What if I'm H1-B visa holder and I stay for less than 183 days in US? Will I get tax exemption?

Probably not. The tax exemption does NOT apply if the source of your pay is a U.S. company.

However, if you are married, you can file jointly and both of you choose to be treated as resident aliens for the entire year of 2010.

If you need professional tax help with this, email me at [email protected] or [email protected].

Actually I work for an Indian IT company. The US bank is the client of my company.

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Originally Posted by needhelptax

What if I'm H1-B visa holder and I stay for less than 183 days in US? Will I get tax exemption?

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Your entire income is taxable. You must pay federal income tax as well state income tax. You are resident or non-resident or can choose to file joint return as resident (after you complete SPT in 2011) will depend upon when you entered U.S. and when you left U.S.

For WHOM you work is not relevant if you are being paid from a U.S. source. Hence, if the U.S. bank is paying you direct, in U.S. dollars (which is likely given that you are under a H-1B visa), then the income is subject to income taxes by both the U.S. government AND the state in which you worked and lived.

However, if the duration of your stay was less than 183 days, your job meets the IRS definition of a "temporary job", and you can claim your daily living expenses (rent and utilities, food, local transportation, incidental costs) by using Form 2106 to report those costs and by deducting them on Schedule A as an itemized deduction.

Since you are on an H1B, You are subject to Federal, State and FICA taxes. If you chose to file as a Resident, you will need to include your Income from India during the year. Will have to look at specifics and make a decision whether to file as Resident or Non-Resident.

I'm bit confused here. Though I'm getting paid in US dollars, the salary is being paid to me by my Indian company. The US bank is a client of the Indian service provider company.

I'm bit confused here. Though I'm getting paid in US dollars, the salary is being paid to me by my Indian company. The US bank is a client of the Indian service provider company.

Your H-1B visa status makes the source of the funds irrelevant. You earned the income inside of the U.S. which makes it taxable by the U.S.