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H-2A workers and Income Taxes

Authored By: Northwest Justice Project - CLEAR Intake Line LSC Funded
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This is very general information provided as community education. Your actual tax liability will depend on your individual circumstances. If you have questions about how the tax laws specifically apply to you, please consult your qualified tax preparer. Publication #8160EN

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*This is general info. Your tax liability will depend on your situation. If you have questions, talk with a qualified tax preparer.

Do I have to fill out a federal income tax return in the U.S.?

Yes, if you earned above the income limit in 2016.

What is the income limit?

It depends on whether you are a “resident of the U.S.” under tax laws. (We explain more below.)  This also determines what form you must use to file your taxes.

If you qualify as a U.S. resident for 2016, you must fill out an income tax return for 2016 if you earned more than:

  • $10,350, if you are single

  • $ 20,700, if you are married filing jointly

  • $4,050 if you are married, filing separately

  • $16,650 if you are a qualifying widow or widower

  • $ 13,350, if you are head of household

(Income limits are a little higher for those aged 65 and over.)

If you qualify as a non-resident for 2016, you must fill out an income tax return if you earned more than $4,050 in 2016.

Do I qualify as a U.S. resident?

Add together your number of days present in the U.S. for the past three years.

# of days you were in the U.S. last year (2016):   _________
# of days you were in the U.S. in 2015 (divided by 3):   _________
# of days you were in the U.S. in 2014 (divided by 6):   _________
TOTAL:   __________

If the total is at least 183 days, including at least 31 days in 2016: you may be a resident for the year 2016. Fill out the 1040 form to file your taxes.

If the total days add up to less than 183: you must file your taxes as a non-resident. Fill out the 1040NR form.

*The first tax year that you qualify as a resident of the U.S., you may have to file a “dual return.” Ask your tax preparer about this.

*If you do not qualify as a U.S. resident for the tax year (last year), but you do qualify in the current year, you may choose to be treated as a U.S. resident for the tax year. This is the “First Year Choice.”  Include a statement of first year choice.

Can I claim my family in Mexico as my dependents to lower my taxes?

The rules for this can be very complicated. It depends on your circumstances.

Generally, you may claim as dependents close relatives related by blood or marriage. These include your

  • children

  • brothers and sisters

  • aunts and uncles

  • nephews and nieces

  • parents

  • grandparents

Also:

  • They must have lived with you for more than six months last year.

  • You provided more than half the financial support for that relative.

  • The relative’s yearly income must be less than $4,050.

  • They must live in the U.S., Canada, or Mexico.

  • You must be able to show a SSN or ITIN for the relative. (If the relative does not have an ITIN, you can apply for one by filling out a W-7 for the IRS.)

Can I claim the child tax credit for my children?

Only if one of these is true:

  • The child lived here with you in the U.S. for at least half the year.

  • The child is a U.S. citizen who lived in your home for more than six months during the year. This can be your home in the U.S. or in Mexico, if you are legally married and filing a joint tax return.

*If you claim this credit or dependents that you should not, you may have to pay a penalty of 20% of the value of the credit, plus the amount wrongfully claimed, plus interest.

Can I get the Earned Income Credit (EIC)?

Maybe, if you have lived in the U.S. for at least six months of the tax year. There are also income limits and other requirements. Talk to your tax preparer.

I made a mistake on the tax return that I already filed. What should I do?

You can file an amended return. We call this a 1040X.This will fix the return.

If you do not do this, and you have claimed credits or deductions you do not have the right to, you may have to pay a penalty of 20% of the value of the credit, as well as the amount wrongfully claimed plus interest.

What if I get a letter from the IRS?

Do not ignore it. Contact them.

*When you prepare your taxes, you must provide an address where you will be sure you will get any correspondence from the IRS.

How can I communicate with the Internal Revenue Service?

You can call them at 1-800-829-1040.

Do I have to pay Social Security and Medicare taxes?

No. H2A workers do not pay these.

You may get a letter from the IRS asking for payment of Social Security taxes anyway. You should respond by explaining that you are exempt under IRC §3121 (b) (1).

What should I look for in a tax preparer?

A good tax preparer always signs and includes their preparer identification number on the taxes they prepare. It is against IRS rules for them to leave out their signature or number.

Reputable tax preparers will not:

  • Ask you to sign blank tax forms.

  • Promise large returns before completing your taxes.

  • Advise you to add or “borrow” dependents you should not claim.

  • Direct deposit your return to their own account.

*Never allow the IRS to direct-deposit your return into your preparer’s account.

No matter who prepared your tax return, only you are legally responsible for all the info that appears in it.

This is very general info provided as community education. Your tax liability will depend on your situation. If you have questions about how the tax laws specifically apply to you, talk with your qualified tax preparer. Any tax advice provided is not to be used, and cannot be used by any taxpayer, to avoid IRS penalties.

 

8160EN

This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice.
This information is current as of September 2017.

© 2017 Northwest Justice Project — 1-888-201-1014.

(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial purposes only.)

Last Review and Update: Sep 13, 2017
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