ITG FAQ #22 Answer-If we have foreign persons who are working for us as employees, are there any special rules for withholding?
Withhold on resident aliens for federal income tax, social security and Medicare the same as for a U.S. citizen. Reference: Publication 15, Circular E, Employer's Tax Guide, Section 15, Special Rules for Various Types of Services and Payments.
For nonresident aliens (NRA), refer to Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations, to the section on Income Subject to NRA Withholding. To determine if a worker is a resident alien or a nonresident alien, refer to Figure 1-A, Nonresident Alien or Resident Alien, in Publication 519, U.S. Tax Guide for Aliens.
There are different rules for employees working as nonresident aliens (students, scholars, trainees, teachers, etc.) under § 101(a)(15)(F), (J), (M), or (Q) of the Immigration and Nationality Act. Reference Publication 15, Section 15, Special Rules for Various Types of Services and Payments.