close
Share with your friends

US - Special considerations for short-term assignments

US - Special considerations for short-term assignments

Taxation of international executives

1000

Related content

Residency rules
Payroll considerations
Taxable income
Additional considerations

 

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than 1 year.

Residency rules

Are there special residency considerations for short-term assignments?

No. As discussed above, determination of residency status is a function of presence rather than intent.

Payroll considerations

Are there special payroll considerations for short-term assignments?

No. US-source wages are subject to withholding regardless of the nationality of either employer or employee or the intent of the assignment.

Taxable income

What income will be taxed during short-term assignments?

Unless exempt by treaty, all US-source income is subject to US tax. In general, compensation paid for services performed in the United States is US-source income.

For an individual whose assignment is not expected to, and in fact does not, exceed 1 year in duration, and whose tax home (regular or principal place of business) remains in their home country/jurisdiction, certain travel, meals, and lodging expenses (away-from-home expenses) may be excludable from income.

Business expenses and reimbursements do not have to be reported on an assignee’s US income tax return if an assignee fully accounts to the employer for the expenses. If any reimbursement exceeds an assignee’s substantiated expenses, the employer must report the excess amount as compensation and the amount is includible in the assignee’s income.

Additional considerations

Are there any additional matters that should be considered before initiating a short- term assignment in the United States?

Before initiating a short-term assignment in the United States, it is important to remember that proper immigration procedures must be followed, such as obtaining the appropriate visa and work permits. Also, the intended length of the assignment should be adequately documented for purposes of the exclusion of certain travel, meals, and lodging expenses (mentioned above).

For further information on short-term assignments, extended business travelers, and cross- border commuters, see the KPMG International publication: Thinking Beyond Borders: Management of Extended Business Travelers.

Disclaimer

All information contained in this publication is summarized by KPMG LLP, the United States member firm affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity, based on the U.S. Internal Revenue Code and Regulations.

© 2020 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal