1099 Misc

[JG EA]

I can't find that this wouldn't be required.

An S-Corp sending a 1099 Misc to a Canadian who did subcontracting for the corp.

Do you agree that WOULD be required?

[veritas]

Were the services

I can't find that this wouldn't be required.

An S-Corp sending a 1099 Misc to a Canadian who did subcontracting for the corp.

Do you agree that WOULD be required?

performed by the foreign national in the U.S.?

[JG EA]

I actually am not sure but I think over the internet from Canada.

[Gretel]

I would be required if work performed was in the US. Might get tricky with internet business.

[JG EA]

I would be required if work performed was in the US. Might get tricky with internet business.

I'm not thinking clearly these couple of weeks and am missing some things. What do you mean by tricky? Like a tax return to Canada?

[Gretel]

I'm not thinking clearly these couple of weeks and am missing some things. What do you mean by tricky? Like a tax return to Canada?

Sorry, should have been more clear. I mean it is a challenge to determine if services were actually performed in the US if done only by internet. For state nexus you can check out the state rules but I never heard about "US" nexus. Maybe only actual physical presence counts.

But if it would trigger nexus for an initial consultation visit I don't know.

Look at page 40/41 in this summary:

http://www.gdblaw.com/images/doc/BusinessUSA_Eng.pdf

[Burke]

I can't find that this wouldn't be required.

An S-Corp sending a 1099 Misc to a Canadian who did subcontracting for the corp.

Do you agree that WOULD be required?

I doubt if the IRS would care about sending one to a Canadian resident, unless they were expecting him to file a US tax return. You could, and I don't think there would be any harm in it.

[veritas]

This subject is interesting

let's assume in this case JG Ea's client hired an individual that worked in Canada. The work was done over the internet and at no time did the Canadian perform services in the US.

So a 1099misc is definitely out.

But on the other hand I believe the payment was subject to 30% federal witholding. That is unless the Canadian provided exempt documentation before the payment was made.

The form the Canadian should have provided is W-8ben.

This is my take and if anyone else has more to add or a correction it would be helpful.

This is not an uncommon occurence in today's (I'm sick of the phrase) "global economy".

I could find nothing in TTB.

[JG EA]

let's assume in this case JG Ea's client hired an individual that worked in Canada. The work was done over the internet and at no time did the Canadian perform services in the US.

So a 1099misc is definitely out.

But on the other hand I believe the payment was subject to 30% federal witholding. That is unless the Canadian provided exempt documentation before the payment was made.

The form the Canadian should have provided is W-8ben.

This is my take and if anyone else has more to add or a correction it would be helpful.

This is not an uncommon occurence in today's (I'm sick of the phrase) "global economy".

I could find nothing in TTB.

And all because of that little box on the return that had to be answered!
Thanks all.

[Gretel]

let's assume in this case JG Ea's client hired an individual that worked in Canada. The work was done over the internet and at no time did the Canadian perform services in the US.

So a 1099misc is definitely out.

But on the other hand I believe the payment was subject to 30% federal witholding. That is unless the Canadian provided exempt documentation before the payment was made.

The form the Canadian should have provided is W-8ben.

This is my take and if anyone else has more to add or a correction it would be helpful.

This is not an uncommon occurence in today's (I'm sick of the phrase) "global economy".

I could find nothing in TTB.

Yes, interesting indeed. I looked at the treaty with Canada (http://www.irs.gov/pub/irs-trty/canada.pdf). I talks about a having a "fixed base" to be subject to withholding and if subject, then only 10% of first $5,000. It seems like an internet business has to provide form 8233 and is not subject to backup withholding.