4.2 Form I-9 Employment Eligibility, E-Verify & Nonresident Aliens

Form I-9 Employment Eligibility, E-Verify & Nonresident Aliens

Under the Immigration Reform and Control Act of 1986 (IRCA) and Immigration and Nationality Act (INA) § 274A, all U.S. employers are legally required to verify the identity and employment authorization of every individual hired for employment in the United States. In addition, employers interacting with the federal E-Verify system and those employing nonresident aliens (NRAs) must navigate specialized statutory workflows and tax withholding computations.

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1. Form I-9 Section-by-Section Compliance & Deadlines

Form I-9 (Employment Eligibility Verification) published by U.S. Citizenship and Immigration Services (USCIS) is divided into three distinct operational sections, each governed by strict statutory timelines:

+-----------------------------------------------------------------------------+
|                       FORM I-9 STATUTORY TIMELINES                          |
|                                                                             |
|   SECTION 1: Employee Information and Attestation                           |
|   - Completed by: The Employee (or preparer/translator)                    |
|   - Statutory Deadline: No later than the FIRST DAY of work for pay (Day 1) |
|   - Attestation: U.S. Citizen, Noncitizen National, LPR, or Authorized Alien|
|                                                                             |
|   SECTION 2: Employer Review and Verification                               |
|   - Completed by: The Employer or Authorized Representative                 |
|   - Statutory Deadline: Within THREE BUSINESS DAYS of first day of work     |
|   - Actions: Physically examine original, unexpired documents; record info  |
|                                                                             |
|   SECTION 3: Reverification and Rehires                                     |
|   - Completed by: The Employer                                              |
|   - Trigger: Prior to expiration of temporary work authorization, OR        |
|              When rehiring an employee within 3 years of initial I-9 date   |
+-----------------------------------------------------------------------------+

Section 1: Employee Attestation Rules

• Must be completed and signed by the employee between the time a job offer is accepted and the end of their first day of work for pay.
• Employees must declare their citizenship/immigration status:
  1. A citizen of the United States.
  2. A noncitizen national of the United States (e.g., American Samoa).
  3. A lawful permanent resident (must provide USCIS / Alien Registration Number).
  4. A noncitizen authorized to work (must provide expiration date, and Alien/USCIS Number, Form I-94 Admission Number, or Foreign Passport details).
• If a preparer or translator assists the employee, the Preparer/Translator Certification must also be executed.

Section 2: The "3-Day Rule" for Employer Verification

• The employer (or authorized agent) must examine original, unexpired documents presented by the employee and complete Section 2 within 3 business days of the employee's first day of work for pay.
• Example: If an employee starts work on Monday, Section 2 must be fully completed by Thursday.
• If an employee is hired for less than 3 business days, Section 1 and Section 2 must be completed on or before the first day of work for pay.

[!IMPORTANT] Remote Document Examination (USCIS Alternative Procedure): Effective tax year 2023, employers enrolled in good standing in E-Verify may utilize an authorized alternative remote examination procedure (examining digital copies via live video interaction) in lieu of physical in-person inspection. Non-E-Verify employers must continue to physically inspect original documents in person.

Section 3: Reverification Protocols

• When Required: Must be completed on or before the date an employee's temporary employment authorization expires (as documented in Section 1 or Section 2 List A / List C).
• When NOT Required (Exam Trap):
  • List B Identity Documents: U.S. Driver's licenses, state ID cards, etc., that expire after initial verification never require reverification.
  • U.S. Citizens & Noncitizen Nationals: Form I-9 is never reverified for U.S. citizens, even if their U.S. Passport expires.
  • Lawful Permanent Residents: Permanent Resident Cards (Form I-551) with 10-year expiration dates do not require reverification upon expiration.

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2. Acceptable Document Framework: Lists A, B, and C

Employees must be permitted to choose which acceptable documents to present from the USCIS Lists of Acceptable Documents:

+-----------------------------------------------------------------------------+
|                     FORM I-9 ACCEPTABLE DOCUMENT MATRIX                     |
|                                                                             |
|              EITHER                         OR                              |
|        +-----------------+         +-----------------+-----------------+    |
|        |     LIST A      |         |     LIST B      |     LIST C      |    |
|        | (Identity AND   |         | (Identity ONLY) | (Work Auth ONLY)|    |
|        |  Work Auth)     |         |                 |                 |    |
|        +-----------------+         +-----------------+-----------------+    |
|        | - U.S. Passport |         | - State Driver's| - Unrestricted  |    |
|        | - Permanent     |         |   License / ID  |   SS Card       |    |
|        |   Resident Card |         | - Military ID   | - Certified     |    |
|        |   (Form I-551)  |         | - School ID     |   Birth Cert.   |    |
|        | - Employment    |         |   with photo    | - Consular Rpt. |    |
|        |   Auth Document |         | - Voter Reg.    |   of Birth      |    |
|        |   (Form I-766)  |         |   Card          |   (Form FS-240) |    |
|        +-----------------+         +-----------------+-----------------+    |
+-----------------------------------------------------------------------------+

Restricted Social Security Cards (Unacceptable List C Documents)

An official Social Security card is an acceptable List C document only if it is unrestricted. A Social Security card containing any of the following legends is unacceptable for Form I-9 List C:

1. "NOT VALID FOR EMPLOYMENT" (issued to noncitizens not authorized to work; obtained solely for non-work purposes like driver's licenses or tax records).
2. "VALID FOR WORK ONLY WITH DHS AUTHORIZATION" (issued to individuals with temporary work authorization; must be accompanied by an unexpired DHS work document, qualifying under List A instead).
3. "VALID FOR WORK ONLY WITH INS AUTHORIZATION" (legacy version of the DHS legend; similarly restricted).

