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    talgiri's Avatar
    talgiri Posts: 2, Reputation: 1
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    #1

    Nov 17, 2009, 10:29 AM
    Tax clarification for L1 receiving per diem alowance in US
    Dear Sir,

    I was in US on L1 Visa from 22nd Mar 2009 till 30th Sep 2009. During this period, I have received Per-Diem allowance of $90 per day. But, there was a deduction of Social Security (FICA), Federal Medicare, and Iowa state Tax. My wife was with me for 2 months (Aug and Sep) and I was on vacation to my home country for around 15 days. I was paying Tax in India for this duration as I was receiving my Indian Salary. Am I eligible for a Tax refund? Please advice.

    Regards
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,818, Reputation: 846
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    #2

    Nov 18, 2009, 09:52 AM
    It does not look like you exceeded 183 days in the USA due to your 15-day vacation.

    If your Indian salary was paid direct from your country IN India, then that salary is NOT subject to U.S. income taxes.

    If it was paid through a U.S. subsidiary, however, it IS subject to U.S. income taxes, and I suspect this to be the case because both FICA and Iowa state income taxes were withheld from your salary.

    Did they tax the $90 per diem?
    talgiri's Avatar
    talgiri Posts: 2, Reputation: 1
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    #3

    Nov 29, 2009, 03:10 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    It does not look like you exceeded 183 days in the USA due to your 15-day vacation.

    If your Indian salary was paid direct from your country IN India, then that salary is NOT subject to U.S. income taxes.

    If it was paid through a U.S. subsidiary, however, it IS subject to U.S. income taxes, and I suspect this to be the case because both FICA and Iowa state income taxes were withheld from your salary.

    Did they tax the $90 per diem??

    My Indian Salary I received in India was taxed as per Indian Income tax rules. But I am also taxed in US for the 90$ per diem I received in US. I was receiving around 80$ per day after tax. Can I file for returns? Will I get the FICA, State Tax and Federal also as returns??
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,818, Reputation: 846
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    #4

    Nov 30, 2009, 03:33 PM
    More than likely, you will get the state and federal INCOME tax refunded to you, because you will claim the per diem expense as a itemized deduction using Form 2106.

    In my opinion, the per diem is NOT subject to FICA (Social Security and Medicare) xaxes, so you would have to file Form 843 to claim a refund for those withholdings. I suspect that you would have a good case to get a refund of those taxes as well.

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