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Does a Foreign resident who visits the U.S. periodically,

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Hi, Does a Foreign resident who...
Hi,
Does a Foreign resident who visits the U.S. periodically, never exceeding the 183 day substantial presences test and having a substantial degree of foreign source income (vital interest not in U.S.) be classified as a W-2 employee in the U.S. by a U.S. corporation owed by this same foreign resident?
Submitted: 4 months ago.Category: Tax
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11/28/2017
Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,609
Experience: 15years with H & R Block. Divisional leader, Instructor
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Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

The foreign person can be an employee of a US company that is owned by the foreign individual. As long as this is not a Sole Proprietorship or a single member LLC. Neither of those would be able to claim the owner is an employee.

The 183 rule you cited is not 183 days for each year.

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

The person could be a resident alien based on the 3 years preceeding each year they are in the US. Or They can be an employee not resident on the US.

Please let me know if you need more information. You can post below.
If not then scroll up to see the STARS to rate so I am credited.

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Customer reply replied 4 months ago
Hi,
The foreign resident does not meet the substantial presences test to be considered a U.S. resident . Can he be a W-2 employee of a U.S. 1120-C.
Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

Yes, a US company can employee non residents. A sole prop cannot hire the owner. You cannot be a S corp so as long as this is a C corp yes, you could be an employee.

Please let me know if you need more information.
If not then scroll up to see the STARS to rate so I am credited.

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Tax Professional: Robin D., Senior Tax Advisor 4 replied 4 months ago

Hello, just checking to see if you responded again.

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