To earn interest on your Wise balance as a US customer, we have to make sure we're reporting your correct details to the IRS as an added layer of security. This article explains what that means for you.
Learn more about earning interest on your Wise Balance as a US customer
Why does Wise have to report my information?
Wise is a payer of interest in the US, so each year, the IRS needs us to file a tax form for every payee that earns more than $10 of interest a year.
The form we file is called the 1099-INT tax form, and it shows the annual income earned and tax withheld.
But before we file the form, which has our interest-earning customer details on it, we need to make sure that the customer details are correct — this is why we need to verify you during the interest onboarding process.
What information does Wise need from me?
In order to earn interest in the US, we need to check your legal name against your Taxpayer Identification Number (TIN) and file a 1099-INT with the IRS.
For personal customers, your TIN is your Social Security Number (SSN)
For businesses, your TIN is your Employer Identification Number (EIN)
Learn more about the TIN on the IRS website
Wise only offers this product to US persons* (see Disclaimer below) and won't withhold any tax — standard or backup withholding — unless necessary.
How does Wise verify my name and TIN?
We verify your TIN (SSN or EIN) using the IRS TIN Matching Service to check if your TIN matches your legal name on file with the IRS according to your most recently filed tax return.
Before you start earning interest in the US with Wise, you need to make sure that the name on your Wise profile matches your information with the IRS exactly. If there’s not a perfect match — the IRS will notify Wise to do something called backup withholding.
What if I get a TIN or name mismatch?
Even if your TIN and your name are correct, but they look different from the IRS records in any way — for example, a special character or middle name — it could still show as an end-of-year mismatch.
If you get a mismatch:
Check your most recent tax return with the IRS to see exactly how your name appears in their system
Check with the IRS about the issue before contacting our Customer Support — we can't force an IRS match
Once you’ve confirmed your TIN and name with the IRS:
if your name and TIN are up to date, and were entered correctly — just contact us to let us know
if your TIN or name needs to be changed in Wise, contact us and we’ll give you a secure way to send your TIN to us
If you're eligible, we’ll give you another opportunity to opt in to earn interest.
Frequently asked questions
What’s backup withholding?
Backup withholding is a type of US federal income tax deducted by Wise when a customer’s 1099 tax form either:
didn’t provide a valid TIN, or
didn’t show that they’re exempt from backup withholding
It’s calculated using IRS tax rates of 24% for US citizens and resident aliens, or 30% for non-resident foreign persons.
Wise offers its interest feature to verified US persons*.
During the interest onboarding process, you have certified under penalties of perjury that you are a US person and not subject to backup withholding.
What happens when Wise files my 1099-INT?
Once Wise files the 1099-INTs with the IRS:
The IRS then runs checks against their TIN database to see if there are any customer name or TIN mismatches.
If there's a mismatch, the IRS sends a letter to Wise, known as a B notice. This letter tells us we'll need to run backup withholding on any customers with a mismatched TIN that we can't fix.
You would be contacted by Wise if we received a B notice under your name as we need all US customer TINs to match the IRS database before they can opt in the US interest feature.
Learn more about how your taxes work if you earned interest in the US
*Disclaimer
The definition of a US person can be found in the Form W-9 instructions. For federal tax purposes, you're considered a US person if you are:
An individual who is a US citizen or U.S. resident alien
A partnership, corporation, company, or association created or organised in the United States or under the laws of the United States
An estate (other than a foreign estate)
A domestic trust (as defined in Regulations section 301.7701-7)