Under what circumstances will income for personal services performed in the United States as a nonresident alien is not considered to be from U.S. sources and is not subject to U.S. taxation?
The IRS has stated that "if the following three conditions exist, income for personal services performed in the United States as a nonresident alien is not considered to be from U.S. sources and is not subject to U.S. taxation."
If you do not meet all three conditions, your income from personal services performed in the United States is U.S. source income and is taxed.
These three conditions identified by the IRS are as follows:
1)You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U.S. corporation, a U.S. partnership, or a U.S. citizen or resident.
2)You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year.
3)Your pay for these services is not more than $3,000.
However, if the pay for "these services is more than $3,000, the entire amount is income from a trade or business within the United States, and is subject to U.S. taxation."