Tax Forms 8805 & 8804: Foreign Partner's Information Statement of Section 1446 Withholding Tax
For the 2026 filing year, based on 2025 income, partnerships with foreign partners must act as withholding agents on effectively connected taxable income, or ECTI, under section 1446. That filing job now sits alongside the separate 10% transfer-withholding rules under section 1446(f), which apply when a foreign partner sells a partnership interest.
When a US partnership involves foreign partners, it's crucial to understand the tax implications and reporting requirements. Forms 8804 and 8805 play a pivotal role in ensuring that foreign partners meet their US tax obligations. Let's delve into the specifics of these forms and their significance, and the broader concept of partnership withholding. For a wider compliance picture, see our guide to foreign company tax reporting.
What is partnership withholding?
Partnership withholding is the section 1446 system that makes a partnership pay tax during the year on ECTI allocable to foreign partners. It is not the same as Chapter 3 NRA withholding on passive US-source income, which generally uses a 30% withholding regime and Forms 1042 and 1042-S instead.
Partnership withholding refers to the process by which a partnership retains a portion of the distributive share of a foreign partner's income, ensuring that the US tax obligations on that income are met. This withheld amount is then remitted to the IRS. Forms 8804 and 8805 are built for active business income that is effectively connected with a US trade or business, while the Form 1042-S rules for passive income cover items such as interest and dividends.
Comparison table of partnership forms
Form 8804 is the annual summary, Form 8805 is the partner statement, and Form 8813 is the payment voucher generally used for section 1446 installment payments due on the 15th day of the 4th, 6th, 9th, and 12th months of the partnership’s tax year.
The following 3 forms make up the core section 1446 filing set for a partnership with foreign partners.
| Form | What it does | Who uses it | When it is used |
|---|---|---|---|
| Form 8804 | Annual return that reports the partnership’s total section 1446 liability and transmits partner statements | Filed with the IRS by the partnership | After year-end, generally by the 15th day of the 3rd month after the close of the tax year |
| Form 8805 | Partner-level statement that shows each foreign partner’s ECTI and section 1446 credit | Prepared by the partnership and furnished to each foreign partner | After year-end, attached to Form 8804 and sent to the partner |
| Form 8813 | Quarterly payment voucher for section 1446 withholding | Filed by the partnership when making installment payments | 15th day of the 4th, 6th, 9th, and 12th months of the partnership’s tax year |
The current IRS instructions say these forms are used together, and Form 8813 remains the payment voucher for section 1446 installment payments.
Understanding Form 8805
Form 8805, titled "Foreign Partner's Information Statement of Section 1446 Withholding Tax," is used by partnerships to provide information to a foreign partner about its share of effectively connected taxable income (ECTI) and the total tax credit allocable to it for the partnership's tax year.
Key features
- Purpose: To report the foreign partner's share of ECTI and the total tax credit allocable.
- Filing requirement: The partnership files Form 8805 and furnishes a copy to the foreign partner.
- Associated forms: Along with Form 8805, the partnership must provide each foreign partner with a Schedule K-1 (Form 1065), which reports the partner’s share of income, deductions, and credits.
Understanding Form 8804
Form 8804, known as the "Annual Return for Partnership Withholding Tax," is akin to an umbrella form that provides a summary of the various Forms 8805 issued to foreign partners.
Form 8804 is required to be filed by partnerships that have ECTI allocable to foreign partners. This includes both US and foreign partnerships that engage in a trade or business within the United States.
The form serves as an annual return to report the partnership's withholding tax obligations for its foreign partners.
Key Features
- Purpose: To report the total tax liability of the partnership for the tax year.
- Associated forms: Accompanied by Form 8813 payment voucher for any tax payments required.
What is the withholding rate for partnerships with a foreign partner?
As of 2026, the section 1446 withholding rate is 37% for non-corporate foreign partners and 21% for corporate foreign partners. The current Form 8804 also breaks out special categories that can be taxed at 28%, 25%, and 20% when the partnership has the right facts and documentation for those items.
