US/Non US Source Income

Non-resident aliens, for tax purposes, are only subject to tax on income that is considered U.S. Source Income by the IRS. Foreign Source Income received by non-resident aliens is NOT subject to U.S. taxation. (Source, IRS Publication 515)

  • U.S. Source Income – Income from services performed in the U.S.
  • Foreign Source Income - Income from services performed outside the U.S.

Per IRS website, see abbreviated list of source rules for income of non-resident aliens below:

  • Type of Income
    Source Determined By
  • Personal Services
    Where services are performed
  • Dividends
    Type of corporation (U.S. or Foreign)
  • Interests
    Residence of payer
  • Rents
    Where property is located
  • Royalties – Patents, Copyrights, etc.
    Where property is used
  • Royalties – Natural resources
    Where property is located
  • Pensions due to personal services performed
    Where services were performed as a nonresident alien
  • Scholarships and Fellowship grants
    Generally, residence of payer

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