What withholding rate would we use if a U.S. corporation pays a nonresident alien as an independent contractor?
Amounts paid for independent personal services performed by a nonresident alien (NRA) in the United States is subject to NRA withholding and reporting as follows: A U.S corporation must withhold U.S. federal income tax at the statutory rate of 30 percent on the gross amount of all payments unless the alien qualifies for and enters into a CWA with the IRS. A CWA is applicable to NRA athletes and entertainers performing personal services in the United States and may result in a reduced withholding rate. If an NRA is from a country with which the United States has a tax treaty allowing all income from whatever source to be exempt from taxation by the other country, no withholding is required if the individual athlete or entertainer has secured a taxpayer identification number and filed Form 8233 with the withholding agent. If the athlete or entertainer has not secured the taxpayer identification number they are unable to file Form 8233 but can file for a CWA with potential for a reduced r
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