I am on an H4 visa with an EAD. If I work for an Indian employer who pays me in my U.S. account, how will my taxes be handled? Will my Indian employer deduct taxes for payment in India, or will I need to report and pay taxes in the U.S.? What are the implications?
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2Are you asking about taxes in India, or taxes in the US?– littleadvCommented Aug 8 at 4:35
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To clarify, your permanent residence is in the US but your employer is headquartered in India?– NosjackCommented Aug 8 at 14:15
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I have H4 visa and EAD. Currently I am residing in US since 2019 and employer is headquartered in India– PalakCommented Aug 8 at 15:16
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@littleadv I want to know if I am employed by an Indian company and if he is ready to pay in US account, where I have to pay taxes?– PalakCommented Aug 8 at 15:19
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1@Palak if you're a US resident alien (filing Form 1040, not 1040-NR), you pay US taxes on global income. It doesn't matter if the company you work for is US-based or non-US-based. If you also pay income taxes in India, you may be able to offset some of that tax paid with the Foreign Earned Income Exclusion and/or the Foreign Tax Credit.– Stan HCommented Aug 8 at 16:07
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1 Answer
If you are physically present in the US while performing your work, then your wage income from that work is considered US-sourced income, and you are subject to US (federal and state) income tax and payroll taxes on that income. Where your employer is located and which account you are paid in are irrelevant.
Generally, if you work as an "employee", then your employer is required to withhold income taxes and the employer share of FICA taxes (Social Security tax and Medicare tax) for you, as well as pay the employer share of FICA taxes. If your employer cannot do this, then they are not ready to hire you as an "employee" to work in the US.
On the other hand, if the nature of your work is as an "independent contractor", then your employer would not need to withhold anything, and you would be responsible for paying the income taxes and Self-Employment Tax (which is both the employee and employer parts of the FICA tax).
