Help to Determine G-5 Income Tax Deductions
Help to Determine G-5 Income Tax Deductions
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G-5, A-3 and NATO-7 Domestics: Help Completing From W-4
Helping the G-5 Domestic Determine Withholding Tax Filing Status
2009 - IMPORTANT UPDATE: If your domestic arrives in the United States after July 1, 2009 the domestic will be a Non-Resident Alien for 2009 tax reporting. To calculate Federal income tax withholding you MUST select the Tax Year: 2009 Jan. - Mar. AND the domestic many only claim 1 withholding tax allowance on the form W-4. The mid-year revised Federal income tax rates DO NOT apply to non-resident aliens.
HomeWork Solutions provides payroll and tax services to employer's with domestics working in the US on a G-5, A-3 and NATO-7 Visa. These employers and their G-5, A-3 and NATO-7 domestics are often confused about how to properly complete the 
Form W-4 to determine withholding status. The following are general guidelines that apply to the vast majority of G-5, A-3 and NATO-7 domestics.
Marital Status
A G-5, A-3 and NATO-7 domestic who is working in the United States is considered SINGLE for tax reporting purposes if s/he IS single - or - if s/he is married but the spouse is not present in the US as a legal resident of the United States.
The G-5, A-3 and NATO-7 domestic may be considered married for tax reporting purposes ONLY if the spouse is also a legal US resident. G-5, A-3 and NATO-7 domestic may claim head of household ONLY if s/he is a Resident Alien in the tax year (see below) and the dependents being supported are legally present in the United States.
Withholding Allowances
(also referred to as Personal Exemptions and/or Dependents)
A withholding allowance, in general, may be claimed for every dependant the employee will be entitled to claim on their personal tax return. Married workers whose spouse also works need to coordinate their withholding allowances not to exceed their combined total. The Form W-4 is intended to guide the employee step by step through the process of determining withholding allowances.
A G-5, A-3 and NATO-7 domestic who is filing as a Resident Alien in the current tax year will complete the Form W-4 according to it's instructions. Resident aliens can use the same filing statuses available to U.S. citizens. Please remember that to be entitled to valid withholding allowances for a spouse or dependent children, the family members MUST be legally present in the United States. A resident alien who provides material support to dependents abroad MAY NOT claim these dependents on his/her tax returns.
The G-5, A-3 and NATO-7 will be considered a U.S. resident for tax purposes if s/he meets the substantial presence test for the calendar year. To meet this test, s/he must be physically present in the United States on at least:
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
- All the days you were present in the current year, and
- 1/3 of the days you were present in the first year before the current year, and
- 1/6 of the days you were present in the second year before the current year.
IRS Form 1040 Instructions: Section 6 Dependents (pg. 19) IRS Publication 519
Non-Resident Alien typically includes a G-5, A-3 or NATO-7 domestic who worked less than 6 months in their first tax (calendar) year in the United States. The Non-Resident Alien does not meet the Resident Alien test above.
G-5, A-3 or NATO-7 domestic who is filing as a Non-Resident Alien is entitled to one withholding allowance on the form W-4. A G-5, A-3 or NATO-7 domestic MAY NOT claim HEAD OF HOUSEHOLD in a tax year when their status is Non-Resident Alien
There are many special circumstances that can cause the general rules outlined above to change. Please consult IRS Publication 519 or a qualified income tax practitioner for more assistance. HomeWork Solutions' staff cannot provide further assistance in determination of marital status or qualified exemptions other than the guidelines above.
A G-5, A-3 or NATO-7 domestic who works less than 6 months in their first year in the United States is typically a Non-Resident Alien for that year and is entitled to only 1 (one) withholding allowance. After the first year, most G-5, A-3 and NATO-7 domestics are Resident Aliens and entitled to the same withholding allowances as U.S. citizens. Declaration of withholding status (married or single) and number of withholding allowances is the responsibilty of the employee. When in doubt, the designation Single with zero withholding allowances will withhold the maximum calculated tax. This IS refundable to the employee if there was an overpayment! |
