Discussion:Question on earnings of a non-resident alien
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Discussion Forum Index --> Tax Questions --> Question on earnings of a non-resident alien
| 23 May 2008 | |
| My client is a non-resident alien from Europe working for a European company here on a J-1 visa. The European company has started a new division in the United States. He is paid by the European company by direct deposit to his bank back home and then wire transfers money to himself here as he needs it. There is really no US footprint on the income. Are his wages subject to US Tax under any of the relevant code sections since he is being paid for work done in the US? What would be the impact of him obtaining a social security number mainly for purposes other than tax (i.e. - obtaining a driver's license etc.). Would this then subject him to tax reporting? | |
| 23 May 2008 | |
| The NRA is performing services in the U.S. Income from the services is sourced to the location where the services are performed. Thus, he has U.S. source income and the income would be subject to U.S. income tax.
One question is whether he is treated as an NRA. Reg. 301.7701(b)-3(b)(6) requires that the individual substantially comply with the visa requirements. I suspect that the J-1 visa holder performing services in the U.S. for a European company may not be in compliance. This would mean that he may be treated as a resident alien for tax purposes (and that he has some immigration issues). If he is a resident alien, he will owe FICA taxes as well. If he is an agent or employee of the European company, then he may be creating a taxable presence in the U.S. for the company (possibly requiring it to file a U.S. tax return). | |
