Final UK Paycheck after entering on K-1

[theballaam96 49]

Hello all,

I finish work a few days before I travel over to the US but due to the payment cycle at my company I won't be paid until around 15 days after I enter the US. Since this is work that I did in the UK, I assume there would be no issue with it, but could anyone confirm/deny that? (I can discuss with company payroll if this isn't okay)

Edited April 26, 2021 by theballaam96

[Nitas_man 3,100]

No issue

[theballaam96 49]

Awesome, thanks!

[Wuozopo 4,293]

5 hours ago, theballaam96 said:

Hello all,

I finish work a few days before I travel over to the US but due to the payment cycle at my company I won't be paid until around 15 days after I enter the US. Since this is work that I did in the UK, I assume there would be no issue with it, but could anyone confirm/deny that? (I can discuss with company payroll if this isn't okay)

From reading a lot of tax publications, my understanding is that when you file your US taxes next year for 2021 tax year—

• All income earned, whether UK or US income, will be reported if a joint return with your spouse.
• Money received prior to entering the US can be excluded as Foreign Earned Income Exclusion (Form 2555)
• Money received after US entry is taxable by the US, and not the UK (per tax treaty). You are taxed by the country where you live on the date you receive the pay no matter if it was earned in another country. 
• If you were already taxed by the foreign country on that money received after US entry, you still report it as US taxable income, but can claim a foreign tax credit to avoid double taxation.

In practical reality, it is highly unlikely that the IRS is going to be checking on your POE date or knowing when that last paycheck was issued. So whether you call it as Foreign Earned Income Exclusion or seek a Foreign Tax Credit is swings and roundabouts. Putting it with the other Foreign Earned Income Exclusion will be easier, but not the actual correct procedure. 
 

 

Edited April 26, 2021 by Wuozopo

[theballaam96 49]

3 minutes ago, Wuozopo said:

From reading a lot of tax publications, my understanding is that when you file your US taxes next year for 2021 tax year—

• All income earned, whether UK or US income, will be reported if a joint return with your spouse.
• Money received prior to entering the US can be excluded as Foreign Earned Income Exclusion (Form 2555)
• Money received after US entry is taxable by the US, and not the UK (per tax treaty). You are taxed by the country where you live on the date you receive the pay no matter if it was earned in another country. 
• If you were already taxed by the foreign country on that money received after US entry, you still report it as US taxable income, but can claim a foreign tax credit to avoid double taxation.

In practical reality, it is highly unlikely that the IRS is going to be checking on your POE date or knowing when that last paycheck was issued. So whether you call it as Foreign Earned Income Exclusion or seek a Foreign Tax Credit is swings and roundabouts. 
 

 

Thank you. Would you suggest I talk to company payroll then to see whether I can expedite the pay?

[Wuozopo 4,293]

1 minute ago, theballaam96 said:

Thank you. Would you suggest I talk to company payroll then to see whether I can expedite the pay?

That would be ideal, or ask them not to apply UK taxes to it. There is some way they can code that. Some people continue their UK jobs remotely and their paychecks are coded to not have UK taxes applied because they pay tax to the US on their earnings. As I indicated, the IRS isn’t going to have access to your immigration or bank records to know the exact dates so for one paycheck it’s not worth a huge hassle. 

[theballaam96 49]

9 minutes ago, Wuozopo said:

That would be ideal, or ask them not to apply UK taxes to it. There is some way they can code that. Some people continue their UK jobs remotely and their paychecks are coded to not have UK taxes applied because they pay tax to the US on their earnings. As I indicated, the IRS isn’t going to have access to your immigration or bank records to know the exact dates so for one paycheck it’s not worth a huge hassle. 

Okay, so whatever happens with this, there is 0 chance of this causing problems in terms of immigration/Adj of Status?

[Wuozopo 4,293]

11 minutes ago, theballaam96 said:

Okay, so whatever happens with this, there is 0 chance of this causing problems in terms of immigration/Adj of Status?

None. It’s an IRS technicality. Separate parts of the government who do not talk to each other.

[Ontarkie 14,225]

~~Moved to Moving Here and Your New Life, from K1 P&P~~