Are you an H-2B visa worker trying to understand the U.S. tax system?
You’re not alone! Many H-2B workers are confused about H-2B visa tax withholding and if it affects their pay.
Figuring out your tax responsibilities can be confusing, but it’s important to stay compliant and make the most of your earnings.
At Sprintax, we know that US tax can be daunting for any nonresident. So in this guide, we will outline everything you need to know about taxes as an H-2B worker, including what you need to file and possible deductions you can take.
What is the H-2B visa?
The H2B program allows employers in the US, who meet regulatory requirements, to bring nonresidents to the US to fill temporary (non-agricultural) jobs – for example, hotel staff, janitors, amusement park workers, landscapers, etc.
If you are planning to travel to the US on an H2B visa, there are a couple of things you need to know about tax.
H2B visa seasonal workers must pay U.S. taxes
The income you earn as an H-2B seasonal worker is subject to U.S. federal income tax.
Additionally, depending on the state that you lived in, you may have to file state taxes. At present, there are nine states that do not impose income taxes on H-2B workers. These states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (New Hampshire does not tax wages but does tax dividends and interest).
Can H2B visa workers avail of a tax treaty?
The US has pre-arranged tax treaties with more than 65 countries across the globe.
These agreements allow nonresidents to be either partially or completely exempt from tax in the US.
They are also in place to minimize the scope for double taxation.
If you are in the US on a H2B visa and are deemed a nonresident, and your home country has a tax treaty with the US, you can still avail of the benefits.
Learn more how to determine your residency status here.
Do H2B visa workers need to file any tax documents/ tax returns?
If you lived in, or are currently living in the US, you must file a federal tax return for the tax year, even if you don’t live there now.
As well as this, depending on the state that you resided in, you may have state tax filing requirements.
Nine states don’t have any tax-filing requirements. These are:
- Alaska
- Florida
- Nevada
- New Hampshire (taxes only investment income, not earned income)
- South Dakota
- Tennessee (taxes only investment income, not earned income)
- Texas
- Washington
- Wyoming
What happens if H2B temporary workers don’t file a tax return?
If possible, it is always a good idea to have your tax affairs in order before the US tax deadline.
It generally falls on 15 April each year.
By not filing, you leave yourself open to penalties and fines from the IRS.
The late filing penalty (Failure to File Penalty) is generally 5% of the unpaid taxes for each month or part month that it is late.
The penalty will begin the day after the tax filing due date, and will not exceed 25% of your unpaid taxes.
However, by filing more than 60 days after the due date or extended due date, the minimum penalty is strong – $485 (after 31 Dec 2023) or 100% of the unpaid tax, whichever is less.
It can also directly affect how successful your future visa and Green Card applications will be.
How to file your tax return when on a H2B visa
When filing your tax return, the first thing you should always do is determine your residency status for tax purposes, to ensure you file the correct tax return.
As you are on a H2B visa, it is more than likely you will be deemed a nonresident.
To prepare your US tax return you’ll need the following documents:
- Passport
- U.S. entry and exit dates for current and all previous visits
- All tax forms you’ve received (including Forms W-2, 1042-S and/or 1099, etc.)
- Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
You can always file your tax return by yourself.
But the easiest way to prepare your US nonresident tax return is with Sprintax!
Sprintax is the only online Federal and State self-prep tax software that is available for nonresidents in the US.
Our system will not only assist you in preparing a fully compliant Federal and State tax return, but we also maximize your legal tax refund!
The average refund at a federal level in the US is $1,126!
Get started with your H2B visa tax return here
What happens if an H2B worker files as a resident when they should have filed as a nonresident?
This is definitely one of the most common tax errors that nonresidents make when filing.
In fact, every year, thousands of nonresident aliens mistakenly file as residents on their tax documents.
Basically, a resident should file a Form 1040, and a nonresident should file with a Form 1040NR.
However, many nonresidents accidentally file Form 1040.
What happens if a H2B worker files a Form 1040 instead of a 1040NR?
This can lead to complications when applying for a future US visa or for a Green Card.
The way to fix this is by filing an amended tax return. Ignoring this mistake can lead to problems with the IRS, which could land you with fines and penalties.
Amend your tax return with Sprintax
I’ve still got tax questions!
No worries!
Sprintax can help you with any of your tax-filing queries!
Check out our FAQ page where you will find a lot of useful information.
Alternatively, you could always create an account with Sprintax, and you can contact our live chat team today!
5 ways Sprintax can help you!
- Save you time and stress!
- Determine your residency status
- Prepare your fully compliant US tax return
- E-file your Federal tax return
- Maximize your State tax refund
