Employees of a Foreign Government
Compensation for services performed as an employee of a foreign government, without regard to citizenship, residence, or where services are performed, is not considered to be wages for purposes of the Federal Unemployment Tax Act (FUTA). This includes services performed by ambassadors, other diplomatic and consular officers and employees, and nondiplomatic representatives.
Compensation for services performed as an employee of a wholly owned instrumentality of a foreign government, without regard to citizenship, residence, or where services are performed is not considered to be wages for FUTA tax purposes if:
- The instrumentality is wholly owned by the foreign government;
- The services are of a character similar to those performed in foreign countries by employees of the United States Government or of an instrumentality thereof; and
- The Secretary of State certifies to the Secretary of the Treasury that the foreign government, with respect to whose instrumentality exemption is claimed, grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States Government and of instrumentalities thereof.
Employees of an International Organization
Compensation for services performed within or outside the United States by an employee or officer (regardless of citizenship or residence) of an international organization is not considered to be wages for FUTA tax purposes. The term "international organization" means a public international organization entitled to enjoy privileges, exemptions, and immunities as an international organization under the International Organizations Immunities Act (22 U.S.C. 288-288f).
- Federal Unemployment Tax
- Internal Revenue Code section 3306 (c)(11), (c)(12), and (c)(16)
- Income Tax Regulations 31.3306(c)(11)-1; 31.3306(c)(12)-1; and 31.3306(c)(16)-1.
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.