What are the rules for taxing employees who work abroad?

Taxing employees who work abroad can be complicated, but in New York it follows the same basic principles as domestic taxation. The Global Income Tax Law of New York requires employers to withhold and pay Global Income Tax if their employee works in a foreign country for more than 183 days in a 12-month period. Employers must also report the employee’s worldwide income to the Internal Revenue Service (IRS) annually, just like domestic incomes. They may also be required to file additional forms relating to foreign income. The employer will also deduct foreign taxes from the employee’s salary in the country of employment, which may also be credited to the United States tax. Employees who work abroad may also be considered nonresident aliens and subject to different reporting requirements. For example, if the employee is a nonresident alien, the employer must file form 1042-S with the IRS and provide the employee with a copy at the end of the year. In general, foreign income is subject to federal tax, regardless of the number of days the employee works abroad. If an employee does not qualify for the foreign earned income exclusion or foreign tax credit, they are required to pay the full amount of taxes due. It is important for employers and employees to familiarize themselves with the Global Income Tax Law of New York and the specific tax rules for working abroad. This will help ensure accurate reporting of taxes and the avoidance of costly penalties.

Related FAQs

How do avoidance of double taxation agreements work?
How do international tax regimes differ from national tax regimes?
What are the specific methods for avoiding taxation of international profits?
How do digital services taxes work?
How do countries use tax information exchange agreements?
How is taxation of foreign services different from taxation of goods?
How does taxation of international profits work?
What are the consequences of having a Permanent Establishment (PE)?
What are the tax implications of doing business in a foreign country?
What is the OECD's Model Tax Convention?

What are the rules for taxing employees who work abroad?

Related FAQs

Related Blog Posts