Originally Posted by oliver.smith
Can this be considered foreign source income or is it ECI, as it is sold to a U.S. company?
ECI UNLESS you/your SMLLC are physically present in US and the product is SOLD overseas. So since you own and operate a business, SMLLC, in the US selling services, products, or merchandise, you are, with certain exceptions, engaged in a trade or business in the US. You said that The product is sold to a U.S. printer and distributor for the U.S. market, so it is US spruce income , ECI. you need to file 1040NR and the Sch C and you do not need to file Sch SE as you are NOT subject to US soc sec benefits . effectively connected income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. citizens and residents.