Overview

As of January 1, 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 sales of these securities for anyone who isn't considered 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'll 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 account. The remaining 10% that's withheld from your sale is then sent to the IRS.

We deduct the withholding tax automatically at the time of selling your security, so you don't have to take any further action.  

PTP security list

We have provided a list of securities considered to be PTPs below: