Foreign Visitor Tax Guide: Section Eight

Section Eight: H-lB, O, P and TN Visa Status (Temporary Workers and Trainees)

8.1 General Provisions
H-1Bs, the category restricted to temporary workers in specialty occupations, are generally considered nonresidents for tax purposes unless they meet the "substantial presence" test. There is no specific amount of time that H-1Bs will be considered nonresidents unlike those holding F and J status.

The O and P categories are restricted to artists, performers, and aliens of extraordinary ability. Those holding this status are treated in the same manner as the H-1Bs.

The TN category is restricted to Mexicans and Canadians, as it is part of the North American Free Trade Agreement (NAFTA).
TN is similar to the H-1B category, but will be a pre-selected list of occupations which Canada, Mexico, and the U.S. agree are "specialty occupations."

8.2 Possible Sources of U.S. Income
The H-lB, O, P and TN categories (except H-4 dependents) allow for employment of a foreign national exclusively on the campus of the sponsoring institution. Additional employment is possible only with approval of additional petitions approved by the BCIS.

8.3 Tax Implications
Refer to Sections 2.4 - 2.6 of this guide to determine whether federal income tax, FICA tax, and/or state and local income tax apply to the type of payments being made to the foreign national. In addition, H-1Bs are subject to FICA withholding. It is important to note that any change of nonimmigrant status to H-1B status (i.e., F-1 student to H-1B specialty occupation) must be communicated to the ASU Human Resources, Records and Payroll Office, immediately.