The withholding rate for partnerships with foreign partners is a critical aspect of ensuring tax compliance. This rate is typically determined based on the highest tax rate in effect for the type of foreign partner, whether they are an individual or a corporation. For individual foreign partners, the rate often corresponds to the maximum individual income tax rate. On the other hand, for corporate foreign partners, the rate is usually set at the top corporate tax rate. Despite wider 2025 tax reform coverage, the IRS still shows 37% and 21% as the base section 1446 rates for 2026 filings.
These rates can vary depending on the nature of the income. For instance, certain types of income, such as dividends or capital gains, might have different withholding rates. Moreover, tax treaties between the US and other countries can also influence the withholding amount because treaty benefits related to that income may reduce the partner’s gross effectively connected income before the tax is figured out when the partnership has the right documentation.
Based on a client scenario at TFX: a partnership allocates $100,000 of ECTI to one non-corporate foreign partner. The starting section 1446 withholding amount is $37,000 before any valid reductions supported by Form 8804-C or other allowed adjustments.
Section 1446(f): withholding on transfers
Section 1446(f) is a different rule from Form 8804 withholding. When a foreign partner sells or otherwise transfers a partnership interest, the transferee generally must withhold 10% of the amount realized, and if the transferee fails to do that, the partnership can have a secondary withholding duty on later distributions to that transferee.
Based on our client scenario: a foreign partner transfers an interest with an amount realized of $500,000. The starting section 1446(f) withholding amount is $50,000 unless a full or partial exception applies under the regulations.
This matters because section 1446(f) does not use Form 8804 or Form 8805 as the main reporting path. The IRS directs taxpayers to the Form 8288 series for these transfer rules, while Form 8804 stays focused on annual withholding tied to partnership ECTI.
Exceptions to partnership withholding
Withholding can drop below the base rate, or even to $0, but the filing analysis does not always disappear with it. A partnership can still have a Form 8804 filing duty where gross effectively connected income is allocable to a foreign partner, even when the current-year ECTI or the actual tax due is reduced to zero.
The following 4 situations can reduce or eliminate current-year withholding.
- The foreign partner's share of ECTI is effectively zero after allocable deductions and allowed adjustments.
- Tax treaty benefits related to that income may reduce the foreign partner’s gross effectively connected income when the partnership has valid documentation in its files.
- The partner submits Form 8804-C to certify partner-level deductions and losses, or to certify that the partnership investment is the partner’s only ECI activity and the section 1446 tax would be under $1,000.
- Certain direct ECI payments outside the partnership context may be exempt from chapter 3 NRA withholding with Form W-8ECI, but that form does not replace section 1446(a) withholding on partnership ECTI.
A useful rule of thumb is this: Form W-8 and W-9 requests help establish status and withholding treatment, but Form 8804-C is the official partner-level tool the IRS names for reducing section 1446 withholding.
Compliance and deadlines
Forms 8804 and 8805 are generally due by the 15th day of the 3rd month after the partnership tax year ends. Partnerships made up entirely of nonresident alien partners can file by the 15th day of the 6th month, and the IRS first-quarter 2026 tax calendar lists March 16, 2026, for calendar-year Form 8804 and Form 8805 filings.
Adherence to deadlines is paramount to avoid penalties. Typically, both forms must be filed by the 15th day of the third month following the close of the partnership’s tax year. Extensions can be requested using IRS Form 7004. Forms 8804 and 8805 are filed separately from Form 1065.
- Form 8804 due date: for most partnerships, the deadline is the 15th day of the 3rd month after year-end, with a next-business-day rule when the normal date falls on a weekend or legal holiday.
- Form 8804 extension: Form 7004 extends the time to file, but not the time to pay the section 1446 tax. Any expected balance should be paid with the extension request to reduce late-payment exposure.
- Form 8804 estimated tax payments: the partnership generally pays during the year with Form 8813, not with the annual return itself. For 8813 payments, the due dates are the 15th day of the 4th, 6th, 9th, and 12th months of the partnership’s tax year.
IRS internal guidance now says Form 8804 currently has no e-file option, so paper filing to Ogden is still the live rule in 2026. The FIRE system is used for certain information returns, but Forms 8804, 8805, and 8813 are still mailed to the Internal Revenue Service, P.O. Box 409101, Ogden, UT 84409.
