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CarolMc
June 20, 2018

Foreign Independent Contractors

  • June 20, 2018
  • 1 reply
  • 0 views

I have a client that is wanting to hire an independent contractor from Jamaica, but does not know the tax implications. This is what I do know:

 

----- "if a foreign contractor performs service in the US, certain conditions should be met to avoid tax obligations. Those conditions are:

  • The nonresident alien performing labor services is present in the US for less than 90 days during the tax year
  • The total pay does not exceed $3,000
  • The pay is for labor or services performed for an office or place of business maintained in a foreign country

If any of the above conditions are not satisfied, a principal has to report and withhold income of a foreign independent contractor. However, withholding and income tax for a contractor can be avoided if the country of a contractor has a tax treaty with US."

 

I also know that the US and Jamaica do have a tax treaty, and the pay will exceed $3,000.

 

Does anyone have any words of wisdom on this matter? 

      1 reply

      Sangeethmathew
      Sangeethmathew
      June 20, 2018

      Hi,

      Welcome to the community. In a global economy in the digital age offshore outsourcing is very common. Its always good for the foreign contractor to be registered with an EIN no issued by IRS. 

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