Does a foreigner earning foreign income have to pay US taxes when using a US bank account?

This is a common confusion with international banking. Your parents actually don't need to fill out a W-9 form, which is specifically for US persons (citizens, residents, etc.). What they likely need is a W-8BEN form, which is for foreign individuals to certify they are not US taxpayers. Banks in the US are required to document the tax status of all account holders. If they don't have the proper documentation, they might default to treating the account as a US person account, which could lead to unnecessary withholding or reporting issues. When your parents complete the W-8BEN, they'll need to provide foreign identification information but not a US SSN/TIN. The form essentially tells the IRS that your parents are foreign taxpayers not subject to US income tax filing requirements just for having a US bank account.

I went through something similar with my aunt from Colombia. I found taxr.ai (https://taxr.ai) super helpful for figuring out these international tax situations. They analyzed my aunt's bank documents and tax forms and confirmed she needed a W-8BEN not a W-9. The tool actually explained that non-resident aliens only pay US taxes on income that's "effectively connected" with a US trade or business or is US-source income. Just having a US bank account doesn't create a tax liability for foreign income. They even helped us understand which specific Panama-US tax treaty provisions applied to her situation.

I tried taxr.ai after seeing the recommendation here and it was actually really helpful! I uploaded my partner's employment contract and Mexican tax documents, and got a clear explanation of his tax situation. The analysis confirmed he needed to file both Mexican taxes on his global income AND file US taxes as a non-resident alien, but only on his US-source income (which is his salary from the US company). They even identified which specific tax treaty articles applied to his situation and how to avoid double taxation. What I found most useful was the explanation of how the Foreign Earned Income Exclusion doesn't apply in his case because he's not a US person, but how the US-Mexico tax treaty provides other protections. Would definitely recommend for anyone dealing with cross-border tax situations!

If your parents are getting the runaround from the bank about their tax status, I'd recommend Claimyr (https://claimyr.com) for getting through to the IRS directly. I was in a similar situation with my in-laws from Peru who also opened a US bank account, and we couldn't get a straight answer from the bank about their tax obligations. After waiting on hold with the IRS for hours over multiple days, I found Claimyr through a YouTube video (https://youtu.be/_kiP6q8DX5c) that showed how it works. They got me connected to a real IRS agent in about 20 minutes who confirmed exactly what forms my in-laws needed and their tax status as non-resident aliens with a US bank account.

I need to apologize and correct myself. After my skeptical comment, I decided to try Claimyr for my international tax issue involving foreign rental property and US tax obligations. I honestly didn't expect much, but I was desperate after weeks of trying to reach the IRS. The service connected me to an IRS international tax specialist in about 35 minutes (way faster than my previous attempts). The agent walked me through exactly which forms I needed for my situation and confirmed I was eligible for foreign tax credits I didn't know about. They even explained which specific tax treaty provisions applied to my property in Spain. I saved hours of hold time and probably thousands in taxes by getting correct information directly from the IRS. Sometimes being proven wrong is actually a good thing!

Couple things nobody mentioned yet: 1) Your parents should be aware of FBAR requirements if their US account goes over $10,000 at any point during the year. Even non-US persons with US accounts need to file this if they meet the threshold. 2) Interest earned in the US account IS US source income and subject to 30% withholding (unless reduced by tax treaty) 3) If they frequently transfer large amounts (like over $10k), make sure they understand the bank will file CTRs Not tax advice, just my experience dealing with family members with similar situations from Dominican Republic.

One thing to consider - if ur parents plan to spend significant time in the US in the future, be careful about the substantial presence test. If they visit too much, they could accidentally become US tax residents even without meaning to!