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Taxes

FITA 

Some people on extended furloughs have the right maintain their Foreign tax status, and continue to file form 2555, even when they are in the US more that than Reliant’s standard furlough of three months.  However, the IRS guidelines are very specific, and there are many possible scenarios to consider. Therefore, if you will be in the US longer than 3 months on your furlough we suggest discussing the specifics of your situation with a professional tax consultant. Your time in the US may reduce your FEIE benefits, however an extended stay in the US does NOT end your Foreign earned income status. 

If you have a furlough longer than 3 months and you do not have bona fide residence in your location of service, please document the following (for Reliant, and for your tax return):

1. Locations of your stays in the US (with approximate timing).
2. What you will be doing while in the US.
3. Your dates of presence in the US. 
4. Where your major household belongings will be during your extended furlough. 

In most cases, your foreign tax residence stays in your location of service in the eyes of the IRS, until you intentionally move back to the US.  If you wish to move your tax location (for payroll purposes) to a US location during your stay, please consult with your tax adviser to understand the outcomes of that choice. You may reimburse up to $350 a year for professional tax fees.

State Taxes

If you are in the US longer than 6 months, Reliant may need to report and pay taxes to the state where you are residing.  Please inform International@reliant.org of an extended stay when you reach the 5th month of presence in the US.