Number: RS21732
Title: Federal Taxation of Aliens Working in the United States and Selected Legislation
Authors: Erika Lunder, American Law Division 
Abstract: A question that often arises is whether illegal aliens and other foreign nationals working in the United States are subject to U.S. taxes. The federal tax consequences for these individuals are dependent on (a) whether an individual is classified as a resident or nonresident alien and (b) whether a tax treaty or agreement exists between the United States and the individual's home country. Resident aliens are generally taxed in the same manner as U.S. citizens. Nonresident aliens are subject to different treatment, such as generally being taxed only on income from U.S. sources. Exceptions exist for aliens with specific types of visas or employment, and the provisions of a tax treaty or totalization agreement may reduce or eliminate taxes owed to the United States. Under H.R. 5140 (Economic Stimulus Act of 2008), which was signed into law on February 13, 2008, qualifying U.S. citizens and resident aliens may receive rebate checks so long as they provide Social Security numbers for themselves, their spouses (if filing a joint return), and any qualifying children. Other bills affecting the tax treatment of aliens include H.R. 279 and S. 43, both of which would address the unconstitutional manner in which totalization agreements are disapproved by Congress.
Pages: 6
Date: February 14, 2008