Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Nonresident Income and Deductions

Taxation of Nonresidents

Source of Income

Nonresident aliens' foreign-source income is not subject to U.S. tax, so the source of each kind of income needs to be determined before filing.

Types and Sources of Income

Income type:

Source is determined by:


Where payer is incorporated


Payer's place of residence

Pension payments attributable to:

  • Contributions (employer or employee, pretax)
  • Earnings of domestic (U.S.) trusts

Where the services were performed

The U.S. is the source


Where property is located

Royalties from natural resources

Where property is located

Royalties from patents, copyrights, etc.

Where property is used

Salaries, wages, and other compensation for personal services

Where services are performed

Sale of inventory that was purchased

Where the inventory is sold (where title passes)

Sale of personal property (except inventory)

Tax home of seller

Sale of real property

Where the property is located

Scholarships and fellowships

Residence of grantor