Hi :

Actually this is not L1. I mentioned L1 so that the understanding is easier.

I live in the US and have recently started working for a company in India.I was hired by them during my recent visit to India.Now,my question is ,can I ask a portion of my salary to be paid in India and take the rest as allowance in the US. The company at present do not have offices in the US. I know a friend of mine working for a reputed MNC was here on L1 and was taking allowance for nearly 2-3 years. I also know they still have people who are on L1 in the US and getting salary in India and allowance in the US. Now I am on EAD and can I also have an arrangement like that? Some salary in India and allowance in the US ! Is there a limit on the allowance? Will it have to change if the company opens there office in the US?

Help would be appreciated.

Thanks
Mukund

AtlantaTaxExpert

Mukund:

Once you exceed 183 days in country on the L-1 visa, your income, regardless of its source or where it is deposited, is considered, by law and by treaty, to be U.S.-sourced income and thus liable for taxation by the United States. That fact applies whether your employer has an office in the U.S. or not.

If your friend has been working in the U.S. for more than 183 days and is NOT paying taxes, then he is in violation of U.S. tax law.

MukatA

Both the U.S. and India want you to report your worldwide income on the tax return if you are a resident of the country.

If you are resident in the U.S., then any payment made by India company must be reported on the U.S. tax return.