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trentondouglas
Returning Member

I hired an intern this summer. I want to send her a 1099. She was a Chinese non-resident student. Can I use a 1099 or do I need to file a 1042-S? Do I need to withhold?

I have one more payment to send to her and it would be my last chance to withhold if its needed.  Also, I have never withheld money from a person for work.  How should I handle that?  Does it need to go to the IRS right now?  How do I send?  Thank you!
3 Replies
Critter-3
Level 15

I hired an intern this summer. I want to send her a 1099. She was a Chinese non-resident student. Can I use a 1099 or do I need to file a 1042-S? Do I need to withhold?

The reporting form goes out next January  so before you pay her one more nickel have her fill out a W-9 or W-8 form whichever is appropriate.   

 

Form W9 is intended for US persons.    https://www.irs.gov/forms-pubs/about-form-w-9

 

The equivalent form that applies to non-US persons is W8-BEN (for individuals) and W8-BEN-E (for entities).   https://americansoverseas.org/en/knowledge-centre/filing-tax-returns/what-is-w8/

https://www.irs.gov/forms-pubs/about-form-w-8

Carl
Level 15

I hired an intern this summer. I want to send her a 1099. She was a Chinese non-resident student. Can I use a 1099 or do I need to file a 1042-S? Do I need to withhold?

I would HIGHLY suggest you seek professional help in your local jurisdiction immediately, if not sooner. There's quite a lot that you're not aware of, and even more than I am not aware of. But for what I do know, you need to start by reading two documents. One is at https://www.foundation.sdsu.edu/payroll_tax_labor_faqs.html and will *maybe* help you with determining if you have to issue a W-2, (or 1099-MISC in your case) or a 1042-S. I am not aware of how the tax treaty between China and the U.S. will affect you here. So I can't stress the importance of this.

Also, if the Chinese national will be departing the country this year, they can't leave until they have clearance from the IRS. If that clearance is held up because of "YOU", then "YOU" may have legal issues that could potentially go beyond the IRS. For this, read the page at https://www.irs.gov/individuals/international-taxpayers/taxation-of-nonresident-aliens  Pay particular attention to the section for "Departing Aliens"

 

THen to add to the potential frustration, if your state taxes personal income, that could be another issue in and of itself for all I know.

In conclusion, I know very little (if anything) about the application of tax law to foreign nationals. I know just enough to realize that I can't provide you any definitive answers, and enough to know that if you don't get educated or seek professional help, your could find yourself in a never-ending nightmare with the IRS, and also potentially with other legal issues having nothing to do with the IRS. So professional help is highly recommended here.

 

Opus 17
Level 15

I hired an intern this summer. I want to send her a 1099. She was a Chinese non-resident student. Can I use a 1099 or do I need to file a 1042-S? Do I need to withhold?

I think it is likely that you need to use the 1042-S and take backup withholding.  The rate would be 30% unless the student claims something different on their W-8BEN, in which case you can rely on their certification.  If that is the case, the payment would be due to the IRS by January 31, because you will file or e-file the 1042-S with one copy to the payee and one copy to the IRS with the payment.  The payee would claim a refund by filing a tax return.

 

But I also agree that you may need some direct legal advice.

 

 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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