As of January 1st, 2023, the Internal Revenue Service (IRS) will charge a withholding tax any time a non-U.S. person sells a Publicly Traded Partnership (PTP) that earns income connected to the United States. 

This means that brokerages like Wealthsimple that offer trading of PTPs must withhold 10% from all sells of these securities for anyone not considered to be a U.S. person. This withheld amount must then be sent directly to the IRS and not back to you.

How Wealthsimple deducts your withholding tax

As a non-U.S. person, when you sell a U.S. PTP with Wealthsimple, we will be required to deduct 10% from the total amount of cash you receive for selling the security. This means that you will only see 90% of the sale price added to your available cash balance in your Wealthsimple account. The remaining 10% that is withheld from your sale is then sent to the IRS.

As we deduct the withholding tax automatically at the time of selling your security, we require no further action on your end. 

What securities are known to be Publicly Traded Partnerships?

We have provided a list of securities considered to be Publicly Traded Partnerships below.