Do I need to pay tax in the US for the gratuity money that I received after moving to US from India? I got the gratuity money after I moved to US and I am filing tax as US resident as I am staying more than 8 months in US.

Please provide any link or documents for reference.

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    I would strongly recommend you seek legal tax advise to evaluate the context of what you got, from what, for what purpose and how it relates to what you are doing the US now, there is unfortunately no catch all set answer for this. Apr 1 '17 at 23:43
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    What do you mean by gratuity? The word normally means an extra payment for a service, like a restaurant tip. Do you mean that, or a payment from the company you joined, like a sgn on bonus? Or a payment to cover your expenses? Apr 2 '17 at 3:29
  • @DJClayworth In India by regulation, if an employee is in service for 5 or more years and then leaves the organization, a Company pays the employee a sum equivalent to 15 days of Basic pay for every year of service.
    – Dheer
    Apr 3 '17 at 4:26
  • In my view this will not be taxable in US as this was payment for services that you rendered when you were in India.
    – Dheer
    Apr 3 '17 at 4:28

If the 'gratuity' is a payment from your previous Indian company made when you left them, then the US tax system will treat it exactly the same as wages paid by your previous company.

Whether or not you need to pay taxes on your wages and gratuity will depend on whether your are considered resident in the US for tax purposes for this financial year. It is likely that you will be. Assuming you are, then the US requires that you pay tax on all income, wherever it is earned in the world. You will need to fill in a tax return and declare both your gratuity and your wages in India for that year.

India and the US have a 'double tax agreement', which means essentially that you won't be taxed twice if you have already paid tax on the gratuity and wages in India. But you do have to declare them.

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    A slight nudge pointing the OP to the mechanics by which double-tax would be avoided could increase the value of this answer. ie: in such a situation, the OP would likely claim a foreign tax credit for some of his/her taxes paid in India, thereby reducing US tax otherwise owing. Apr 4 '17 at 13:31

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