IRS Revises Withholding Rules for Nonresident Alien Employees


On February 2, the IRS announced the 2011 procedures for withholding on wages of nonresident alien employees who work in the United States (Notice 2011-12). The new procedures apply to wages paid on or after January 1, 2011.

In 2010, special withholding procedures were instituted for nonresident aliens because they were not eligible to receive the Sec. 36A making work pay credit. Because the 2010 withholding tables reflected the credit, special procedures were required to ensure that wages paid to nonresident aliens were not underwithheld.

With the expiration of the credit (it does not apply to wages paid after December 31, 2010), employers can once again use the procedures explained in Notice 2005-76 and the tables in Publication 15 (Circular E), Employer’s Tax Guide, to determine the amount of tax to withhold from wages paid to nonresident alien employees performing services in the United States.

Newsletter Articles

SPONSORED REPORT

Get your clients ready for tax season

With the extended 2017 tax filing season drawing to a close, now is the time to get your practice and your clients ready for the 2018 season.

PRACTICE MANAGEMENT

2016 Best Article Award

The winners of The Tax Adviser’s 2016 Best Article Award are Edward Schnee, CPA, Ph.D., and W. Eugene Seago, J.D., Ph.D., for their article, “Taxation of Worthless and Abandoned Partnership Interests.”