Our overseas contractor moved to the United States midproject. Do we need to revisit earlier payment instructions?

A contractor's move can change the source of later service income and may also change tax residency or documentation requirements. The old overseas payment instruction should be reassessed. Work location and tax status are separate questions, and neither should be inferred from the bank account.

A specific business-owner situation

An overseas developer relocates to the United States halfway through a six-month project. The company keeps paying under the original foreign-service exemption flag.

Illustrative example, not a client result.

What to establish before filing

1. Establish the move and work dates.
2. Request updated status information.
3. Separate prior and later service periods for analysis.

Which fact changes the answer?

Physical U.S. work can matter even before residency changes. Conversely, a status change may affect documentation beyond a single project's source allocation.

A mistake to avoid

Do not retroactively classify every project hour from the contractor's location on the final invoice date.

Records that support the decision

• Location records.
• Updated certificates.
• Contract milestones and invoices.

The decision to document

Update the vendor instructions prospectively and review earlier payments only to the extent the actual facts require correction.

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Related questions

• Our overseas customer withheld local tax from our fee. Can we automatically claim a U.S. foreign tax credit?
• We buy overseas equipment with U.S. installation included. Is the whole payment treated like buying goods?

Sources and editorial context

• IRS Publication 515: foreign-person withholding

General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.