Prohibition Against Document Abuse (Unfair Documentary Practices)

Under INA § 274B, employers are strictly prohibited from:

• Demanding specific documents (e.g., insisting on a U.S. Passport or Social Security card).
• Requesting more or different documents than required by law.
• Refusing to honor genuine, unexpired documents that reasonably appear on their face to be authentic and relate to the person presenting them.

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3. Form I-9 Document Retention Formula

Federal regulations (8 CFR § 274a.2) dictate that employers must retain completed Forms I-9 (paper, electronic, or microfilm/microfiche) for a statutory duration calculated using the 3-Year / 1-Year Rule.

+-----------------------------------------------------------------------------+
|                        FORM I-9 RETENTION FORMULA                           |
|                                                                             |
|   RETENTION DEADLINE = The LATER of:                                        |
|   (1) Three (3) years from the employee's FIRST DAY OF WORK (Hire Date)     |
|                                    OR                                       |
|   (2) One (1) year from the employee's DATE OF TERMINATION (Separation)     |
+-----------------------------------------------------------------------------+

$\text{Form I-9 Retention Date} = \max\big(\text{Date of Hire} + 3\text{ years},\; \text{Date of Termination} + 1\text{ year}\big)$

Retention Computational Scenarios:

[!WARNING] Audit Notice Rule: When ICE, DOL, or DOJ officers serve a formal Notice of Inspection (NOI), the employer must produce all requested Forms I-9 within 3 business days.

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4. E-Verify Operations & Tentative Nonconfirmation (TNC) Workflow

E-Verify is an Internet-based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA). It electronically compares information from an employee's Form I-9 against records in SSA and DHS databases.

+-----------------------------------------------------------------------------+
|                         E-VERIFY TNC RESOLUTION WORKFLOW                    |
|                                                                             |
|   [EMPLOYER CREATES E-VERIFY CASE WITHIN 3 BUSINESS DAYS OF HIRE]           |
|                                  |                                          |
|          +-----------------------+-----------------------+                  |
|          |                                               |                  |
|          v                                               v                  |
|   [EMPLOYMENT AUTHORIZED]                     [TENTATIVE NONCONFIRMATION]   |
|   - Case closed successfully                  - Mismatch with SSA or DHS    |
|                                                          |                  |
|                                                          v                  |
|                                               [EMPLOYER NOTIFIES EMPLOYEE]  |
|                                               - Issues Further Action Notice|
|                                               - Employee has 10 days        |
|                                                          |                  |
|                                  +-----------------------+                  |
|                                  |                                          |
|                                  v                                          |
|                    [EMPLOYEE CHOOSES ACTION]                                |
|                    |                       |                                |
|           +--------+                       +--------+                       |
|           | CONTESTS TNC                            | DOES NOT CONTEST      |
|           v                                         v                       |
|   [EMPLOYER ISSUES REFERRAL]                [FINAL NONCONFIRMATION (FNC)]   |
|   - Employee has 8 federal gov working days - Employer must terminate      |
|     to contact SSA or DHS                     employment or notify DHS      |
|   - NO ADVERSE ACTION PERMITTED                                             |
|     during resolution period                                                |
+-----------------------------------------------------------------------------+

Step-by-Step TNC Handling Protocol

1. Case Creation: Employer must initiate the E-Verify query no later than the third business day after the employee starts work for pay.
2. TNC Issuance: If database records do not immediately match, E-Verify returns a Tentative Nonconfirmation (TNC) from SSA, DHS, or both (dual TNC).
3. Further Action Notice: Employer must download and print the Further Action Notice, review it privately with the employee, and have the employee sign the notice indicating whether they choose to contest or not contest within 10 federal government working days of case issuance.
4. Referral Process: If the employee contests, the employer issues the Referral Date Confirmation. The employee has 8 federal government working days from the referral date to contact the designated agency (SSA field office or DHS customer service) to resolve the discrepancy.
5. Protection Against Adverse Action: The employer cannot suspend, terminate, cut hours, delay training, or withhold wages from an employee while their TNC case is being actively resolved.
6. Final Nonconfirmation (FNC): If the employee fails to contact the agency within 8 working days, or if the agency cannot verify authorization, E-Verify issues a Final Nonconfirmation (FNC). The employer must then terminate employment or submit notice to DHS explaining why the individual continues to work.

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5. Nonresident Alien (NRA) Payroll Withholding Rules

A Nonresident Alien (NRA) for tax purposes is an individual who is neither a U.S. citizen nor a resident alien under the green card test or substantial presence test under IRC § 7701(b). NRAs are taxed only on U.S.-source income, and federal income tax withholding is governed by specialized procedures under IRS Notice 1392 and Publication 15-T.

