IRC section 862(a)(3) and (4): foreign-source compensation for services and foreign-source royalties (26 U.S.C. 862(a)(3), (a)(4))
Pay for data collection work done outside the United States is foreign-source income, and so is a royalty for property used outside the United States. Foreign-source income paid to a foreign holder is not subject to US withholding.
Dated 18 Oct 2026Source checked 18 Oct 2026Basis: primary text
In the source's own words
“(3) compensation for labor or personal services performed without the United States; (4) rentals or royalties from property located without the United States or from any interest in such property, including rentals or royalties for the use of or for the privilege of using without the United States patents, copyrights, secret processes and formulas, good will, trade-marks, trade brands, franchises, and other like properties;”
Figures it counts in
It is shown on its own, not counted into a figure.
Cited in these 2 guides