Withholding is only required if the nonresident individual or nonresident entity is paid more than $1500.00 during the calendar year. The tax must be withheld from any nonresident individual or nonresident entity (C or S corporation, partnership, or limited liability company) receiving personal services compensation in connection with a performance, entertainment, athletic event, a speech, or the creation of a film, radio, or television program.
Withholding is only required if the ITIN contractor is paid compensation of more than $1500.00 during the calendar year.
If, at the time payments are made, the payer doesn't believe the payments will exceed the $1500.00 level, then no withholding is required. However, if payments made later in the year cause the total of payments received to date to exceed $1500.00, then the payer is required to withhold the 4% from the payment that caused the total to exceed the $1500.00, as well as any subsequent payments.
The payer is not required to withhold tax from the additional compensation to make up for the tax that was not withheld on earlier payments. If the payer expects to pay a contractor more than $1500.00 during a year, the payer then must withhold 4% from all payments issued even if the first payment does not exceed the $1500.00.