Category Archives: US Life

Advice for foreigners who are living and who want to live in the US to navigate daily US life

Laid Off on an E3 or H1B Visa

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Unfortunately it is the story of the day, the month and hey the year. We just find out today that a record almost 600,000 jobs were lost in the US in January alone. The current unemployment rate is now 7.6%. Many of those included foreigners on US working visas and the road is mcuh tougher for all of us in this category. 🙁

The two major problems that foreigners on working visas face compared to a fellow US citizen or resident who may have been laid off is;

  1. No access to Social Security Benefits or any sort of unemployment support or safety net
  2. Extremely Limited to time to find new employment and change visa legally without having to leave the US

Essentially this means if you are in this unfortunate predicament you have to bear all the costs from any savings you have of your regular expenses and finding a new position while trying to do it in record time and fit in with the regulations.

In actuality as you only are allowed to be out of employment legally for 10 days, you really don’t have any time to find a new position and transfer your position if, as most lay-offs are, sudden and unexpected.

Now many employers are very understanding in these situations given in an ideal world they never wanted to let you go having gone through so much for sponsorship to get you in the first place, that officially they will keep your position open even if you are not in it, allowing you time to find a new role and thus technically not be out of work for more than 10 days. They don’t have to do this but many do so request this if you can to buy you time.

There is no advice I really have in terms of finding a position than what you already did to get your initial role. If you were smart and dedicated enough to find a position in the US to begin with, I have no doubt, given the time and financial ability, you will find a position again even in this economy. There are positions out there…you only have to look at major job sites.

Hey even despite the gloomy numbers of January employment loss in the US, the health industry recorded an increase in positions so choose your target area wisely.

As for the situation of financially supporting yourself through this ordeal, paying your rent, etc. Well this is a decision you will have to make as it really depends how much you have, who you have to support and what your and the size of your obligations are. Like Americans it is probably a good time to live below your means for a while, save a little more. Your other problem is the US Dollar is getting stronger meaning transferring money over here from abroad buys you less.

I am sorry unlike other posts I didn’t have more advice for you but I wanted to at least address the current situation so you know the basic facts of what you can and can’t do and the basic tip about the employer holding your role open while you search.

I feel for you if you are in this situation and wish you well and a speedy find to continue your adventure…..

CJ

EDIT: There is one other option I recently was made aware of if you want to remain in North America but not specifically the US. The Alberta Immigrant Nominee Program for Canada is seeming to take more and more people in who had been laid off on a H1B or E3 visa. You don’t need a job offer or sponsor to get this visa as you can loof for work after entering if you are in this broad range of job categories. I am certainly no expert on it but hear it could be a good option and a fast track to permanent residency in Canada.

US Working Visa Holders & Doing Your Taxes

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OK firstly I have to say I am not an accountant or any form of tax advisor so don’t hold anything I say to be 100% gospel…yu know all that disclaimer stuff about seeking your own advice and be sure when you do anything and blah blah blah 🙂

Ok that said, the US tax year as far as personal income tax is concerned is the Calendar Year (so Jan 1 – Dec 31)

This differs from many countries which have the July-June or April to April year and it is important to note not all US corporations us the above as thier tax year but as you filing your taxes that is what you need to do.

For J1:
So this is the visa where you have most likely been working on a Work and Travel Program, Internship, Au Pair or programs like Camp USA. As far as tax treatment goes, you get it pretty easy in that only Federal, State (if applicable) and Local (if applicable) taxes apply.
You DO NOT have to pay either Social Security or Medicare taxes which is a great saving and given that neither you nor people on H1B, E3, L1, etc. have access to Social Security or Medicare it seems fair that you don’t have to pay it.

For H1B, E3, L1:
So this being the regular working visa group with slightly different entry criteria and benefits. Here you are obliged to pay all of Federal, State (if applicable), Local (if applicable), Social Security and Medicare. So it is important to look at the tax rates of your State and possibly city and factor in the other taxes beyond your federal tax bracket.

Check out http://en.wikipedia.org/wiki/State_income_tax for the different tax rates of states

General Info

Now the reason why I said if applicable for state and city is that a few states like Texas, Florida and a couple of smaller populus states like New Hampshire, Alaska do not have state income tax which is a great saving to you.

For cities, well New York CIty charges you the privilige for living there but am not aware of any other city in the US that charges a city income tax.

Now the question comes up, what if I reside in one city but work in another, what is my tax rate then? am I taxed twice? do I get a credit?

The answer is, it depends on which 2 states you are talking about, whether there is another party involved like a spouse who may live in your same state but work in the same state or a third state and what the relative difference is in tax rates between the states in question. IN SHORT IT IS CRAZY!

For example in normal circumstances a common occurence is the case of living in the state of New Jersey but working in New York. More often than not you will ultimately only pay NY taxes as the NJ government recognizes your taxes paid in NY and the rate in NY is higher than NJ. However that does not work as easily in reverse and with other states it depends on the treaties regarding tax they have with each other.
Your employer should be withholding tax correctly during the year as you are beign paid but ensure you are getting your full credit/refund or paying taxes owed if this is your circumstance and consult with experts if necessary.

Generally you will have until mid April to file your taxes and you should receive your W2 form from your employer sometime in January for the previous year. Go to the IRS website to find people to do your taxes through for both Federal and State.

Stupidly it is not free for most people  as you will invairably go through a 3rd party online portal like HR Block, Turbo Tax, Tax Slayer, etc but these are very straightforward and easy to use for most circumstances. Forget using an accountant unless you are really clueless (which I doubt given you got to the US to begin with) or you have a complex situation. Generally the online portals cost about $10-$30 to do both returns which isn’t too bad.

Most J1 visa holders should quality for free filing as you are probably young enough and/or have below the companies income threshold for charging you. You will still use one of the above companies except it will be FREE.

You can get refund checks mailed overseas (and you can file taxes from overseas). It is your obligation to do it so ask your employer for your W2 form if they don’t send it. It is their legal responsibility to give it to you. Contact the IRS if they refuse. You can also get your refunds deposited into your US Bank account from both Federal and State.

With deductions it probably similar to most places where you can get exemptions for travel, health, moving costs, education, work costs, mortgage repayments, etc. so just ensure you have all the documentation.

If you lived in multiple states during the year you will most likely have to file multiple state returns.

I hope this overview helped and do your own research too. As always send through your comments and I will try and help and otherwise I hope you get a Fat Refund Check!!

CJ