 2018 by Pub. L. 115–141
- Amendments
- 4 dated changes in the source credit
- Length
- 7 subsections · 1,116 words · about 5 min to read
- Defines
- 3 terms
- Cross-references
- cites 10; cited by 1 Code section and 21 other regulations
- Regulations
- 13 issued under this section
The amount of the withholding tax payable by any partnership under subsection (a) shall be equal to the applicable percentage of the effectively connected taxable income of the partnership which is allocable under section 704 to foreign partners.
Each foreign partner of a partnership shall be allowed a credit under section 33 for such partner’s share of the withholding tax paid by the partnership under this section. Such credit shall be allowed for the partner’s taxable year in which (or with which) the partnership taxable year (for which such tax was paid) ends.
For purposes of this section, the term “foreign partner” means any partner who is not a United States person.
Except as provided in this subsection, if any portion of the gain (if any) on any disposition of an interest in a partnership would be treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, the transferee shall be required to deduct and withhold a tax equal to 10 percent of the amount realized on the disposition.
No person shall be required to deduct and withhold any amount under paragraph (1) with respect to any disposition if the transferor furnishes to the transferee an affidavit by the transferor stating, under penalty of perjury, the transferor’s United States taxpayer identification number and that the transferor is not a foreign person.
The rules of section 1445(d) shall apply to a transferor’s agent or transferee’s agent with respect to any affidavit described in subparagraph (A) in the same manner as such rules apply with respect to the disposition of a United States real property interest under such section.
At the request of the transferor or transferee, the Secretary may prescribe a reduced amount to be withheld under this section if the Secretary determines that to substitute such reduced amount will not jeopardize the collection of the tax imposed under this title with respect to gain treated under section 864(c)(8) as effectively connected with the conduct of a trade or business with in the United States.
If a transferee fails to withhold any amount required to be withheld under paragraph (1), the partnership shall be required to deduct and withhold from distributions to the transferee a tax in an amount equal to the amount the transferee failed to withhold (plus interest under this title on such amount).
Any term used in this subsection which is also used under section 1445 shall have the same meaning as when used in such section.
The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this subsection, including regulations providing for exceptions from the provisions of this subsection.
(Added Pub. L. 99–514, title XII, § 1246(a), Oct. 22, 1986, 100 Stat. 2582; amended Pub. L. 100–647, title I, § 1012(s)(1)(A), Nov. 10, 1988, 102 Stat. 3526; Pub. L. 101–239, title VII, § 7811(i)(6), Dec. 19, 1989, 103 Stat. 2410; Pub. L. 115–97, title I, §§ 13001(b)(3)(D), 13501(b), Dec. 22, 2017, 131 Stat. 2098, 2139; Pub. L. 115–141, div. U, title IV, § 401(a)(199), Mar. 23, 2018, 132 Stat. 1193.)
Terms defined here
Where the text says “the term … means”. Select a term to jump to its definition.
Regulations under this section
Treasury regulations (26 CFR) issued under § 1446
- § 1.1446-0 Table of contents.
- § 1.1446-1 Withholding tax on foreign partners' share of effectively connected taxable income.
- § 1.1446-2 Determining a partnership's effectively connected taxable income allocable to foreign partners under section 704.
- § 1.1446-3 Time and manner of calculating and paying over the 1446 tax.
- § 1.1446-4 Publicly traded partnerships.
- § 1.1446-5 Tiered partnership structures.
- § 1.1446-6 Special rules to reduce a partnership's 1446 tax with respect to a foreign partner's allocable share of effectively connected taxable income.
- § 1.1446-7 Applicability dates.
- § 1.1446(f)-1 General rules.
- § 1.1446(f)-2 Withholding on the transfer of a non-publicly traded partnership interest.
- § 1.1446(f)-3 Partnership's requirement to withhold under section 1446(f)(4) on distributions to transferee.
- § 1.1446(f)-4 Withholding on the transfer of a publicly traded partnership interest.
- § 1.1446(f)-5 Liability for failure to withhold.
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 10 other sections
- § 704 Partner’s distributive share
- § 1 Tax imposed
- § 11(b) Tax imposed
- § 703(a) Partnership computations
- § 613 Percentage depletion
- § 613A Limitations on percentage depletion in case of oil and gas wells
- § 33 Tax withheld at source on nonresident aliens and foreign corporations
- § 864(c)(8) Definitions and special rules
- § 1445(d) Withholding of tax on dispositions of United States real property interests
- § 6655 Failure by corporation to pay estimated income tax
Cited by 1 Code section
Cited in 21 regulations not issued under it
- § 1.108(i)-2 Application of section 108(i) to partnerships and S corporations.
