Chang, an Non Resident Alien, is employed by Fisher, Inc., a foreign corporation. In November, Chang spends 10 days in the US performing consulting services for Fisher’s U. S. branch. She earns $5,000 per month. A month includes 20 workdays. How much is her U. S.-sourced income, is it exempt or non-exempt, and why?

Answer and Explanation:

The computation of the amount considered as US sourced income is as follows;

= $5,000 × 10 days ÷ 20 days

= $2,500

The following are the requirement related to the fully exempt US source income is as follows:

1. The service should be perfomed by an United States NRA for 90 days or less

2. The compensation should not be more than $3,000

3. The service should be performed on behalf of

a. NRA, foreign corporation or partnership who not engaged in US trade

b. The office should be maintained in US by an individual who should be the citizen of US

So the same is not allowed for exemption

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