Information for Employees

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For tax purposes in the United States, individuals can be classified into one of four groups:

  • U.S. Citizen
  • Permanent Resident Alien
  • Resident Alien for U.S. tax purposes
  • Nonresident Alien for U.S. tax purposes

To determine tax residency, non-U.S. citizens (excluding most Permanent Residents, DACA recipients, and asylees) are required to use Sprintax. This nonresident tax compliance system collects information about an individual's immigration status, visa, country of residency, and history of presence in the United States. To properly pay and tax individuals, the following determinations must be made:

  • Residency tax status (Nonresident or Resident Alien for U.S. tax purposes)
  • Eligibility to claim a tax treaty exemption (based on country of residence), and/or
  • Nonresident OASDI (Social Security) and Medicare tax exemption.

Nonresident alien employees are required to file a 1040-NR on or about April 15th each year.

Resident alien employees are required to file a 1040 or 1040-EZ on or about April 15th each year.

What is Form 1042-S and who must file:

Form 1042-S (Foreign Person’s U.S. Income Subject to Withholding) is used to report any payments made to foreign persons.

A nonresident employee who earned wages exempt from federal withholding taxes due to a tax treaty will receive a Form 1042-S. Nonresident employees will receive both a 1042-S and W-2 Form if wages earned are above the tax treaty limit.

1042-S Forms will also be issued for nonresident individuals who were paid scholarships, fellowships, royalties, and/or cash prizes during the tax year.

The Internal Revenue Service (IRS) requires 1042-S Forms to be sent to eligible individuals by March 15th of each year.

Information for individuals who will be receiving a 1042-S is provided from the data in Sprintax calculus.