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I'm in US working with the parent company, my stay is about to extend 183 days. I don't get paid in US. My company in India under whose payroll I'm listed credits my Indian salary after deducting tax and it pays me a per diem for my stay in US. Do I need to pay tax in US and if so would it be prorated on my Indian income or just the per diem. And at what rate.

  • 1
    A note: your tax status also depends on your immigration status. On certain visas (like J and F), you won't be considered resident even if you stay more than 183 days, as long as you're in status (not breaking the immigration law). Also, if you don't have an L or H visa - you are breaking the immigration law. The fact that you're paid for your work in India is meaningless in this context. – littleadv Oct 16 '13 at 17:16
  • If you are deemed resident for tax purposes in the US you need to file and pay taxes on all your worldwide income. Normally it would net out at the highest rate in each category, since there is a tax treaty. – Spehro Pefhany Mar 8 '18 at 14:52
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The test of being "Resident for tax purposes" is more complicated than just whether you stay for 183 days or more. You can find a number of articles describing it: this is a good one. If you have spent 183 days in the US in the current year, you are usually considered a resident.

If you are a resident for tax purposes, then you file tax forms and pay tax like a US citizen, which would normally include paying tax on non-US income. (The tax treaty with India will prevent you paying double-tax on income, but that still means you may pay tax to both countries.)

However the important thing is that if your company has sent you to the US to work, then you should ask them for help with your tax situation - or at least pay for you to get professional advice. This is an expense you would not have incurred if they had not sent you to the US, so it's reasonable for them to pay it.

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If this is your first year, you may still be classified as "Non Resident Alien". If so then you are not liable to pay tax or file returns in your particular case.

Refer to IRS here "Even if you meet the substantial presence test, you can be treated as a nonresident alien if you are present in the United States for fewer than 183 days during the current calendar year, you maintain a tax home in a foreign country during the year, and you have a closer connection to that country than to the United States."
You are also not required to file any returns. Refer here

However if you are classified as "Resident Alien" then your tax treatment would be quite different. Your company should be able to help you.

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    But his stay extends 183 days... And since its happening now (mid-October), all the 183 are in the same calendar year. – littleadv Oct 16 '13 at 17:14
  • @littleadv: Agreed. Also a very valid question on type of Visa – Dheer Oct 17 '13 at 3:21

protected by Chris W. Rea Mar 8 '18 at 20:58

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