[askquestions]

I am an H1B visa holder. In 2007 I provided some extra professional service (consultation service if you will) for my employer which was later paid as a honorary amount. A usual I received my W2 form from my employer and I also received 1099-Misc form for the extra service that was provided. I know I have to show it as an income, but my question is -

Is it legal to receive 1099-Misc income from your employer (who actually sponsored H1B)?

I do know that being in H1B it is not legal to work other than your employer.

[IntlTax]

This is not a tax question. It is an immigration law question. You need to pay the tax on the income, regardless of whether your immigration status allowed you to receive this type of income. The IRS doesn't share its information with the INS.

[The Texas Tax Expert]

I agree with IntlTax. This issue has come up over and over again. For tax, you report all income regardless of the source. Even if you rob a bank, you are supposed to report the income!

From an immigration perspective, I don't believe it is legal to work as an independent contractor and violating the terms of your visa can have longer run implications, so it is never a good idea.

[askquestions]

Thanks for your reply...

I understand that I have to pay taxes on the income. My question is -

Can you receive 1099-Misc income and is it legal to receive from an employer who actually sponsored H1B?

[AtlantaTaxExpert]

No, it is NOT legal, but, again, we are TAX experts, NOT immigration attorneys.

In my OPINION, it is not a serious violation of the provisions of your visa, but it IS a violation and, as TTE said, NOT a good idea.

However, if the INS/USCIS would decide to go after anyone for this violation, it would probably be the EMPLOYER who got nailed, not the employee, because the EMPLOYER is the one with the power in this case.

After all, what is the employee supposed to do: object to getting paid under the Form 1099 and get fired?