[Code of Federal Regulations]
[Title 26, Volume 12]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1462-1]

[Page 214]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1462-1  Withheld tax as credit to recipient of income.

    (a) Creditable tax. The entire amount of the income from which the 
tax is required to be withheld (including amounts calculated under the 
gross-up formula in Sec. 1.1441-3(f)(1)) shall be included in gross 
income in the return required to be made by the beneficial owner of the 
income, without deduction for the amount required to be or actually 
withheld, but the amount of tax actually withheld shall be allowed as a 
credit against the total income tax computed in the beneficial owner's 
return.
    (b) Amounts paid to persons who are not the beneficial owner. 
Amounts withheld at source under chapter 3 of the Internal Revenue Code 
(Code) on payments to a fiduciary, partnership, or intermediary is 
deemed to have been paid by the taxpayer ultimately liable for the tax 
upon such income. Thus, for example, if a beneficiary of a trust is 
subject to the taxes imposed by section 1, 2, 3, or 11 upon any portion 
of the income received from a foreign trust, the part of any amount 
withheld at source which is properly allocable to the income so taxed to 
such beneficiary shall be credited against the amount of the income tax 
computed upon the beneficiary's return, and any excess shall be 
refunded. Further, if a partnership withholds an amount under chapter 3 
of the Code with respect to the distributive share of a partner that is 
a partnership or with respect to the distributive share of partners in 
an upper tier partnership, such amount is deemed to have been withheld 
by the upper tier partnership.
    (c) Effective date. This section applies to payments made after 
December 31, 2000.

[T.D. 8734, 62 FR 53471, Oct. 14, 1997, as amended by T.D. 8804, 63 FR 
72188, Dec. 31, 1998]