Glossary

W-8ECI

Certificate of Foreign Person's Claim of Effectively Connected Income (IRS form W-8ECI)

A W-8ECI is the IRS form a non-US person provides to a US withholding agent (such as a tenant or property manager) to certify that their US rental income is effectively connected with a US trade or business. It stops the default 30% withholding on gross rents so the income is reported and taxed on a net basis on Form 1040-NR with Schedule E.

Who it applies to: A non-US owner of US rental property (e.g., a Canadian) who elects to be taxed on net rental income.

Key facts

Form: IRS W-8ECI
Given to: The US tenant / property manager (not the IRS)
Effect: Removes the 30% withholding on gross rent
Requires: A US taxpayer ID (ITIN or SSN)

How it works

By default, a US payer must withhold 30% of the GROSS rent paid to a non-resident owner.
Making the IRC §871(d) election treats the rental as effectively connected income, taxed on NET at graduated rates via Form 1040-NR and Schedule E.
Giving the payer a W-8ECI (which needs a US ITIN or SSN) certifies that election so the 30% gross withholding stops.

Go deeper: Non-Resident Landlords: cross-border tax · Schedule E calculator

Related terms

Schedule E

The IRS form for reporting supplemental income and loss, including rental real estate — where a Canadian reports a US rental's income and expenses.

FIRPTA

A US withholding on the sale of US real property by a foreign person — generally 15% of the gross sale price, remitted to the IRS at closing. Not a final tax.

ITIN

A US tax ID the IRS issues to people who must file or be reported to the IRS but can't get an SSN — including non-US landlords who file a 1040-NR or provide a W-8ECI.

Frequently asked questions

Is W-8ECI the same as W-8BEN?

No. W-8BEN claims treaty-reduced withholding on passive (FDAP) income, but the Canada–US treaty does not reduce withholding on real-property rents. For US rental income you use W-8ECI, which removes the 30% gross withholding so the rental is taxed on net income.

Do I need a US tax ID to file W-8ECI?

Yes. A W-8ECI must include a US taxpayer identification number — an ITIN for most non-US individuals (or an SSN if you have one). Without it, the payer cannot rely on the form to stop the 30% withholding.

This definition is general information, not tax advice. See the full guide above and verify current rules with the CRA or IRS. ← Back to the glossary

BorderBird helps cross-border landlords track rent and prepare CRA NR4 and IRS Schedule E filings — see how it works.