Do visa holder pay US tax if out of country for >183 days?

Nov 4, 2020 35 Comments

https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

If I didn't work in US in the past years and relocated to US in July this year, I will not pass the Substantial Presence Test.

1. Does that mean that I am not a US tax resident for this year and will not be taxed by US for income between July and December?
2. Supposed that I liquidate my stock next year, would the capital gain tax be the difference between July price and sale price, or purchase price (occurred before July) and sale price?

My country of origin does not have any tax treaty with the US.

#workvisa #h1b #tax #facebook #google #apple #amazon

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TOP 35 Comments
  • Amazon
    izqzuybcr

    Go to company page Amazon

    izqzuybcr
    You pay taxes no matter what
    Nov 4, 2020 7
  • Microsoft / IT
    DilDosti

    Go to company page Microsoft IT

    DilDosti
    If you have a W2 originated from US, you need to pay. Now that you were outside for 183 days but taking last two years in to account you will be paying at resident tax rates.
    Nov 4, 2020 10
    • UiPath
      tg674

      Go to company page UiPath

      tg674
      Microsoft - You are wrong and what Facebook is saying it right. Go read up the code before accusing others.
      Nov 5, 2020
    • Microsoft / IT
      DilDosti

      Go to company page Microsoft IT

      DilDosti
      I am not a tax professional, I had a lengthy discussion with my CPA. If you are a tax professional then I don't have anything to say about.
      I know the code as I stayed 181 days out side of US and I did through this exercise.
      Nov 5, 2020
  • UiPath
    tg674

    Go to company page UiPath

    tg674
    As a non-resident you will be taxed on any and all income you earn in US. You will not have to pay any taxes or declare income earned outside US for this year.

    One disadvantage of filing as non-resident is that you will not be eligible for standard deduction (at least that used to be the code before the current reforms, please check the latest) and will have to itemize deductions.

    Your capital gains will be calculated based on original purchase price and your date of moving to US has no impact on it. It may be valuable to take advantage of lower capital gains tax this year for you as your overall US income will remain low, so look into that.
    Nov 5, 2020 5
    • OP
      Seems really arbitrary for them to apply the wash sale rule to this scenario if the tax code explicitly talk about loss deductions? I guess I need a tax consultant to confirm if they can twist it that way...
      Nov 5, 2020
    • UiPath
      tg674

      Go to company page UiPath

      tg674
      Yes, that's the best approach. Have a consultation with someone.
      Nov 5, 2020
  • Suppose u are from Canada, u will pay canadian tax this year as u have spent more than 183 days in Canada and passed the substantial presence test for Canada, which will be 10% higher than US tax, congrats.

    US will collect tax from ur regular payroll regularless, but Canada and US has a tax treaty, so u will only need to pay that 10% to Canada when u file ur canadian tax, but if there isn't a tax treaty between US and ur country, then u need to pay double tax I think.
    Nov 4, 2020 7
    • Developed country, China is a developing country u know, if u want to maintain ur social security then pay tax, otherwise u will lose all of it
      Nov 4, 2020
    • What are you talking about. You are saying another country would double tax you. I'm telling you that will not happen. They will just take the difference in percentages.
      Nov 4, 2020
  • Amazon
    foolAmazon

    Go to company page Amazon

    foolAmazon
    You'll still pay federal & state taxes on your US based income. You don't have to pay FICA tax on the US income and any taxes at all on the income from non US sources.
    Nov 4, 2020 1
    • OP
      How about capital gain tax between July and Dec?
      Is it base on July price and sale price, or purchase price (occurred before July) and sale price?
      Nov 4, 2020