- § 1.1441-5 Withholding on payments to partnerships, trusts, and estates.
- § 1.1443-1 Foreign tax-exempt organizations.
- § 1.1445-8 Special rules regarding publicly traded partnerships, publicly traded trusts and real estate investment trusts (REITs).
- § 1.1461-1 Payment and returns of tax withheld.
- § 1.1461-2 Adjustments for overwithholding or underwithholding of tax.
- § 1.1461-3 Withholding under section 1446.
- § 1.1462-1 Withheld tax as credit to recipient of income.
- § 1.1463-1 Tax paid by recipient of income.
- § 1.1464-1 Refunds or credits.
- § 1.1474-6 Coordination of chapter 4 with other withholding provisions.
- § 1.6071-1 Time for filing returns and other documents.
- § 1.6091-1 Place for filing returns or other documents.
- § 1.6151-1 Time and place for paying tax shown on returns.
- § 1.6302-2 Deposit rules for tax withheld on nonresident aliens and foreign corporations.
- § 1.6414-1 Credit or refund of tax withheld on nonresident aliens and foreign corporations.
- § 1.6655-1 Addition to the tax in the case of a corporation.
- § 301.6226-3 Adjustments taken into account by partners.
- § 301.6402-3 Special rules applicable to income tax.
- § 301.6721-1 Failure to file correct information returns.
- § 301.6722-1 Failure to furnish correct payee statements.
Amendment history
From the source credit and the official notes, newest first.
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 3 WITHHOLDING OF TAX ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
- Subchapter A Nonresident Aliens and Foreign Corporations
Nearby sections
- § 1442 Withholding of tax on foreign corporations
- § 1443 Foreign tax-exempt organizations
- § 1444 Withholding on Virgin Islands source income
- § 1445 Withholding of tax on dispositions of United States real property interests
- § 1446 Withholding of tax on foreign partners’ share of effectively connected income
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Amendments
2018—Pub. L. 115–141 substituted “Withholding of tax” for “Withholding tax” in section catchline.
2017—Subsec. (b)(2)(B). Pub. L. 115–97, § 13001(b)(3)(D), substituted “section 11(b)” for “section 11(b)(1)”.
Subsecs. (f), (g). Pub. L. 115–97, § 13501(b), added subsec. (f) and redesignated former subsec. (f) as (g).
1989—Subsec. (b)(2)(B). Pub. L. 101–239, § 7811(i)(6)(A), substituted “section 11(b)(1)” for “section 11(b)”.
Subsec. (d)(2). Pub. L. 101–239, § 7811(i)(6)(B), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “A foreign partner’s share of any withholding tax paid by the partnership under this section shall be treated as distributed to such partner by such partnership on the last day of the partnership’s taxable year (for which such tax was paid).”
Subsec. (f). Pub. L. 101–239, § 7811(i)(6)(C), amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: “The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations providing for the application of this section in the case of publicly traded partnerships.”
1988—Pub. L. 100–647 amended section generally, substituting provisions relating to withholding tax on foreign partners’ share of effectively connected income for provisions which related to withholding tax on amounts paid by partnerships to foreign partners.
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by section 13001(b)(3)(D) of Pub. L. 115–97 applicable to distributions made after Dec. 31, 2017, see section 13001(c)(2) of Pub. L. 115–97, set out as a note under section 11 of this title.
Pub. L. 115–97, title I, § 13501(c)(2), Dec. 22, 2017, 131 Stat. 2141, provided that: “The amendment made by subsection (b) [amending this section] shall apply to sales, exchanges, and dispositions after December 31, 2017.”
Effective Date of 1989 Amendment
Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title.
Effective Date of 1988 Amendment
Pub. L. 100–647, title I, § 1012(s)(1)(D), Nov. 10, 1988, 102 Stat. 3527, provided that: “The amendments made by this paragraph [amending sections 1446 and 6401 of this title] shall apply to taxable years beginning after December 31, 1987. No amount shall be required to be deducted and withheld under section 1446 of the 1986 Code (as in effect before the amendment made by subparagraph (A)).”
Effective Date
Pub. L. 99–514, title XII, § 1246(d), Oct. 22, 1986, 100 Stat. 2583, provided that: “The amendment made by this section [enacting this section and amending section 6401 of this title] shall apply to distributions after December 31, 1987 (or, if earlier, the effective date (which shall not be earlier than January 1, 1987) of the initial regulations issued under section 1446 of the Internal Revenue Code of 1986 as added by this section).”