# US citizen tax obligations / remote work based in NYC



## Avilove (Nov 30, 2020)

Hello everyone,

I'm hoping to meet another US citizen, ideally from NYC, who lives in Spain and is working remote for a NYC-based company.

I've started researching tax obligations. I am considering a move to Spain under a residential visa and keeping my NYC job. I am still obligated to pay federal and NY state taxes, but it's unclear if I need to continue to pay local (city) tax.

After six months residency in Spain, I will become a tax resident of Spain. There is a tax treaty in place, which prevents double taxation, but there is always nuance to these things.

Thank you in advance for any advice or information you may have, including recommendations for a good tax consultant (I tried HR, and they are ok).


----------



## AlexNYC (Aug 2, 2017)

Make sure you understand no double taxation. It doesn't mean that you only pay taxes in one place. It means that Spain will deduct the tax you pay in the US and will make you pay for the reminder in Spain.

If you don't have any income in Spain, I would rather pay the NYC tax. The minute that you get income from a Spanish source you need to declare your US income here.

That's how they explained it to me. Where in Spain are you?

Hope to hear from you,

Alex


----------



## Bevdeforges (Nov 16, 2007)

Alex, I'm afraid it has been explained to you wrong.

Generally speaking, you are considered to be working in whatever country you are physically located in when you do the work. So the OP is working in Spain, no matter where the employer is located. You don't get to choose which taxes you pay - if you are tax resident in Spain, then Spain gets first dibs on taxing your income. For exactly how that works, you need to refer to the US-Spain tax treaty but it's only the US that seems to use a direct tax credit for foreign taxes paid. Within Europe, each country has its own method of compensating for taxes that must be paid to the "other" government.

As far as the OP is concerned, you don't need to wait for that 6 month period to be subject to Spanish taxes on your employment income. Once you have 12 consecutive months outside the US (whether in Spain or elsewhere) you become eligible for the Foreign Earned Income Exclusion (form 2555) that allows you to exclude your earned income (i.e. salary and similar) from US taxation (though you still have to declare it and then formally exclude the income on your tax return).

You can, if you prefer, forego the FEIE and credit Spanish income taxes paid against your US income tax bill (using form 1116) though it can be a tricky process if you have income from multiple sources.


----------



## CltFlyboy (Feb 11, 2020)

Bev - in your experience, are the taxes in Spain enough to completely offset the ones we'd normally pay in the US? I know everyone's situation is different, I'm just trying to get a feel for real world examples so that we're better prepared for when we move in the next 3-4 years. I'm hoping to do something similar, move to the Tarragona area and work for my employer out of their Madrid office (we have a global presence).

Thank you for sharing your wisdom!

--Henry


----------



## Avilove (Nov 30, 2020)

AlexNYC said:


> Make sure you understand no double taxation. It doesn't mean that you only pay taxes in one place. It means that Spain will deduct the tax you pay in the US and will make you pay for the reminder in Spain.
> 
> If you don't have any income in Spain, I would rather pay the NYC tax. The minute that you get income from a Spanish source you need to declare your US income here.
> 
> ...


Thanks, Alex. To clarify, if I don’t have a Spanish source of income, I do not need to claim my US wages?


----------



## MataMata (Nov 30, 2008)

Your biggest problem I would say will be in getting a visa to come to Spain at all.

If you were to apply for a Non Lucrative Visa (NLV) then you will have to demonstrate a secure or guaranteed income of around €31,000 pa (€38,000 for a couple) for each of the five years it takes for your residency to become permanent but under the terms of that you wouldn't be able to work. A salary from employment is not regarded as secure or guaranteed.

As Bev says work is where you perform it not for whom or by what means, the almost certain penalty for flouting that would a cancelling of your visa and subsequent expulsion from not just Spain but likely the entire Schengen area, the EU for all intents and purposes, and quite possibly a large fine to go with it..

To apply for a working visa you would either need to be proposing to set up a business - and have a plan and the resources to follow it through - or be sponsored by a Spanish employer who would apply for the necessary visa on your behalf.

In neither case I don't think six months would apply because coming with a visa means you will effectively be tax resident from the day you arrive.


----------



## yurykek (12 mo ago)

Avilove said:


> Hello everyone,
> 
> I'm hoping to meet another US citizen, ideally from NYC, who lives in Spain and is working remote for a NYC-based company.
> 
> ...


Did you find any information about this? It looks like different people give different advice.


----------



## Joey Testa (Jan 5, 2021)

How long do you plan on living in Spain for?


----------

