for Federal Taxation and Reporting Purposes - Non US Citizens
For federal tax purposes, the Internal Revenue Service classifies income
into two sources. The income can either be U.S. source or foreign source.
The source of income depends on the location of the payor, location of
service provided, and the type of payment made.
Resident aliens are taxed on their worldwide income. Nonresident aliens
are taxed on their U.S. source only. Foreign source income paid to a nonresident
alien is not tax reported and is not subject to U.S. taxes. The table below
illustrates this.
| Source of Income for Federal Taxation and Reporting
Purposes - Non US Citizens |
| Type of Income |
Source
Determined by |
Location of
Services |
| In the U.S. |
Not in the U.S. |
| Employment |
Where the services
are performed |
U.S. Source |
Foreign Source |
| Independent Personal
Services |
Where the services
are performed |
U.S. Source |
Foreign Source |
| Royalties |
Where property is
used |
U.S. Source |
Foreign Source |
| Fellowship/Scholarship |
Residence of Payor |
US Payor: U.S
Source
Foreign Payor: Foreign |
US Payor:
Foreign*
Foreign Payor: Foreign |
| *the IRS has decided
the payor must also be considered when sourcing a Fellowship/Scholarship
payment. |
|
