Saffysmom

does anyone know how does tax treaty work between uk and usa?

My husband will be working in US for UK based company who will be paying him in the UK in his uk bank account , his immigrant visa has been approved
so will become a green card holder.

when will he have to pay tax in US on his UK income or what is the amount he has to earn ?


Thanks

Bob

If he's a greencard holder and making the US his residence, then world wide income/assets are in the interest of the IRS.

The threshold before taxes are due, don't know for next year but you can find what it was in previous years in a couple of seconds of googling the IRS and you'll see roughly how much it has gone up each year to get an idea.

Will have to comply with FBAR/FATCA etc but there are hundreds of threads on the subject at the moment.

Pulaski

For a permanent resident (GC holder) his salary should be paid net of US income taxes and payroll deductions (Social Security), not UK income taxes and payroll deductions (NI).

Steve_

It's not really about the tax treaty, read IRS publication 519. http://www.irs.gov/pub/irs-pdf/p519.pdf

If you're an LPR you're resident in the US for tax purposes, period. So they must have a US payroll and put him on it. You cannot be on a UK payroll, unless he's physically there doing the work.

There is a social security totalization agreement between the US and the UK, https://www.socialsecurity.gov/inter...phlets/uk.html but given that he's an LPR and is presumably staying in the US permanently it doesn't really matter.

If there is no US payroll the logical thing to do is to be self-employed and invoice the UK company.

nun

What visa does he have?

As he is working in the US and will presumable become US tax resident his world wide income will be US taxable.

Whether US or UK payroll taxes are withheld will depend on how you apply the Totalization Agreement.

My next question is why are you asking these questions? Your husband's company should be paying for a qualified accountant to make sure taxes are done correctly and it is the company payroll department's responsibility to get tax withholding correct. If they are sending him to work in the US they should arrange his paycheck, taxes and payroll taxes correctly.

On another topic what arrangements has you company made for your health insurance while in the USA?

FatFrank

Saffysmom,
Just wanted to share with you the S*** load of mess that I got into at one point because I was paid in US dollars with a high portion of my US salary being sent to the UK. The salary sent to the UK was at a fixed monthly amount for the duration of the assignment that was based on the US/UK exchange rate on the day that I started the assignment. Anyway, over time the exchange rate moved and what was supposed to give me stability of UK finances ended up giving me a big US tax bill.

Not sure what what situation you will be in, but if similar to mine then it's probably a good idea to clarify the tax responsibilities around changing exchange rates if applicable. I sure wish I did. The rate went from around 1.45 to 1.9 at one point while I was on US assignment sending salary home.....LOL not.