All NRA employees complete Form W-4 and W-8BEN. In addition, treaty exempt NRAs sign form 8233 prepared by Payroll Services.
Treaty exempt NRAs receive form 1042-S prepared by Payroll Services, summarizing the treaty exempt portion of wages for the tax year. For any portion of wages that are not exempt by treaty, a W-2 form will be prepared in addition to form 1042-S.
Form W-4 “Employee’s Withholding Allowance Certificate” has separate instructions for employees in NRA tax status. Form W-4 determines the amount of federal and state income taxes withheld from your pay. Following are the general rules for completing the W-4 form for employees in NRA status:
Form W-8BEN “Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding” used for NRA employees to indicate NRA status. This form is prepared by Payroll Services for NRA employees and need to be signed by the employee.
Form 8233 “Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual.” This form is prepared by Payroll Services for NRAs qualifying for income tax treaty exemption for all or part of wages for the year as dictated by the relevant treaty. It will be implemented when signed by the employee and HSC withholding agent.
Form 1042-S “Foreign Person’s U.S. Source Income Subject to Withholding." For employees, this form is used to record treaty exempt income for the tax (calendar) year. The form is mailed to recipients no later than March 15 of the following year. Payroll Services prepares 1042-S forms for employees. We strive to mail the forms by January 31 in conjunction with the Form W-2 the employee may receive in addition to the 1042-S form.