[KiranP]

Hi,

I'm working in Milwaukee, WI on L1-B Visa for 3 months. I started here on Oct 11th'06 and will be here till Jan7th-2006. My company is a indian subsidiary and I have transferred here on L1-B. My salary is 5224 USD per month. My salary is paid by the Indian company (not the US parent company).


Could you please clarify the following:
1.

I went through the IRS 901 publication, it states the following:

(i)
Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U.S. income tax if the residents:

* Are present in the United States for no more than 89 days during the tax year, and

* Do not have a fixed base regularly available to them in the United States for performing the services.
If they have a fixed base available, they are taxed only on income attributable to the fixed base.
(ii)
Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U.S. income tax if the residents meet three requirements.

* They are present in the United States for no more than 183 days during the tax year.

* The income is paid by, or on behalf of, an employer who is not a resident of the United States.
The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States.

Since my salary will be paid by Indian company, whether the above mentioned statement in (ii) 2nd bullet will be applicable?
Does it mean to say, I don't have to pay any tax?

2.

Correct me, if I'm wrong : "Tax year is 1-Jan-2006 to 31-Dec-2006"
I'm staying totally 89 days (11-Oct-2006 to 7-Jan-2007). However in the Tax year for 2006 I'm staying only 82 days (11-Oct-2006 to 31-Dec-2006)? Is this correct?
Whether I'm exempted from tax If this is the case?

3. In case, if I have to file IT Returns why I can't I file using e-filing for efiling Form 1040NR-EZ or 1040NR ?

4. Since, my Indian company is paying Salary so will they give me w-2 form or US branch?

Thanks in advance for help
Kiran

[AtlantaTaxExpert]

Kiran:

Given these facts, I believe you are EXEMPT from U.S. taxes. You should verify this with your company, but the facts seem to indicate your exemption.

[taxsearcher]

ATE is right in saying that you really need to check with your company. If for example your company has a permanent establishment in the US and the cost of your salary is borne by that permanent establishment, then your salary would not be exempt under the treaty article that you quoted.