Withholding Exemptions - Personal Exemptions - Form W-4 – For Nonresident Aliens


Withholding Exemptions

For tax years beginning after December 31, 2017, nonresident aliens cannot claim a personal exemption deduction for themselves, their spouses, or their dependents.

Special Instructions for Form W-4 For Nonresident Alien Employees

A nonresident alien subject to wage withholding must give the employer a completed Form W-4, Employee's Withholding Certificate, to enable the employer to figure how much income tax to withhold.

Before completing Form W-4, nonresident alien employees should see Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens (Rev. January 2020), which provides nonresident aliens who are not exempt from withholding instructions for completing Form W-4, and the Instructions for Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. Also, see chapter 8 of Publication 519, U.S. Tax Guide for Aliens, for important information on withholding.

Special Instructions for Form W-4 For Nonresident Alien Employers

For wages paid to nonresident alien employees, employers are required to add an amount to the nonresident alien employee's wages solely for calculating the income tax withholding for each payroll period. The amount to be added to the nonresident alien employee's wages to calculate income tax withholding is set forth in Chapter 9 of Publication 15, (Circular E), Employer's Tax Guide.

Note: Nonresident alien students from India and business apprentices from India are not subject to this procedure.

The amounts added to wages should not be included in any box on the nonresident alien employee's Form W-2, Wage and Tax Statement, and do not increase the income tax liability of the nonresident alien employee. Also, these amounts do not increase the social security, Medicare, or FUTA tax liability of the employer or the nonresident alien employee. This procedure only applies to nonresident alien employees who have wages subject to income tax withholding.

A Form W-4 remains in effect until the employee gives an employer a revised form. If an employee gives an employer a Form W-4 that replaces an existing Form W-4, an employer begins withholding no later than the start of the first payroll period ending on or after the 30th day from the date when an employer received the replacement Form W-4.

Invalid Forms W-4. Any unauthorized change or addition to Form W-4 makes it invalid. This includes taking out any language by which the employee certifies that the form is correct. A Form W-4 is also invalid if, by the date an employee gives it to an employer, the employee indicates in any way that it is false. An employee who submits a false Form W-4 may be subject to a $500 penalty.

When an employer gets an invalid Form W-4, the employer does not use it to figure federal income tax withholding. The employer should inform the employee that it is invalid and ask the employee for a corrected form. If the employee does not provide an employer a valid form, the employer withholds taxes as if the employee is single and claiming no withholding allowances. However, if an employer has  the most recent version of Form W-4 for the employee that is valid, the employer withholds as they had previously.

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