NRA tax reporting.(nonresident aliens)

A number of companies have relationships with contractors who are not U.S. citizens. Companies may employ day-laborers to assist with varying needs. This item discusses the different classes and definitions of individuals who are subject to wage withholding, the new wage-withholding method for nonresident aliens (NRAs), the Service's individual taxpayer identification number (ITIN) program, and the preparation of a wage-only income tax return for an NRA.

Overview

Individuals who are subject to tax in the U.S. fall into two classes: (1) citizens and resident aliens taxable under Sec. 1; and (2) NRAs taxable under Sec. 871 or 877. Businesses must identify whether a worker is a citizen, resident or NRA as part of the hiring process. In some cases, employers treat these individuals as independent contractors. Employers may be asked or required to withhold taxes (Federal, state or both) from these workers.

A resident alien is an individual who is not a citizen or national of the U.S. and meets the …