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Tag Archive for NRAs

US Income Taxation of Nonresident Alien Individuals – What About Alimony Income?

A nonresident alien individual (NRA) is generally subject to US income tax on two types of income categories:

Income that is “effectively connected” with a trade or business in the United States (so-called “ECI”); Income from US sources that is “fixed, determinable, annual or periodical” (so-called “FDAP” income)

ECI versus FDAP

When income is “effectively connected” with a US trade or business, the income is taxed at graduated rates. These are the same rates that apply to US citizens and residents (the highest marginal rate is 39.6%). Such “effectively connected income” ECI, is to be Read more

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