[SAMIRAN SAHA]

Hi,

Few queries I have for Florida L1B employees..

1) Whether the salary can be paid in India for a L1B working in US and some allowances paid in US? If yes then how?

2)What are per-diem allowances? How this can be paid to a L1B employee?

3) If the complete salary to be paid in Florida, what would be the taxes botth for employee and employer?

Thanks
Sam

[MukatA]

You can get full payment in India, but it will be your U.S. income from the U.S. source. So it will be taxed in the U.S..

Even the allowance you get are your taxable income. You can deduct your job related expenses as itemized deduction.

If you live in Florida and work in Florida, then you will not have state income tax. Federal income tax is same for every state.

[Wildsporty]

You could probably receive more help by calling the Internal Revenue Service and talking to an IRS representative

I do not see any other answers so I will attempt to tell you what I can on the subject.

India does not have Social Security System, so if you are in the U.S. for less than 5 years than you do not have to pay Social Security Tax and it does not have to be withheld from your check. The employer also does not have to pay Social Security Tax. This also applies to medicare taxes.

I cannot answer how Florida handles state taxes, you would have to contact someone in Florida associated with the Department of Labor.

The Federal Withholding taxes , SUTA and FUTA taxes would be on the number of days a year you spend in the U.S. and in what capacity. The L1-B visa is for someone that knows special knowledge of the companies operations.

The rules state for the India tax treaty with the U.S. That Wages, slary, and similar compensation that a resident of India receives for performing labor or personal services as an employee in the U.S. is exempt from U.S. income tax if these 3 conditions are met:

a) The employee is in the U.S. for no more than 183 days during the tax year

b) The compensation is paid by or on behalf of an employer that is not a resident of India

c) The compensation is not borne by a permanent establishemtn, fixed base, or trade or business that the employer has in the other country.

If you are a teacher or researcher at a University or a student or apprentice training at the company there are some different rules.

If you are a permanent resident of India (have resided in India for at least 365 days out of the preceding 4 tax years) (Also if you have resided in India for 9 years or more out of the preceding 10 years)

India taxes on worldwide income. This means that you could pay federal taxes to both India and the U.S. if you do not fall under that tax treaty standards mentioned above.

Some companies will equal out pay for expatriates and alien employees working for them to make the taxes more equal.

The only way you can be paid in India for work in the U.S. is if your company has a branch company office in India. At that point you could be paid by the office in India as an expatriate employee to the U.S. There are many different rules for Expatriates. The office in India would need to find out what the expatriate rules are to pay in this manner. They are too complicated and varied for me to write them in here and I only have the ones for a U.S. employee going to a foreign country.

A per diem is paid for travel. It is to compensate you for meals and lodging. It should be paid to you by the Florida office as you will be spending it in Florida.

Please contanct the Internal Revenue Service for more information on taxes and withholdings or more questions on per diems.

You can find the Internal Revenue Service at the following website;
Internal Revenue Service

Perhaps someone else on here has more detailed information, this is the best I can do to help.

Shirley

[MukatA]

1. L1-B is work visa. Employer must withhold Social Security and Medicare taxes from your wages. There is no way that you can get it back.
2. Florida does not have state income tax.
3. There is no SUTA or FUTA that employee has to pay.
4. L1-B is work visa. There is no tax treaty benefit that you will get. You are paid by an employer in the U.S.
5. Yes, India taxes worldwide income. But on the income in the U.S. you must pay tax in the U.S. and the tax treaty avoids double taxation.

[SAMIRAN SAHA]

Is it legal for a company to pay per diem for L1 visa holders? And if yes, is there any time limit for that or they can pay the per diem for the full term of 5 or 7 yrs?
What if a person on L1 is getting salary in his home country and paid per diem in US, is that possible? If yes, how to implement it?

Please advice.
Thanks,

[Wildsporty]

First of all Mukata is correct on the Fica and Medicare as there is no totalization agreement with India (although one has been talked about) and you are not a student. I deal with students so am not as familiar with the L1-B visa.

The per diem is paid to cover meals and lodging for travel expenses. If the federal amount is used and it is paid in the U.S. it would follow the IRS guidelines.

The per diems we pay our employees for travel expenses are not taxable and not wages, if it is different for someone from India than maybe Mukata can comment.

I am not that familiar with India as our offices are in UK, SA, AU, NZ, and Canada.

Shirley

[MukatA]

Is it legal for a company to pay per diem for L1 visa holders? And if yes, is there any time limit for that or they can pay the per diem for the full term of 5 or 7 yrs?
What if a person on L1 is getting salary in his home country and paid per diem in US, is that possible? If yes, how to implement it?
please advice.
Thanks,

I have already answered this. Get paid anywhere, you must report it in the U.S. and pay taxes in the U.S. For per diem rates see publication 1542 Internal Revenue Service

Let us assume that some way you get paid in India and you are not liable to pay tax in the U.S. Then you must pay tax in India. India income tax effective rate is much higher than in the U.S.

[AtlantaTaxExpert]

Whether your reimbursement for daily living expenses are taxed or not depends on whether you are reimbursed based on an accountable or an unaccountable plan.

Let's assume for a week of work, you incur $355 in lodging expenses, $148 in meal expenses, and $29 in incidental expenses. You have a rental car, but that is paid for directly by the company.

Under an accountable plan, you pay the daily living expenses, then submit an expense report to get reimbursed for $529 in expenses ($355 plus $148 plus $29). This reimbursement is NOT taxable, nor is the rental car.

Under an unaccountable plan, you receive $90 per day (for a total of $630 for the week) in the form of a per diem stipend. No expense report is required, and you get to pocket the extra $101. The $630 IS taxable income. You can claim the expenses you incurred as an itemized deduction on your tax return.

In either case, the rental car is NOT taxable, because it is being paid for by the company and is provided to you for business use.

[SAMIRAN SAHA]

Hi,

Can Per-diem Allowances be paid from US or it has to be paid from India?

If it is paid from US, do I have to maintain all my expenses bills under accountable (or non-accountable) plan? Is this necessary?

If I do not maintain any bills then what are the consequences in FL?

Thanks

[AtlantaTaxExpert]

Samiran:

It does NOT matter from where it got paid.

If it is accountable, then it is NOT taxable.

If it is NOT accountable, then it IS taxable.

[SAMIRAN SAHA]

Many Thanks!