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Income reporting for Ukrainians arrived with U4U program and having UHP status

Forum|Forum|3 years ago
January 13, 2023
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I arrived to US via Unite for Ukraine program and received Ukrainian Humanitarian Parole in August 2022.

I applied and received SSN and Employment Authorization Document in September.

I have an income as self-employed in Ukraine (and pay taxes in Ukraine).

How should I report my income and any suggestion on who can help me to learn the process?

Thank you!

Not A Product Question

Best answer by pk12_2

@ikseek , welcome to the USA.

(a) are you here with your family or just by yourself?

(b) since you have not passed the Substantial Presence Test (183 days total counting all the days in 2022, 1/3 of days present in 2021 and 1/6 the days present in 2020 ), you can file as 1. Non-Resident Alien on form 1040-NR ( not supported by TubroTax ) but this essentially allows you to file as a single and very limited deductions -- so generally higher tax.; OR 2. as a resident for tax purposes --- this requires each member of your family / filing with you to have SSN, allows standard deduction, you file on form 1040 ( supported by TurboTax), needs paper-filing ( file by mail ) because you need to add a request note stating: (A). you were not a resident for tax purposes in 2021, (B). for the test period Aug 2022 ( when you entered the USA ) till the end of the year ( 12/31/2022 ) you have been in the USA at least 75% of the days and that you have been here at least 31 days; (C). that you will pass the Substantial Presence Test ( SPT ) in 2023 and that you wish to be treated as a resident for the tax year 2022. Note that this treatment as resident means that USA will tax your world income ( no matter the source) starting from the first full day of presence in this country.

This is only the answer to your specific questions here. You can always come back and one of us will help you through.

You may want to contact your local library for help on tax preparation / education - there are lot of groups that help seniors and others on filling out their returns and often the local library is the contact point ( TaxAid/ VITA / AARP etc. are all active in this). Just be aware US tax code is quite complicated but an individual normally needs very little of it.

Is there more I can do for you ?

pk

A

Anonymous_

Employee

Check back. I will page Champ @pk12_2 for this.

P

pk12_2Answer

Employee

@ikseek , welcome to the USA.

(a) are you here with your family or just by yourself?

(b) since you have not passed the Substantial Presence Test (183 days total counting all the days in 2022, 1/3 of days present in 2021 and 1/6 the days present in 2020 ), you can file as 1. Non-Resident Alien on form 1040-NR ( not supported by TubroTax ) but this essentially allows you to file as a single and very limited deductions -- so generally higher tax.; OR 2. as a resident for tax purposes --- this requires each member of your family / filing with you to have SSN, allows standard deduction, you file on form 1040 ( supported by TurboTax), needs paper-filing ( file by mail ) because you need to add a request note stating: (A). you were not a resident for tax purposes in 2021, (B). for the test period Aug 2022 ( when you entered the USA ) till the end of the year ( 12/31/2022 ) you have been in the USA at least 75% of the days and that you have been here at least 31 days; (C). that you will pass the Substantial Presence Test ( SPT ) in 2023 and that you wish to be treated as a resident for the tax year 2022. Note that this treatment as resident means that USA will tax your world income ( no matter the source) starting from the first full day of presence in this country.

This is only the answer to your specific questions here. You can always come back and one of us will help you through.

You may want to contact your local library for help on tax preparation / education - there are lot of groups that help seniors and others on filling out their returns and often the local library is the contact point ( TaxAid/ VITA / AARP etc. are all active in this). Just be aware US tax code is quite complicated but an individual normally needs very little of it.

Is there more I can do for you ?

pk

I

ikseekAuthor

@pk12_2 you're incredibly helpful, thank you very much!

I'm not married and my relatives are back in Ukraine, so I arrived alone, but I rent a house together with my friend's family of 6. That complicates form filling as I'm not always sure how to answer questions about "household income" (in benefits forms for example, my friends applied for benefits on their own and I applied on my own), so I usually state that I'm is my whole family.

I will try to get virtual assistance from TaxAid/ VITA / AARP you mentioned, looks like I should qualify for free help. Thank you!

S

SergiiB

Hi @pk12_2 I have a question of a similar nature. I am a Ukrainian national considering applying for a U4U scheme visa to the US. I am trying to understand the taxation rules for self-employment under such circumstance
If I come to the US under the U4U program and get paid on a 1099 basis I should file returns as self-employed, right? Can you please verify or correct my findings? As far as I understand until I meet the substantial presence criteria I will be considered a nonresident alien and as such I will not have to pay the FICA self-employment 15,3% tax. Say, I arrive in the US in November 2023 and have an average monthly income of $5000 on a 1099 basis. Until roughly somewhere in June 2024 I will be a nonresident alien. I will have to pay the standard federal and state (NJ) tax on my 1099 income as any US citizen but will be exempt from the self-employment taxes. And after June 2024 I will become a tax resident and will have to pay self-employment tax on my income earned after June 2024. Is this correct?
Also, I won't be able to claim the standard deduction until the next year after I become a tax resident, which in this example will be 2025?
Thank you for your help!

P

pk12_2

Employee

@SergiiB , just to restate your situation :

(a) Non-Resident Alien ( Ukraine citizenship ) arrives in the USA on Nov 15th. 2023 with work visa

(b) Spouse and children all enter the USA on the same day with work permit and SSN ---- Social Security Number .

This implies the following :

1. For the year 2023, the taxpayer is a Non-Resident Alien and therefore is taxed ONLY on US sourced income, must use itemized deduction.

2. The tax payer ( non-student / non-trainee ) and on receiving 1099-NEC compensation must pay Social Security and Medicare taxes to the tune of 15.3% ( called SECA -- Self-Employment version of FICA )

3. The tax payer , generally may meet the requirements of asserting request for First Year Resident --- but the residency start date is still the first full day after arrival and cannot file return till after meeting Substantial Presence Test ( 183 days present counting all the days present in 2023, 1/3 rd the days in 2022 and 1/6th the days present in 2020 ). In your particular case and assuming that this 2023 entry to USA is a first within the last three years, you would NOT meet SPT in 2023.

4. In 2024, some where in May / June ( for the example articulated ), you would be a Resident for Tax purposes and therefore for the year you would generally be dual status -- Non-Residence till SPT and Resident thereafter. Depending on how you proceed , you could be a resident for the full year and therefore be able to use the Standard Deduction ( it requires a full year of residency / presence ), be taxed on world income..

5. I n all cases though as a self-employed tax payer you are under the SECA rules i.e. 15.3% of net income taxed as contribution to Social Security and Medicare. A W-2 employee on the other hand shares the 15.3% ( on a 50-50 basis ) with the employer.

Does this answer your questions regarding this subject ? Is there more I can do for you ?

Welcome to the USA , whenever you choose to come and contribute to this country .

pk