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The issue of citizenship is unclear from the question and could make the first paragraph wrong. For example, U.S. citizens generally are subject to U.S. federal income tax on worldwide income, regardless of where they live. That's a U.S. citizen though. Thus, the first paragraph is likely wrong if the client is a U.S. citizen (unclear). Also, if you earn income from interest while living outside the U.S., even as a nonresident alien, you may still be required to pay federal income tax on that income if the income is effectively connected to a U.S. trade or business.  This is unclear though from the question (effectively connected to a U.S. business), especially given Keeper's core clientele (small business/gig-oriented). I'd say the core answer is mostly right because the rules are all over the place at the state level (second paragraph). In some cases, being a NRA makes the taxpayer's interest income subject to higher tax, whiles some states don't even tax interest income.