U.S. Releases 2021 Guide for Withholding Taxes on Nonresidents

The 2021 version of Publication 515, which discusses withholding from U.S. source income paid to nonresident aliens and foreign entities, was released Feb. 4 by the Internal Revenue Service.

Nonresident aliens generally are subject to U.S. income tax on U.S.-sourced income. U.S.-sourced employment income paid to nonresident aliens by an employer based in the U.S. generally is subject to the same withholding methods used for U.S. residents, while other types of income are generally subject to a 30% flat rate. Tax treaties between the U.S. and the nonresident alien’s country of residence may provide exemptions from U.S. income tax. ...