# expat US citizen (still holding a permanent us address) working remote job for us based company..advice needed!



## guitar115

Hi All,

Hope someone can help with this..

My wife is a us citizen, we have been living here together in Ireland for the past year. 


She works a remote job for a us based company
She still has a permanent us based address (her parents house where she was living)
Having chatted with her company last year, they said as long as she still had a permanent us address and filed her taxes in the usa she could continue to work the job
We are currently getting her registered for tax here as she'll be liable for tax in october as her remote job counts as foreign income and she has been resident here for longer than 183 days (since january of last year)

The question comes down to her US tax filing coming up this April..

Is it ok for her to still file her us taxes to the IRS from her permanent us address? Or does being a resident of another country now mean that she shouldn't be working the remote job and filing taxes from a permanent us address? 

The whole company thing is a bit of a grey area: all of the workforce are remote so before covid there could have been many employees travelling around the world, still filing taxes from a us based address. I know that being resident in another country is different to travelling though.

Thanks for any advice


----------



## 255

guitar115 -- I read about a court case, probably over 30 years ago, where the IRS denied the Foreign Earned Income Exclusion (FEIE,) because the return was filed from a U.S. address. The taxpayer sufficiently "proved" their foreign residency in "Tax Court" and the IRS lost the case. Bottom line, the court said that using a U.S. address, for convenience was OK.

With that said, my wife had a minimal amount of income, one year, while living overseas and she was denied the FEIE (we used a US address to file.) Even though I knew the IRS was wrong -- I paid the extra tax (it was under $100,) because to argue my case would have taken more time and effort than it was worth (this was about 20 years ago.)

Legally, I think you'd be fine using a U.S. address, but why tempt fate. As you have said, you know you have to file your taxes in Ireland, anyway -- so just use your Irish address. Your wife's company is not privy to your tax return, so I see no issue there. She could still utilize the U.S address, for her company and the Irish address for the IRS. There are certainly many Americans working remotely overseas -- so no issue there.

The main issue I think you may still need to sort are social charges (social security, medical, and whatever else Ireland requires.) International Programs - Totalization Agreement with Ireland (ssa.gov) If her company balks, it may be convenient for her to work as a contractor, so she could pay her Irish social charges directly. Cheers, 255


----------



## Bevdeforges

This is kind of a classic expat problem. The fact of your wife "having" a US mailing address (which is basically all it is) is completely irrelevant to anything here - except to enable the employer to keep your wife on the US payroll. Being on the US payroll means that they don't have to do anything special for her - and can keep on deducting US taxes, Social Security, payroll taxes and benefits and state (and potentially city) income taxes from her salary. 

Leaves it up to your wife to file her US returns and try to get back her taxes (since working overseas, she is entitled to the FEIE or Foreign Tax Credit for taxes paid in Ireland). You can't get the US SS back - I know some who have tried. Though she will get credit for her Social Security entitlements, if you're staying in Ireland (or overseas in general) she'd do better to be contributing to the local (Irish) retirement and health systems. And most states are very difficult about refunding withheld taxes - which she doesn't owe since she isn't actually resident in the state.

Anyhow, the address she uses for her employer is between her and her employer. She really should be using your Irish address so that she can claim back at least the Federal withholding. But most employers will balk at admitting that they have someone working remotely from abroad because legally speaking, they should be paying "payroll taxes" in the country in which the person is living. And in most of Europe, the employer's part of payroll tax is much more than it is in the US.

If she can't work out an arrangement to work as a contractor (i.e. they pay her gross and then she pays the relevant taxes and social insurances herself) you're stuck with paying US Social Security and state taxes that she doesn't owe.


----------



## Moulard

A bunch of things, some of which have already been partly unpacked by Bev and 255, so this is mostly a concurrence with what they have said with a few added tid-bits. 

From the IRS perspective an address is really just where you want then to send correspondence. Further, there is nothing that says that the address she has on file with her employer needs to be the same as that she gives the IRS

What is more important from a tax perspective is residency / permanent place of abode. I suspect that the employer is partly confusing a "permanent address" with a permanent abode.
What the employer is most likely worried about with your address is whether having an employee in Ireland is whether or not that effectively creates a "permanent establishment" for the business.
It is this that triggers payroll taxes, business registration and related requirements.

Ireland may have different rules about when one becomes a tax resident - the 183 days may not be relevant. Generally it is just a tie breaker rule when 2 countries both claim someone is a tax resident. As an example, you can live in Australia close to indefinitely and still not be a resident for tax purposes -- one would only have to be here on a temporary resident visa. 

Given she is a US citizen the employers requirement to file US taxes is a moot point as a US citizen is required to report their global income and file a US tax return regardless. 

She can file IRS form 673 with her employer to claim an exemption from Federal Income Tax withholding given she would be eligible to use the Foreign Earned Income Exclusion (even if she actually files using Foreign Tax Credits). There should be no need to claim back federal withholding removing the cashflow issues of waiting for a refund of US taxes withheld.

She may or may not be able to do the same with State Income tax withholding. States are specifically excluded from the tax treaties, and therefore depending on the State rules where one lives out of state.

Under the totalization agreement, the arrangement she is looking at would likely allow her to contribute into US social security for up to 5 years - no need to contribute to an Irish equivalent. From a future pension perspective US contributions will count towards a future Irish public pension and vice versa. Beyond 5 years things could get complicated (time limit exemptions, certificates of cover etc), but by then she may swapped jobs, so that could be moot by then.

Contracting would remove both the permanent establishment (that could occur almost immediately - depending on Irish tax law) and social security tax issues (5 years down the track).


----------

