Check out some similar questions!

mike582 · Aug 28, 2009, 08:18 AM

Hi,

I've been living and working in the US as a L1B (intracompany transfer) holder for last year with few short couple week trips back to my home country in Europe. However, techincally I'm employed in my home country in Europe, therefore my income is not generated in the US. The only income in US might be some revenue as savings interest, investments in securities, etc. but less than 5000$

My question is, should I file any tax-forms in such situation ? If yes, could you please specify which ones? And if that's the case, what is % that I would have to pay in taxes from my income outside the US?

Thanks,

Mike

AtlantaTaxExpert · Aug 28, 2009, 12:17 PM

If you stayed beyond 183 days, your income, regardless of its source, is considered to be earned WITHIN the U.S. and thus subject to both state and local income taxes.

As to which form to file, that depends on the exact duration of your stay. If you provide a timeline as to when you arrived in the U.S. in 2008, I can advise you accordingly.

MukatA · Aug 31, 2009, 01:32 AM

Please explain "..techincally I'm employed in my home country...".
On L1B mostly you are an employee of a U.S. company. Are you being paid by a foreign company?

mike582 · Aug 31, 2009, 08:16 AM

Hi, thanks for your quick replies...

1) I arrived in the US in April 2008.
2) Yes, I am being paid by a foreign company.

mike582 · Aug 31, 2009, 08:52 AM

Also, I wanted to note that I've been paying foreign country taxes from my income. Can I claim foreign tax credit when filling US taxes ?

AtlantaTaxExpert · Aug 31, 2009, 10:15 AM

If you have been in the U.S. since April 2008, then for BOTH 2008 and 2009, you need to file a tax return.

For 2008, you need to file a dual-status return.

For 2009, you will file as a resident alien (which is the same return that U.S. citiziens file) if you stay past 31 December 2009.

In both cases, you can claim the Foreign Tax Credit by filing Form 1116 if you do NOT claim a credit for the U.S. taxes paid on your home country's tax return.

IntlTax · Sep 2, 2009, 04:55 PM

If you are performing services in the U.S. (regardless of where your employer is located and regardless of where you are paid), the income is U.S. source income. You cannot claim foreign tax credits for foreign taxes paid on U.S. source income.

MukatA · Sep 3, 2009, 12:18 AM

Exact answer can only be provided after more info:
When did you enter the U.S. on L1? After you entered the U.S. the number of days spent in the U.S. and outside U.S. in 2008 and 2009? Are you single or married?