U.S. Taxation of Common Visa Types: H1-B, F-1/J-1, B-1/B-2, TN, EB-1, and Others

There are many visas issued to nonresidents who travel to the United States for work or pleasure, along with permanent residence, better known as the "green card." Each visa type and the nature of the traveler's stay affect the traveler's U.S. tax liability.

U.S. visa holders will need to determine if they are treated as a resident or a nonresident in order to properly file their tax return. Some visas provide special exemptions to residency, which is typically determined using the Substantial Presence Test. Beyond these exemptions, there are elections and positions that can be taken by the individual to adjust their residency status. This can complicate employer reporting and withholding requirements which vary between residents and nonresidents.

Providing additional relief and further complicating the determination are treaty benefits. U.S. tax treaties with other countries contain provisions to eliminate double income taxation and often include totalization agreements to avoid double taxation of Social Security. Certain visa types are exempt from Social Security/Medicare taxes. Visa holders who are subject to Social Security/Medicare may benefit from social tax agreements that the U.S. has entered into. These "totalization agreements" are intended to avoid the double taxation of Social Security taxes. Tax practitioners working with nonresidents in the U.S. need to understand the U.S. tax implications by visa type and maximize applicable tax benefits.

Listen as Ragini Subramanian, Senior Manager at Eisner Advisory Group, explains the different classes of visas and each classification's income and withholding tax implications.

1. Common visa types
   1. H-1B: highly qualified professionals
   2. F-1/J-1: students and exchange students
   3. B-1/B-2: business and tourist travelers
   4. TN: skilled workers from Canada and Mexico
   5. Green card
   6. L-1 intracompany transferee
2. Income taxes
   1. Substantial presence test
   2. Visa-based exemptions
   3. Tax treaties
   4. Employer reporting obligations
3. Social Security/Medicare taxes
   1. Exemption
   2. Totalization agreements
4. Other considerations

The panelist will review these and other critical issues:

• Identifying specific visa types and their relative U.S. reporting and tax obligations
• How to determine specific treaty benefits available to neutralize U.S. taxation
• Which visa types are exempt from Social Security withholding and steps to obtain the exemption
• When is a nonresident required to file a U.S. income tax return?
• Employer obligations for reporting and withholding

Learning Objectives

After completing this course, you will be able to:

• Identify specific visa types and their related potential tax obligations
• Determine how totalization agreements affect Social Security
• Decide when withholding from specific nonresident income may be required
• Ascertain when certain nonresidents may be subject to U.S. income tax

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).