Federal Taxation of Aliens Working in the United States

Publication Date: February 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance; Population and demographics

Type:

Abstract:

The federal tax consequences for foreign nationals working in the United States are dependent on (a) whether an individual is classified as a resident or nonresident alien and (b) whether a tax treaty or agreement exists between the United States and the alien's home country. Resident aliens are generally taxed in the same manner as U.S. citizens. Nonresident aliens are subject to different treatment, which includes being taxed only on income from U.S. sources. Exceptions from the general rules may exist for aliens with specific types of visas or employment. Finally, the provisions of a tax treaty or totalization agreement may reduce or eliminate taxes owed to the United States.