Which form to file for foreign contractor?

[bennettlee908]

I had a Canadian based contractor that flew over to California for a week, performed services in California, then flew back to Canada when he was done. What tax forms do I need to fill?  I also paid him the full amount without withholding any taxes? Is that ok?

Thank you very much.

[ToddL99]

If this foreign-based contractor performed personal services for you (e.g. home decorating, remodeling, landscaping, etc.), there is no requirement for you to report the payments.

From Instructions for Forms 1099-MISC and 1099-NEC (2020) -  "Report on Form 1099-MISC only when payments are made in the course of your trade or business. Personal payments are not reportable."

Withholding tax is another issue. If the contractor provides a completed Form W-8 ECI , then you do not have to withhold tax on the payment.

Otherwise,  withholding is normally required on any payments for independent personal services performed by a foreign individual (while present in the U.S)..

See Who Must File Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding for additional information.

[bennettlee908]

Hi @ToddL99 ,

Thanks for the response. This service is performed for my small business. Is 1099-MISC relevant for non-US citizens /resident contractors? I heard they fill out a  W-8BEN form? Not sure whats the relationship between these forms...

[ToddL99]

Forms 1099-MISC (and 1099-NEC) do not apply to non-U.S. citizens or non-resident aliens performing services for compensation while in a foreign country.

Form W-8BEN is used to certify that an individual is not a U.S. citizen or Resident Alien, and payments they receive for services performed in a foreign country are not subject to 30% withholding.

Instructions for Form W-8BEN