Self Employment tax exemption for NonResident Alien?

Forum|Forum|2 years ago
January 26, 2024
1 reply
7 views

A foreign nonresident alien partner (Schedule k-1) is exempt from Self Employment tax. How do I make ProConnect e

ProConnect Tax

This topic has been closed for replies.

Best answer by itonewbie

You didn't answer my questions, so I'd assume all those factors have been considered, it has been determined that the NRA partner is not liable for SECA, and that K-1/K-3 have been prepared accordingly.

In that case, there shouldn't be any number on the K-1 in Box 14 with Code A, should it? If there's no entry for Box 14, Code A in ProConnect, Sch SE won't be generated and no SE-tax will be computed. Nothing needs to be done.

itonewbie

Level 15

This has nothing to do with ProConnect but the technicality of how K-1/K-3 reporting should be done in relation to foreign partners.

Did the foreign partner reside in the US but did not have sufficient US days to meet SPT?

Was the guaranteed payment related in whole or in part to the services he/she rendered in the US?

Which country is the foreign partner a resident of, if there's a totalization agreement in effect?

What is reported on K-3? Which part of the guaranteed payment is US-source ECI?

Is the full amount of K-1, Line 4a reported on Line 14 with Code A?

---------------------------------------------------------------------------------Still an AllStar

C

CarlofAuthor

Level 2

There are two partners. One is a US redisdent. The other is a Nonresident Alien. According to Sec 6017, a Nonresident Alien is not subject to Self-Employment tax. I need to know how to have ProConnect show this so it clear to everyone as to why Self-Employment tax is not owed when the Schedule K-1 is issued.

itonewbieAnswer

Level 15

You didn't answer my questions, so I'd assume all those factors have been considered, it has been determined that the NRA partner is not liable for SECA, and that K-1/K-3 have been prepared accordingly.

In that case, there shouldn't be any number on the K-1 in Box 14 with Code A, should it? If there's no entry for Box 14, Code A in ProConnect, Sch SE won't be generated and no SE-tax will be computed. Nothing needs to be done.

---------------------------------------------------------------------------------Still an AllStar

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded