Federal Tax Laws for Immigrants on Work Visas

Even if your workers aren't United States citizens, they still must adhere to federal tax laws. Immigrants, or foreigners who have the right to stay permanently in the U.S., pay the same taxes as American citizens. If you employ immigrants staying in the country under an employment-based visa, they're subject to withholding like the rest of your staff.

Immigrants

  1. Most workers require a firm job offer and certification by the Department of Labor before the government will grant a work visa. Highly skilled scientists, artists, executives or researchers can apply without a specific job offer if they plan to keep working in the United States. Foreigners willing to invest at least $500,000 into U.S. business ventures can also apply for a visa. If the government approves the visa application, it issues a Permanent Resident Card, the "green card" that qualifies immigrants to remain in the country as long as they wish.

Tax Law

  1. Once an immigrant receives her green card, she becomes a "tax resident" who must report wages, salary, bonuses, commissions and any other compensation to the IRS. The same applies to interest, dividends, rental property, royalties and other income. She must also pay tax on any income she earns overseas while a U.S. resident. If she worked in the United States as a nonresident alien before getting the green card, that income might also be taxable, depending on how long she resided in the country.

Withholding

  1. If you employee immigrants, you take withholding for income tax, Social Security and Medicare out of their paychecks as you would for any other employee. The standard IRS rules apply whether they're earning a salary, hourly wages or tips. Nonresident aliens pay a higher withholding rate, so your immigrant workers must file a W-9 form to confirm their status and ensure you take out the right amount. If you fail to withhold tax, you are subject to the same penalties as with U.S. citizens.

Nonimmigrant Workers

  1. Foreign employees who work for you under a temporary visa are also "tax residents" if they pass the IRS's substantial-presence test. If the worker spent 183 days in the United States in a three-year period, with at least 31 days in the third year, you have to withhold taxes. The IRS spells out multiple exceptions and special cases for nonresident workers, all listed in publication 519.