Federal Income Tax Withholding

Salaries, wages, or any other pay for personal services (referred to collectively as wages) paid to nonresident alien employees are subject to graduated withholding in the same way as for U.S. citizens and residents if the wages are effectively connected with the conduct of a U.S. trade or business. Under IRC section 864(b), with certain exceptions, the term "trade or business within the United States" includes the performance of personal services within the United States. Any wages paid to a nonresident alien individual for personal services performed as an employee for an employer are generally exempt from the 30% "NRA withholding" if the wages are subject to graduated withholding.

Also exempt from the 30% "NRA withholding" is pay for personal services performed as an employee for an employer if it is effectively connected with the conduct of a U.S. trade or business and is specifically excluded from the definition of wages under the Internal Revenue Code. For more information on what constitutes wages refer to the Wages Paid to Aliens and U.S. Citizens Abroad .

• Persons Employed Abroad by a U.S. Person
• Aliens Employed in the U.S.
• Persons Employed in U.S. Possessions
• Persons Employed by a Foreign Person
• Persons Employed By a Foreign Government or International Organization