Special Form W-4 Completion Rules for NRAs

Because nonresident aliens are generally disallowed the standard deduction under IRC § 63(c)(6), standard payroll withholding tables would significantly under-withhold taxes. Therefore, the IRS mandates specific Form W-4 completion instructions:

+-----------------------------------------------------------------------------+
|                     NONRESIDENT ALIEN (NRA) W-4 RESTRICTIONS                |
|                                                                             |
|   Step 1(c): MUST select "Single or Married Filing Separately"              |
|              (Regardless of actual marital status)                          |
|                                                                             |
|   Step 2:    Complete ONLY if holding multiple jobs simultaneously          |
|              (Do NOT check Box 2(c) unless working 2 jobs concurrently)    |
|                                                                             |
|   Step 3:    Dependents generally RESTRICTED (Allowed only for residents     |
|              of Canada, Mexico, South Korea, or India under treaty terms)   |
|                                                                             |
|   Step 4:    4(a) Other Income: Allowed                                     |
|              4(b) Deductions: CANNOT BE CLAIMED (Disallowed)                |
|              4(c) Extra Withholding: Allowed                                |
|                                                                             |
|   Exemption: CANNOT claim "EXEMPT" status in Step 4 space                   |
+-----------------------------------------------------------------------------+

The Publication 15-T Wage Offset Calculation

When calculating federal income tax withholding for an NRA on regular wages, the employer must add a statutory dollar amount (the "NRA wage offset amount" from IRS Pub 15-T) to the employee's gross taxable wages solely for the purpose of looking up withholding in the tax tables.

+-----------------------------------------------------------------------------+
|                   NRA FEDERAL INCOME TAX CALCULATION STEPS                  |
|                                                                             |
|   STEP 1: Determine actual gross wages subject to FITW.                     |
|                                                                             |
|   STEP 2: Add the Pub 15-T NRA Wage Addition amount based on pay frequency  |
|           and Form W-4 version (e.g., Biweekly = ~$415.40).                 |
|                                                                             |
|   STEP 3: Apply the Single / MFS tax bracket table to the MODIFIED sum.     |
|                                                                             |
|   STEP 4: The resulting tax is the federal income tax to withhold.          |
|           (Do NOT add the offset to gross pay or FICA taxable wages!).      |
+-----------------------------------------------------------------------------+

Tax Treaties & Form 8233

• If a nonresident alien qualifies for an exemption from withholding under an income tax treaty between the United States and their country of residence, the employee must submit Form 8233 (Exemption From Withholding on Compensation for Independent (and Certain Employee) Personal Services of a Nonresident Alien Individual) to the employer.
• The employer must review Form 8233, verify the employee's Taxpayer Identification Number (SSN or ITIN), sign the certification, and forward a copy to the IRS within 5 calendar days of acceptance.

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6. Comprehensive Computational Example: NRA Paycheck Withholding

Scenario:

An NRA employee from France works as an engineer in the U.S. and earns $3,000.00 biweekly in 2026. The employee submits a valid 2026 Form W-4 marked Single with no other adjustments. The applicable IRS Publication 15-T biweekly NRA wage offset addition is $415.40. Social Security (6.2%) and Medicare (1.45%) apply fully.

+-----------------------------------------------------------------------------+
|                     NRA PAYCHECK COMPUTATIONAL LEDGER                       |
|                                                                             |
|   Gross Wages Earned:                                           $3,000.00   |
|                                                                             |
|   TAX CALCULATIONS:                                                         |
|   1. Federal Income Tax Withholding (FITW):                                 |
|      - Actual Taxable Wage:                         $3,000.00               |
|      - Pub 15-T NRA Biweekly Offset Addition:        + $415.40               |
|      - Wage Used for Tax Table Lookup:              $3,415.40               |
|      - FITW from Single Biweekly Table (Hypothetical):    $342.00           |
|                                                                             |
|   2. Social Security Tax Withholding (FICA OASDI):                          |
|      - Calculated on ACTUAL Gross: $3,000.00 x 6.2% =     $186.00           |
|                                                                             |
|   3. Medicare Tax Withholding (FICA HI):                                    |
|      - Calculated on ACTUAL Gross: $3,000.00 x 1.45% =     $43.50           |
|   -----------------------------------------------------------   ---------   |
|   TOTAL TAX DEDUCTIONS:                                           $571.50   |
|   NET TAKE-HOME PAY ($3,000.00 - $571.50):                      $2,428.50   |
+-----------------------------------------------------------------------------+

$\text{FITW Wage Base} = \$3,000.00 + \$415.40 = \$3,415.40$ $\text{FICA OASDI} = \$3,000.00 \times 6.2\% = \$186.00$ $\text{FICA HI} = \$3,000.00 \times 1.45\% = \$43.50$ $\text{Total Tax Withheld} = \$342.00 + \$186.00 + \$43.50 = \$571.50$ $\text{Net Pay} = \$3,000.00 - \$571.50 = \$2,428.50$