I am a United States citizen, and I want to hire a programmer from abroad, which means he will be doing the work remotely from his own country. I learned recently that I can not assume that they will take care of taxes of their own part even if they are not US citizen, which means I would have to withhold certain % of their income. Now, this can be waived if they file a certain form - but there seems to be some confusion about which form to file. Does anybody know here for sure? When is the deadline? Any other things I should watch out for?

If the work is done overseas, there are NO U.S. tax obligations.

The form the programmer needs to complete is Form W-8BEN.

You must maintain this form on fole for the IRS and update it every three years.

If you hire someone as an independent contractor, then they are responsible for taxes, not you.

Scott:

What you say is accurate, but the IRS requires the "employer" to get paperwork that certifies the contractor is in fact located overseas.

The person may relocate to US in a few months - some time in 2013. Once that happens, what forms should I make him file so he could continue working for me?


When is form 8233 applicable?

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Originally Posted by AtlantaTaxExpert

Scott:

What you say is accurate, but the IRS requires the "employer" to get paperwork that certifies the contractor is in fact located overseas.

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Makes sense. Thanks for clarifying.

Form 8233 ( Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual ) applies only if the person is EXEMPT from taxation while living INSIDE the United States, which wold NOT be the case if he lives here.

Have him complete fzform W-9 to get his name, address and SSN.