How does the L-1 impact taxes?

The L-1 can affect your tax situation in the United States because it changes how you are seen by the American tax authorities. The topic involves both the transferred professional and the company, and the central point is tax residency.

Depending on the length of your stay in the country, you may come to be considered a tax resident (the so-called ‘resident alien’), which typically subjects your worldwide income to taxation in the U.S., not just income generated on American soil, a situation typical of those treated as ‘non-resident alien’. In addition to federal tax, there may be state and local taxation, depending on where you work.

Another point is how income is taxed. This depends on U.S. tax law and any tax treaties between the United States and your home country, which can help avoid double taxation for those who must report in more than one place. The rules are complex and vary case by case.

• Tax residency defines whether worldwide income is included in the calculation.
• There may be federal, state, and local taxes.
• Treaties between countries help avoid double taxation.

Since each personal and professional situation is unique, it is worth seeking expert guidance from accountants or tax advisors and confirming current obligations before making decisions, avoiding surprises with the tax authorities.

About the author

Victoria Harper

Editor-in-Chief

Meet the author

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.