When the work year is split between two countries, the starting point is understanding your tax residency in each one, because that determines what needs to be reported and where. Each country has its own rules, and the same income can attract the attention of two tax authorities at once.
In the United States, someone who enters on an H-1B may be treated as a ‘resident alien’ for tax purposes, depending on time of presence and other IRS criteria. In that status, there is generally an obligation to report worldwide income, including what was earned in the other country.
To avoid paying tax twice on the same income, there are mechanisms such as the credit for taxes paid abroad, which often allows you to offset against your return what was already paid elsewhere. On the other side, the country of origin also applies its own residency and filing rules.
Because two systems are involved at the same time, this is a scenario that calls for consulting an international tax specialist and reviewing the current rules of each country, evaluating your specific situation in detail before filing.
Learn more about H-1B
- Initial validity
- 3 years
- Extension
- Up to 6 years total
- Annual cap
- 85,000 visas
- Processing
- 6-12 months
About the author
Victoria Harper
Editor-in-Chief
As a journalist and lead editor at Visto n’ Visa, Victoria helps ensure that immigration topics are covered in a clear, trustworthy, and easy-to-understand way. Her focus is on delivering useful, human, and relevant content for people exploring new paths abroad.