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G-5, A-3 and NATO-7 Domestics: Help Completing IRS Form W-4

IMPORTANT: HomeWork Solutions specializes in payroll and payroll tax compliance for household employers. We cannot assist clients with personal income tax matters per Internal Revenue Service Regulations. The following is provided as general background only, and all questions should be directed to professionals licensed to prepare personal income tax returns.

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 » IRS 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)

As a general rule, the smaller the number of withholding allowances the greater the amount of income tax that will be withheld from the payroll. If too much tax is withheld, it will be refunded at year end with the G-5 files his/her Federal income tax return.

A withholding allowance, in general, may be claimed for every dependent 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:

  1. 31 days during the current year, and
  2. 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

Newly Arrived G-5 Visa Holders

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 should claim zero withholding allowances on the form W-4 to avoid large, end of year tax obligations. 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. A non-resident alien files annual federal taxes with Form 1040-NR!

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 not entitled to withholding allowances on Form W-4. After the first tax 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 responsibility 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 over payment!

HomeWork Solutions can provide this general guidance, but the final determination rests with the employee.

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