For U.S. investors, nothing is withheld from VOO dividends by default; you pay any tax owed when you file your return. For non-U.S. investors, VOO withholding tax is 30% on every dividend, deducted before the money reaches your account, though a tax treaty between your country and the United States can often bring that rate down to 15% or lower if the right form is on file. Whether you keep 100%, 85%, or 70% of each distribution comes down to your residency status and the paperwork your broker has for you.
What U.S. Investors Actually Pay
If you hold VOO in a taxable brokerage account and your broker has a valid Social Security Number or Taxpayer Identification Number on file, no tax comes out of your quarterly distributions. The broker reports the income on Form 1099-DIV, and you settle up at tax time.
The rate you pay depends on how the dividends are classified. Qualified dividends are taxed at long-term capital gains rates of 0%, 15%, or 20%, depending on your taxable income. Ordinary dividends are taxed at your regular income rate, which can reach 37%. Roughly 97% of VOO’s distributions qualify for the lower rate, a result of the fund holding shares of large U.S. corporations that meet the IRS holding-period requirements.
The 24% Backup Withholding Rate
There is one situation where a U.S. investor sees money withheld from VOO dividends. If you fail to give your broker a correct taxpayer identification number, or if the IRS notifies your broker that you underreported dividend or interest income in prior years, the broker must withhold 24% from every payment. The rate was made permanent by legislation in 2025.1Internal Revenue Service. 2026 Publication 15
You prevent this by submitting Form W-9, which certifies your name, taxpayer identification number, and that you are not subject to backup withholding.2Internal Revenue Service. Request for Taxpayer Identification Number and Certification Most brokers collect this when you open the account. The W-9 does not expire, though your broker may ask for an update if your information changes.
If backup withholding did occur during the year, the amount appears in Box 4 of your Form 1099-DIV and gets credited against your total tax liability when you file.3Internal Revenue Service. Topic No. 307, Backup Withholding
VOO Held in Retirement Accounts
Inside a traditional IRA or 401(k), dividends land in the account without any tax event. You pay income tax on withdrawals, typically in retirement. Inside a Roth account, qualified withdrawals come out tax-free, which means those VOO dividends may never be taxed. No withholding, no 1099-DIV, no qualified-versus-ordinary math until distribution time.
The 30% Default for Non-U.S. Investors
U.S. tax law imposes a flat 30% withholding rate on dividends paid from U.S. sources to nonresident aliens and foreign entities.4Office of the Law Revision Counsel. 26 US Code 1441 – Withholding of Tax on Nonresident Aliens Because VOO holds shares of U.S. corporations, every dollar of its distributions is U.S.-source income subject to the tax.5Office of the Law Revision Counsel. 26 USC 871 – Tax on Nonresident Alien Individuals
The 30% is calculated on the gross dividend and deducted before the money reaches you. On a $1,000 distribution, $300 goes to the U.S. Treasury and $700 lands in your account. The broker is the legally responsible withholding agent, and will apply the full 30% unless documentation on file proves you qualify for a lower rate.
Reducing the Rate Through a Tax Treaty
The United States has income tax treaties with dozens of countries that cut the withholding rate below the 30% default.6Internal Revenue Service. Tax Treaty Tables For individual portfolio investors, the most common treaty rate is 15%, though some countries have negotiated lower.7Internal Revenue Service. Table 1 – Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties
Some examples from the IRS treaty tables:
- United Kingdom, Canada, Australia, and Japan: 15% general rate for individual investors, dropping to 5% or lower for large corporate shareholders that meet ownership thresholds.
- China: 10% on dividends regardless of ownership stake.
- India: 25% general rate, 15% for qualifying direct investment.
- Greece and the Commonwealth of Independent States: no reduction; the full 30% applies.
Most foreign investors holding VOO through a standard brokerage account fall under the general portfolio dividend rate in their country’s treaty, not the lower direct-dividend rate reserved for substantial corporate ownership. Check the IRS treaty table for your specific country before assuming a rate applies.
Many countries also let you claim a foreign tax credit on your home-country return for the U.S. tax already withheld, which can reduce or eliminate double taxation. Availability depends entirely on your home country’s rules.
The Paperwork That Gets You the Treaty Rate
Treaty rates do not apply automatically. The correct IRS form has to be with your broker before a dividend is paid, or the broker will withhold at 30%.
Form W-8BEN for Individuals
Individual nonresident aliens file Form W-8BEN to certify foreign status and claim treaty benefits.8Internal Revenue Service. Instructions for Form W-8BEN The form asks for your name, country of permanent residence, a foreign tax identification number, and the specific treaty article and rate you are claiming.
A W-8BEN is valid from the date you sign it through the last day of the third succeeding calendar year. A form signed in March 2026 remains effective through December 31, 2029; one signed in December 2026 also expires on December 31, 2029, giving you just over three years. If your country of residence changes before expiration, a new form has to be filed immediately. Letting the W-8BEN lapse means the broker reverts to 30% on your next distribution.
Form W-8BEN-E for Entities
Foreign corporations, partnerships, and trusts use Form W-8BEN-E. The form requires disclosure of the entity’s classification under both Chapter 3 (withholding on foreign persons) and Chapter 4 (the Foreign Account Tax Compliance Act).9Internal Revenue Service. Instructions for Form W-8BEN-E Without one on file, the broker withholds 30% no matter where the entity is organized.
Recovering Tax That Was Overwithheld
If the broker withheld more than you actually owe, because your W-8BEN was not on file when a dividend was paid or because a treaty rate was misapplied, you can claim a refund by filing a U.S. tax return.
Nonresident aliens file Form 1040-NR to report U.S.-source income and claim back the excess.10Internal Revenue Service. Instructions for Form 1040-NR For foreign investors without U.S. wages subject to withholding, the filing deadline is June 15.11Internal Revenue Service. Taxation of Nonresident Aliens The Form 1042-S showing the income and tax withheld goes with the return.
The IRS generally allows refund claims up to three years from the date the return was filed, or two years from the date the tax was paid, whichever is later.12Internal Revenue Service. Time You Can Claim a Credit or Refund Miss the window and the money stays with the Treasury.
The Year-End Forms That Document Withholding
Two forms report the year’s activity, depending on your status. U.S. residents receive Form 1099-DIV, which breaks down ordinary dividends, qualified dividends, and any backup withholding taken. Nonresident aliens receive Form 1042-S, which reports the gross income paid, the withholding rate applied, and the total tax withheld.13Internal Revenue Service. About Form 1042-S, Foreign Persons US Source Income Subject to Withholding Both arrive in the first couple months of the following year and are your proof of tax paid, whether you are claiming a foreign tax credit at home or a refund from the IRS.
What Withholding Does Not Cover
Two situations often get confused with dividend withholding but work differently.
Capital gains from selling VOO shares are not subject to U.S. withholding. Nonresident aliens who spend fewer than 183 days in the United States during the tax year generally owe zero U.S. tax on those gains, provided the gains are not connected to a U.S. trade or business. The 30% capital gains tax only applies to nonresidents physically present in the U.S. for 183 days or more during the year. U.S. residents pay capital gains tax at their applicable rate when they sell, with no withholding at the time of sale.
Estate tax is a separate and larger risk for non-U.S. investors. VOO shares held in a U.S. brokerage account are U.S.-situated assets, and a nonresident alien’s estate receives a unified credit of just $13,000, sheltering roughly $60,000 of U.S. assets.14Office of the Law Revision Counsel. 26 USC 2102 – Credits Against Tax Amounts above that can be taxed at rates up to 40%. Some tax treaties include estate tax provisions that raise the exemption or provide other relief; many do not. Foreign investors with substantial U.S. holdings sometimes use Ireland-domiciled ETFs or foreign trusts to manage the exposure, though those come with their own costs.