NRA Withholdings—No Guns, Just Taxes

The term “NRA withholding” is not a reference to deductions from a person’s paycheck to support the National Rifle Association. Instead, it is a general term that refers to federal tax withholdings on payments of U.S.-sourced income to foreign persons under Sections 1441 to 1443 of the Internal Revenue Code. Foreign persons should be mindful of their tax filing and payment obligations under this regime.

NRA Withholding, Generally

As a general matter, a foreign person is subject to U.S. federal taxes on its U.S.-sourced income. A foreign person’s U.S. income (with certain exceptions) is subject to a U.S. tax rate of 30 percent.[1] The applicable federal tax is generally withheld (i.e., the NRA withholding) from the total payment submitted to the foreign person. Taxpayers should consider the following relevant areas associated with NRA withholdings:

Who Is Subject to NRA Withholding?

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