# UK Expat in US



## nala19000 (Oct 29, 2014)

Hi,

Hopefully this is a simple question, and undoubtedly been asked before (I apologize for not finding the answer on another thread).

I'm a UK expat living in the US (New York) working for a UK company. I've been here for about six months.

I'm still paid in the UK via PAYE on a UK contract. From what I've read now that I've been here for 6 months I'm USA tax liable. I'm thinking of staying in the US for another year or so maybe a bit longer.

What the best course of action here from a TAX PoV? Is it best to transfer over to a US contract and onto US payroll and start paying taxes in the US. Or is it is possible to stay paying tax in the UK instead of the US?


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## BBCWatcher (Dec 28, 2012)

nala19000 said:


> From what I've read now that I've been here for 6 months I'm USA tax liable.


I think you became U.S. tax liable when you moved to the United States. You became New York tax liable when you earned income from work in New York, even if you were on an ESTA/visa waiver visit. (New York is rather strict that way, although a lot of people aren't aware of that.)

The 183 days standard is just a rule of thumb that really doesn't apply in every (or even in many) international tax situations. It's more like a "_certainly_ you ought to pay attention" standard rather than a _minimum_ threshold.



> I'm thinking of staying in the US for another year or so maybe a bit longer. What the best course of action here from a TAX PoV? Is it best to transfer over to a US contract and onto US payroll and start paying taxes in the US. Or is it is possible to stay paying tax in the UK instead of the US?


No, you definitely have to pay U.S. and New York State income tax, from day one. (And that'd be a foreign tax credit back in the U.K. for you, so you'd get some size refund in the U.K.) You'd also pay municipal income tax if you live in, for example, New York City.

The bigger question is whether you should switch to U.S. payroll in order to participate in U.S. Social Security and stop participating in the U.K. system. I'd vote yes assuming you can clock non-trivial earnings within any two calendar years. If you can make the switch before 2014 ends and get at least $4800 in earned income (in December at least), then that'd work.

The reason is that if you can clock 2 years in the U.S. system you'll become eligible for future U.S. Social Security retirement benefits. The reason for that is that the U.S. and the U.K. have a social security treaty, and because of that treaty the U.S. can count your U.K. contributions toward qualifying in the U.S. They can count up to 8 years out of the minimum 10 required to qualify in the U.S., so there you go. The monthly benefit amount likely wouldn't be huge, but "vesting" in another system is usually a very good deal, actuarially speaking. So I'd vote for that.

If you can't quite turn 2014 into a U.S. qualifying year that may still be OK if you can work long enough into 2016 to hit at least ~$5000 in 2016 (plus 2015's earnings). That works, too. Any two calendar years, even partial ones, as long as you hit ~$5000+ in both of those years -- that gets you over the line. But if you can get 2014 "in the bank" now, I'd do it.


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## Bevdeforges (Nov 16, 2007)

Quite aside from the matter of US social security, the point is that you don't get to choose where you pay taxes. If you have the option of shifting onto your employer's US payroll, that would be the simplest way to go (certainly from your point of view).

You should, however, remember to "check out" of the UK system officially - i.e. notify the UK tax authority of your non-resident status - ASAP so as to avoid being double taxed. (The UK requires formal notice when you change status, so I'm not if there is a process for getting back whatever you've paid into PAYE up to now, or if there is, how that works.)

And yes, for the US, there are state and local taxes to consider as well.
Cheers,
Bev


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## ForeignBody (Oct 20, 2011)

Bevdeforges said:


> Quite aside from the matter of US social security, the point is that you don't get to choose where you pay taxes. If you have the option of shifting onto your employer's US payroll, that would be the simplest way to go (certainly from your point of view).
> 
> You should, however, remember to "check out" of the UK system officially - i.e. notify the UK tax authority of your non-resident status - ASAP so as to avoid being double taxed. (The UK requires formal notice when you change status, so I'm not if there is a process for getting back whatever you've paid into PAYE up to now, or if there is, how that works.)
> 
> ...


Use Form P85 to notify the UK HMRC of your move.


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## nikkisizer (Aug 20, 2011)

Hi nala19000,

You should submit form P85 only if you have not completed or are required to complete a Self Assessment Tax Return for the tax year that you leave.

You can also opt to pay voluntary national insurance contributions when you leave the UK PAYE scheme so that your contributions are kept up to date during your absence from the UK for your future entitlement to the UK state pension or UK state benefits etc.

Check out this website which you may find of use:

http://www.pensionsadvisoryservice..../the-state-pension/voluntary-ni-contributions


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