First, when you say u201cUS companyu201d, I assume you mean a private-sector (non-federal-government) company in any of the 50 states or Washington D.C.The most important factor to consider is not the citizenship/residency status of the person (citizen, domestic, foreign, alien, whatever), but the nature of the work performed. If the work performed is federally-privileged, then withholding is likely a great idea, since that person will owe taxes on his earnings, and withholding will offset what he estimates that he will owe.However, since most work is not federally-privileged, then most withholding is done in error. The error is the erroneous thinking that the federal income tax applies to all work period, whether federally-privileged or not. See Lost Horizons to learn more, and to keep YOUR money!