IRS Rules for Federal Withholding for Nonresident Alien Employees

Internal Revenue Services (IRS) rules for tax withholding on wages of nonresident alien employees depend on results of 183-day residency formulas determined by the Substantial Presence Test, which assesses immigration status/history and days of presence in the U.S. This provides withholding on wages that more closely approximates your income tax liability. Following are the Form W-4 rules and special computations for withholding on wages.

When completing Form W-4, pay particular attention to the following lines:

  • Step 1: Check the Single or Married filing separately box in Step 1(c) regardless of actual marital status.
  • Step 2: Nonresident aliens should only complete this step if you have multiple jobs at the same time, and you should not account for your spouse’s job. Cannot use the estimator listed in Step 2(a).
  • Step 3: Nonresident aliens from Canada, Mexico, South Korea or India may be able to claim tax credits for children or other dependents. If this applies, enter the total credits in this step.
  • Step 4:
    • Do not claim exempt from withholding in the space below Step 4(c).
    • Write “NRA” or “nonresident alien” in the space below Step 4(c).
    • At your option, you may request an additional tax withholding amount in Step 4(c).  

Federal W-4 for nonresident aliens for 2020

Iowa W-4 for nonresident aliens for 2020

For additional information, refer to the Form W-4 instructions for nonresident aliens on the IRS website.  University Payroll Services cannot advise you about your tax withholding.

 

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