Penalties for non-compliance
Non-compliance can be costly. A late Form 8804 usually triggers a penalty of 5% of the unpaid tax for each month or part of a month the return is late, capped at 25%. For tax returns required to be filed in 2026, a return that is more than 60 days late can also face a minimum failure-to-file penalty of $525 or 100% of the unpaid tax, whichever is less.
Form 8805 has a separate information-return penalty track. For 2026-due returns and payee statements, the IRS penalty page lists $60 up to 30 days late, $130 if filed after 30 days but by August 1, $340 after August 1 or if not filed, and $680 for intentional disregard, with annual caps that vary by filer size and no cap for intentional disregard.
There is also personal liability risk. IRS trust fund recovery procedures specifically include Form 8804, and the IRS says a responsible person who willfully fails to collect, account for, or pay over trust fund taxes can be personally liable for the full unpaid amount plus interest.
However, penalties might be waived if the partnership can demonstrate reasonable cause for the delay. The IRS says reasonable-cause relief may apply both to Form 8804 late-filing issues and to certain information-return failures.
Common mistakes and best practices
The biggest avoidable mistakes are using an old deadline, missing a partner's TIN, and letting the annual forms drift away from the quarterly payment record. Another frequent miss is forgetting that section 1446 withholding can apply even when the partnership made $0 of cash distributions during the year.
The following 4 checks catch most errors before filing.
- Review the current Instructions for Forms 8804, 8805, and 8813, not an older article or prior-year memo.
- Confirm the partnership and that every foreign partner has the correct identifying information, including a valid US TIN where required.
- Keep the ECTI and withholding numbers on Form 8805 consistent with the partner’s Schedule K-1 and the partnership’s workpapers. That consistency point is partly an inference, but it follows directly from the IRS penalty rules for incorrect information returns and incorrect payee statements.
- Check whether related filings, such as Form 8865 reporting, may also apply in cross-border partnership structures.
Bottom line
Accurate 2026 reporting matters because section 1446 now covers both the annual ECTI withholding system and a separate transfer-withholding regime under section 1446(f). Clean Form 8804, Form 8805, and Form 8813 compliance reduces credit-matching problems for partners and lowers the chance of penalties, notices, and payment issues later.
FAQ
IRS Form 8805 is the partner-level statement. It shows the foreign partner’s allocable ECTI and section 1446 credit, and the partner attaches it to Form 1040-NR or Form 1120-F to claim that credit. The current Form 8805 Instructions are included in the January 2026 instructions for Forms 8804, 8805, and 8813.
Form 8804 is the partnership’s summary return that reports the total section 1446 liability for the year. Form 8805 is the individual partner statement, or receipt, that shows each foreign partner’s share of ECTI and the credit that partner can claim on its own US return.
Form 8804 and 8805 are for partnership ECTI under section 1446. Form 1042 and Form 1042-S are used for chapter 3 or chapter 4 withholding, including passive US-source FDAP income and, in some cases, PTP ECI distributions or certain PTP transfer amounts.
Usually not when there is no effectively connected gross income allocable to any foreign partner. But if gross effectively connected income exists and later deductions reduce ECTI to zero, the filing result can be different, because the IRS instructions tie the filing trigger to gross effectively connected income, not only to tax due.
Form 8804-C lets a foreign partner certify partner-level deductions and losses to reduce section 1446 withholding. It can also support a full exemption where the partnership investment is the partner’s only ECI activity and the section 1446 tax would be under $1,000.
The current IRS penalty schedule is $60 up to 30 days late, $130 through August 1, $340 after August 1 or if not filed, and $680 for intentional disregard. Those are the current 2026 figures, so older $290 or $310 amounts are no longer the right benchmark.
Mail the Form 8804 8805 package to the Internal Revenue Service Center, P.O. Box 409101, Ogden, UT 84409. IRS internal guidance also says Form 8804 currently has no e-file option, so paper filing remains the practical rule for these forms in 2026.
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