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Tax Residency - Complication

Tax Residency - Complication

Old Mar 1st 2005, 3:28 pm
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Question Tax Residency - Complication

Hi All,

I have a query regarding my tax residency, I have reviewed some previous threads enough to get an idea of the answer, but there is a complication I don't see elsewhere.

I am over in the US on a B1 visa, actually a special case of the B1, a 'B1 in lieu of H1B' visa. That is, my organisation required an employee to complete a project in our New York office, I put my hand up and got the position. They organised the visa, and over I came. I arrived early December 2004. The projcet was due to last around 6 months, meaning that I would return to my normal UK duties in June. However like all good IT projects, its likely to overrun, they are talking about extending for a few months . The final point to note is that I am not employed by a US company, I am working in the US office, but employed by the UK office and paid in the UK.

So here are the query(ies), if I stay further than June (which the visa is valid for by the way), say till End August, would that put me as a Non-resident alien (or Resident Alien), meaning that I would have to file Tax returns in the US? I know that under the normal rules in publication 519 I would, due to 'substantial presence' test (would be > 183 days). However is this still the case as I am on a B1, employed in the UK, with no local income?

Appreciate any input or pointers anyone can give me.

Thanks
Gary
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Old Mar 1st 2005, 3:35 pm
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Default Re: Tax Residency - Complication

In case you would like to call IRS and ask, their number is 1-800-8291040. I called with a tax question last week and they couldn't answer at once, but they called me back the next day like they had promised.
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Old Mar 1st 2005, 3:49 pm
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Default Re: Tax Residency - Complication

Originally Posted by gfrost75
Hi All,

I have a query regarding my tax residency, I have reviewed some previous threads enough to get an idea of the answer, but there is a complication I don't see elsewhere.

I am over in the US on a B1 visa, actually a special case of the B1, a 'B1 in lieu of H1B' visa. That is, my organisation required an employee to complete a project in our New York office, I put my hand up and got the position. They organised the visa, and over I came. I arrived early December 2004. The projcet was due to last around 6 months, meaning that I would return to my normal UK duties in June. However like all good IT projects, its likely to overrun, they are talking about extending for a few months . The final point to note is that I am not employed by a US company, I am working in the US office, but employed by the UK office and paid in the UK.

So here are the query(ies), if I stay further than June (which the visa is valid for by the way), say till End August, would that put me as a Non-resident alien (or Resident Alien), meaning that I would have to file Tax returns in the US? I know that under the normal rules in publication 519 I would, due to 'substantial presence' test (would be > 183 days). However is this still the case as I am on a B1, employed in the UK, with no local income?

Appreciate any input or pointers anyone can give me.

Thanks
Gary
I think you will find the answer is no you will not be liable for US Tax. I assume your employer is still making tax deductions. in the UK. I am not an expert on this but you may need to ask the question again if you are here longer than 12 months.
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Old Mar 1st 2005, 4:08 pm
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Default Re: Tax Residency - Complication

Originally Posted by tony126
I think you will find the answer is no you will not be liable for US Tax. I assume your employer is still making tax deductions. in the UK. I am not an expert on this but you may need to ask the question again if you are here longer than 12 months.
The rules for tax residency are that you're resident if you're in the US for more than 183 days in one calendar year. Full rules rae here: IRS Resident & Non-Resident Aliens. However, as has already been suggested, you really need to talk to the IRS about this particular case.
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Old Mar 1st 2005, 4:16 pm
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Default Re: Tax Residency - Complication

I cant answer your TAX question, but I came over here originally on a B2 visa which in my passport was valid for a year and a half, however you are only allowed to stay in the US in 6 month increments, up to a maximum of the Visa. I also had to prove I wasnt working. So be careful you dont get into trouble staying over the 6 months at any one time.
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Old Mar 1st 2005, 4:49 pm
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Default Re: Tax Residency - Complication

This is an evil one, eh? I'm not sure what the answer is, but my instinct would be to get out at six months and not deal with any of the crap. If you're here less than six months, you're clearly a non-resident and not taxable on foregin source income. More than six months and you're likely to get into a fight when you try and get a sailing permit from the tax office. My first reaction would have been to say you are a visitor with no US-source income and that you have a closer connection to a foreign country. But you cannot claim a closer connection if you're here for more than 183 days. So, I'd tell your boss to send someone else to finish the work.
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Old Mar 1st 2005, 5:53 pm
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Default Re: Tax Residency - Complication

Thanks for the input all, I think you're right, time to call the IRS.

In some respects it would be good to stay to finish the project, a) because its a good project and b) I'm enjoying my time in NY, but I also don't want to complicate matters or get fragged by the tax man.

Thanks again
Gary
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Old Jul 20th 2005, 9:26 pm
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Default Re: Tax Residency - Complication

hi..
I am in the EXACT identical situation as you except from a different country.
i came to california san jose for a project. the INS put mine I-94 good for 6 months and My B1 visa (in lieu of H1B) is vaild for 1 yr.

i arrived on 3rd of july, and is planned to go back jan 4th..then come back to san jose after 2 weeks break and stay for another 6 months till late june/july 2006

i'm pretty sure i'm gonna exceed the >183 days for the SPT test.. since the project is for 1 yr.
but i'm not sure wht tax status i hold..??!!

I was hoping maybe you can shed some light, from the IRS?

i was getting confused/frustrated and wanting to call them.
anyway, hope you solved your tax problem!

would appreciate any help..


Originally Posted by gfrost75
Hi All,

I have a query regarding my tax residency, I have reviewed some previous threads enough to get an idea of the answer, but there is a complication I don't see elsewhere.

I am over in the US on a B1 visa, actually a special case of the B1, a 'B1 in lieu of H1B' visa. That is, my organisation required an employee to complete a project in our New York office, I put my hand up and got the position. They organised the visa, and over I came. I arrived early December 2004. The projcet was due to last around 6 months, meaning that I would return to my normal UK duties in June. However like all good IT projects, its likely to overrun, they are talking about extending for a few months . The final point to note is that I am not employed by a US company, I am working in the US office, but employed by the UK office and paid in the UK.

So here are the query(ies), if I stay further than June (which the visa is valid for by the way), say till End August, would that put me as a Non-resident alien (or Resident Alien), meaning that I would have to file Tax returns in the US? I know that under the normal rules in publication 519 I would, due to 'substantial presence' test (would be > 183 days). However is this still the case as I am on a B1, employed in the UK, with no local income?

Appreciate any input or pointers anyone can give me.

Thanks
Gary
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