Tax information for nonresident winter workers in the US
Are you going to the US to work for the winter season?
If so, it’s likely that you have many questions on the types of winter work jobs available, the Winter Work and Travel program, H-2B visas, tax residency status, claiming your tax back afterwards, and more!
In this article, we will delve deeper into the above topics to answer frequently asked questions.
Types of winter work jobs in the US
There are various jobs available in the US during the winter season.
With many great ski resorts, there are endless opportunities for people who would like to work a ski season in the US. Some ski resort jobs for foreign nationals include lift operators, instructors, maintenance staff, ticket sellers, food and beverage staff, and more!
Aside from ski season workers, some commonly filled positions are in the hospitality, retail, childcare and construction industries.
Winter J-1 Work and Travel visa vs H-2B visa
The Winter Work and Travel program provides foreign students with the opportunity to work in the US during their college break.
To be eligible, you must be enrolled in a university undertaking a full-time course and from one of the following countries:
- Australia
- New Zealand
- Canada
- Peru
- Argentina
- Brazil
- Chile
- Costa Rica
- Ecuador
It is one of the best ways to experience the US as you get the opportunity to work and travel there.
H-2B visa
This is a sponsored exchange visa that allows eligible employers to employ nonresidents for temporary (non-agricultural) jobs in the US.
You must be a citizen of an eligible country to take part in the H-2B program.
To apply for an H-2B visa you must have a job offer for temporary work from a ‘sponsoring agency’ (employer) and they must show that there is a shortage of US workers to meet their requirements.
Many people go to the US on an H-2B visa to undertake winter work as there are job opportunities for both skilled and unskilled workers in various roles.
What is the difference between the winter J-1 Work and Travel visa and the H-2B visa?
The primary difference between these two visas is the J-1 Work and Travel visa is available to foreign national students enrolled in a university outside of the US to take part in the cultural exchange program during their college breaks. Whereas for the H-2B visa you do not have to be enrolled in a university course to be eligible for the visa.
The J-1 Work and Travel visa has a shorter duration, generally up to a maximum of four months. With the H-2B visa, it is initially granted for one year, with opportunities to extend the visa up to a maximum of three years.
Another difference is that there is a cap in place by the US government on the number of H-2B visas available. The current cap for the H-2B visa is 66,000 per year.
As a temporary worker, do I pay taxes in the US?
Yes, whether you are in the US on a Winter Work and Travel program visa or a H-2B visa you will be subject to federal tax on your income earned in the US.
Depending on what state you live in, you may also have to pay state taxes.
As a nonresident alien on a J-1 visa, you will not be subject to FICA tax. However, H-2B visa holders would be subject to FICA tax. This is a federal payroll tax that funds Social Security and Medicare in the US.
Read also: H-2B workers and taxes – all you need to know.
Federal income tax rates for nonresident employees
Nonresidents are subject to the same tax rates as residents of the US.
Nonresident aliens will be taxed on wages at graduated rates from 10% to 37%.
| Tax rate | Taxable income bracket |
|---|---|
| 10% | Up to $11,000 |
| 12% | $11,001 to $44,725 |
| 22% | $44,726 to $95,375 |
| 24% | $95,376 to $182,100 |
| 32% | $182,101 to $231,250 |
| 35% | $231,251 to $578,125 |
| 37% | $578,126 or more |
If an employee fails to provide the required paperwork or SSN, then the employer has the right to withhold up to 30% of their wages until the paperwork is provided. Therefore, it is important to get pre-employment tax forms to employers as soon as possible.
Claim your J-1 tax refund and your tax refund from your time spent on a H-2B visa with Sprintax .
Determining tax residency status
It is important to determine your tax residency status to ensure you are filing a correct tax return and therefore remaining compliant with the IRS.
Generally, those who are in the US on a J-1 Work and Travel visa or a H-2B visa will be deemed nonresidents for tax purposes, unless you meet the Substantial Presence Test.
Nonresidents of the US only pay tax on their income earned in the US, whereas residents of the US must pay tax on their worldwide income.
If you are unsure, you can complete the Substantial Presence Test which is used to identify the tax residency of a foreign individual in the US.
To be deemed a resident for tax purposes you must have been present in the US at least:
- 31 days during of the current year
- 183 days during the 3-year period including the current year and the two years immediately prior to that. This also includes:
- All the days you were present in the current year
- 1/3 of the days you were present in the first year before the current year
- 1/6 of the days you were present in the second year before the current year
Determine your tax residency status for free with Sprintax.
Tax treaty eligibility
The US has income tax treaties with 67 foreign countries which reduce or exempt certain income from tax withholding.
It is worth checking if you are eligible to claim the tax treaty benefits to avoid paying extra tax.
Are you starting a new job in the US? Get taxed correctly from the start with Sprintax Forms.
Pre-employment tax forms
Before beginning your employment in the US it is important to complete pre-employment tax forms to ensure that you are taxed correctly from the start.
The forms you may need to complete are Form W-4, Form 8233 and Form W-8BEN.
Form W-4: This tax form is used to help employers get an understanding of your tax profile, therefore helping them to deduct the correct amount of taxes from your pay from the beginning of your employment.
Form 8233: This is used by a nonresident alien to claim a tax treaty benefit to avoid any extra withholding of tax.
Form W-8BEN: This tax form ensures nonresident aliens avoid paying double taxation on their earnings. Upon completion of this form you will send it to your employer who will determine if the treaty applies to you. If you are eligible, your employer will not withhold tax from your pay which is covered by the tax treaty.
What is the difference between Form 8233 and Form W-8BEN?
It depends on your type of income whether you must file Form 8233 or Form W-8BEN. Generally, Form 8233 should be completed for ‘personal services income’ which is income that is connected with a US trade or business and Form W-8BEN should be completed for income that is not classed as personal services income.
Prepare your pre-employment forms with Sprintax to avoid paying more tax than you need to.
Filing a tax return – Form 1040NR
As a nonresident alien, if you earn income in the US you must file a tax return.
To do so you must file Form 1040-NR with the IRS.
On this form you will need to include personal details such as your name, address, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), you must also declare any income sourced in the US.
It is important to file a correct tax return and to do so by the tax deadline on 15 April to avoid any fines or penalties from the IRS.
Claim your Work and Travel US tax refund or your tax refund from your H-2B visa with Sprintax.
Do you need help filing your tax return?
We understand that the responsibility of filing tax returns can be daunting, especially if you are not familiar with the US tax system.
At Sprintax we can help!
By using our e-filing solution you can be guaranteed that you have filed a correct tax return – ensuring you remain compliant with the IRS and don’t jeopardize any future visas for the US.
And the advantage of filing with Sprintax is that you can file online.
Simply create your Sprintax Returns account to get started!
