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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15606
Experience:  15years with H & R Block. Divisional leader, Instructor
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One of my friends asked me this question: 1. He is working

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One of my friends asked me this question:

1. He is working on H1 in USA for a company which has India branch too.
2. His company is paying him salary in USA(in $) and some salary in India(in INR) too.

He just wants to know if he is allowed to be paid in India (by the India branch of his employer) if he is already getting salary in USA on H1(by US branch of his employer).

He is paying tax on his US salary.

Question 1. Does he need to pay tax in USA on his India salary?
Question 2. Is there any other tax implication of the above salary structure?


Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.
If your friend is not a resident alien of the US then only his US sourced income (the wages earned in the US) are taxable to him. If he has been in the US long enough to satisfy the physical presence test for residency then all his income is taxable in the US.
The problem with the situation is that the IRS may see the payments as a way to evade US taxation. If he is being paid any of the amount deposited in India due to the work in the US then it is all reportable on the US return even if he is not a resident alien yet.

Robin D. :

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He is staying in USA on a visa called H1B. I am not sure if he is resident alien.

Robin D. :

That would depend on how long he has been here in the US. If more then 183 days then he is a resident.
When did he first get here?

Customer: replied 3 years ago.

he entered first here in April 2010

Thanks, XXXXX XXXXX is a resident alien. All his income (worldwide) is reportable to the US.
Even if paid in India it is taxable in the US based on his residency. If he pays any tax in India then he can claim the Foreign Tax Credit on the US return.
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