Ask Experts Questions for FREE Help !
Ask
    pravee42's Avatar
    pravee42 Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jun 15, 2011, 09:55 PM
    Tax on per diem allowance in US
    Hi,

    I am an Indian citizen working for an American based company in India. Now I came to US on L1 Visa (Blanket). My salary structure for this US assignment is as follows.
    - I will continue to get India salary in India (with tax for that being paid in India)
    - I will be paid $5000 in US every month as "cost of living allowance" (per diem)
    - My stay in US will be for 6 months.

    My company told me like if I submit bills then I don' t have to pay tax for that amount in the allowance. If I don' t submit the bills (after returning back to India) I have to pay tax in India.
    Also I was asked to take SSN after reaching US.

    Kindly let me know whether I should pay tax in US for my allowance. If so, do I have to do it myself or my company will have to do it.

    Is there anything like if I pay tax in India then I don't have to pay tax in US.


    Thanks.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jun 16, 2011, 04:14 PM
    If you are in the U.S. for LESS that 183 days, AND your income source is from India, then your company is correct: you are NOT liable for U.S. income taxes.

    That 183-day time limit is ABSOLUTE: You stay for 184 days and the tax becomes liable for U.S. and state income taxes.
    pravee42's Avatar
    pravee42 Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Jun 17, 2011, 03:38 PM
    Comment on AtlantaTaxExpert's post
    Hi,

    Thanks for your response.

    That means even if I take SSN and I stay in US for less than 183 days I don't have to pay tax for the allowance as its source is from India. Is that right.

    If my stay goes more than 183 days, then do I need to pay tax for the allowance that I got from day 1?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Jun 18, 2011, 02:13 PM
    Actually, you would pay taxes on the per diem amount AND on your Indian salary starting on the 184th day. A dual-status return would be required.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Per diem/housing allowance question [ 3 Answers ]

Ok I work road construction and my employer gives us housing pay if we stay at a motel/hotel. It's only $35 a day, but better than nothing I guess. The question I have with it is that it's just added in a lump sum and taxed along with my regular wages. So I have to pay all the taxes out of of it...

US Dept of State M&IE Per diem allowance by majority shareholder in a CA C-corp [ 1 Answers ]

I have a question about the use of US Dept. of State foreign per Diem for M&I expenses for my own use while on business abroad. (Foreign per diems from the Dept. of State website) I own 90% of the stock in a California C corp, and am the only employee. (The IRS considers me a personal services...

Tax on Per-Diem [ 9 Answers ]

Hi I would be transferred to Plano, TX on an L1 VISA for a period of ~2 years. I would only be paid charges in US for housing etc. (actuals), per-diem (1600 per month) and car-expenses. I will continue to be paid my basic salary at my primary place of employment. What are the tax...

PEr-Diem Tax [ 1 Answers ]

Hi, is per-diem what a L1 person gets in US, is this taxable in US or not. I heard if you stay longer than 11 months in US per-diem is taxable otherwise not. Kindly clarify. And kindly provide the calculation matrix for various taxes like federal, GA state tax, SS tax, medical etc. Thanks SD

View more questions Search