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A nonresident alien individual (NRA) is generally subject to US income tax on two types of income categories:
Income that is “effectively connected” with a trade or business in the United States (so-called “ECI”); Income from US sources that is “fixed, determinable, annual or periodical” (so-called “FDAP” income)
ECI versus FDAP
When income is “effectively connected” with a US trade or business, the income is taxed at graduated rates. These are the same rates that apply to US citizens and residents (the highest marginal rate is 39.6%). Such “effectively connected income” ECI, is to be Read More
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