Filing Taxes On H1B Visa - The Ultimate Guide - Sprintax Blog

Last updated on 23 Feb 2024

Table of Contents Hide

1. About H1B visa
2. H1B Visa Income Tax Obligations
   1. Federal Income Tax on an H1B
   2. Local income tax
   3. State income tax
   4. Federal Social security and Medicare (FICA)
   5. I live in one state and work in another. How does this affect my taxes?
3. Filing taxes on H1B visa
   1. Determine your residency status with the substantial presence test
   2. Gather your tax documentation
4. How to file your taxes as an H1B visa holder
   1. Can I file jointly with my spouse?
   2. Can I claim dependents on my H1B tax return?
5. Who can help me with my H1B tax preparation?

About H1B visa

The H1B visa enables skilled workers with specialized expertise to live in the US for three years (later it can be extended for another three years), and work for a sponsoring employer.

In order to apply, you need specialized knowledge and a bachelor’s degree or equivalent work experience in areas such as medicine, science, mathematics, information technology, architecture, finance, and accounting.

You can find more about H1B visa eligibility, the application process, and visa duration here.

H1B Visa Income Tax Obligations

If you work in the US as an H1B worker, you can expect to pay between 25-35% of your wages in federal, state, and local taxes.

These taxes will include:

• Federal income tax
• Local income tax (depending on where you live)
• State income tax (depending on where you live)
• Federal Social security and Medicare tax- (FICA)

While living in the US, you may also pay property tax, sales tax, capital gains tax, transfer tax, inheritance or estate tax, hotel or lodging tax, gas tax, and more.

Federal Income Tax on an H1B

If you are a nonresident and working in the US on an H1B visa, you will be taxed on money that you make in the US, at the same rate as US citizens. You are obliged to file a US tax return (Form 1040NR), but you can not claim the same deductions as US citizens.

If you become a US resident you will have access to those deductions, but you will also be charged on your worldwide income.

What is the tax rate for H1B visa holders?

Your income level will determine the rate at which you are taxed.

The US has progressive “marginal brackets”. Most H1B visa holders pay between 20-35% of their income.

If you are married and filing separately, you will be taxed at the same rate as those in the ‘single’ bracket.

2023 Federal income tax rates (for taxes filed in 2024)

Tax rate	Single	Married, filing jointly	Head of household
10%	$0 to $11,000	$0 to $22,000	$0 to $15,700
12%	$11,001 to $44,725	$22,001 to $89,450	$15,701 to $59,850
22%	$44,726 to $95,375	$89,451 to $190,750	$59,851 to $95,350
24%	$95,376 to $182,100	$190,751 to $364,200	$95,351 to $182,100
32%	$182,101 to $231,250	$364,201 to $462,500	$182,101 to $231,250
35%	$231,251 to $578,125	$462,501 to $693,750	$231,251 to $578,100
37%	$578,126 or more	$693,751 or more	$578,101 or more

2024 Federal income tax rates (for taxes filed in 2025)

Tax rate	Single	Married, filing jointly	Head of household
10%	$0 to $11,600	$0 to $23,200	$0 to $16,550
12%	$11,601 to $47,150	$23,201 to $94,300	$16,551 to $63,100
22%	$47,151 to $100,525	$94,301 to $201,050	$63,101 to $100,500
24%	$100,526 to $191,950	$201,051 to $383,900	$100,501 to $191,950
32%	$191,951 to $243,725	$383,901 to $487,450	$191,951 to $243,700
35%	$243,726 to $609,350	$487,451 to $731,200	$243,701 to $609,350
37%	$609,351 or more	$731,201 or more	$609,351 or more

Local income tax

Some cities have a local income tax, which varies between 1-4% of your gross income.

This tax will be withheld by your employer and it’s very important that your address on your W4 is correct, otherwise, you may end up paying incorrect local tax.

During the tax season, you may need to file a local income tax return (where applicable), and Sprintax can assist you !

If you have any tax-related questions you can always get in touch with our 24/7 Live Chat support.

State income tax

How much you will pay depends entirely on the state that you work in. The tax will be withheld by your employer. This tax usually ranges from 0 to 10% of your gross income (with some exceptions).

The same applies to both citizens and non-citizens. Some states do not have a personal income tax, these are- Wyoming, Washington, Alaska, Florida, South Dakota, Texas, and Nevada. What’s more Tennessee and New Hampshire only tax interests and dividends at the state level.

From January to April (during the tax season) you will need to file a state income tax return. You can also file an extension and change the due date to October instead.

Federal Social security and Medicare (FICA)

These taxes are pension and healthcare provisions for retirement.

6.2% of your gross salary will be deducted for social security, and 1.45% for Medicare, and your employer contributes the same amount.

Depending on the tax treaty the US has with your home country, in some cases, you can receive Social Security after you leave.

Learn more about FICA tax exemption for nonresidents here.

I live in one state and work in another. How does this affect my taxes?

In such a situation, you may need to file tax returns in both states, and you will usually pay the higher of the two states’ taxes.

The good news is that Sprintax can help you with your multi-state tax returns.

If you have questions, you can always get in touch with our 24/7 Live Chat support.

Filing taxes on H1B visa

Determine your residency status with the substantial presence test

There are two types of aliens for tax purposes- resident and nonresident aliens. In order to file your taxes, you must determine your residency status with the substantial presence test and Sprintax Returns can do this for you. The test is applied on a calendar year-by-calendar year basis.

Resident aliens are taxed in the same way as US citizens on their worldwide income, while nonresident aliens are taxed only on income from US sources.

Gather your tax documentation

You will need your Social Security Card and all tax forms like W-2, forms 1099 series, investment income statement, and other income information.

If you are a resident of Canada, Mexico, South Korea, or a student or business apprentice from India, you may be entitled to claim some additional credits due to US residents only like child credits. If you want to claim any of the residents’ tax deductions you must back up your claims with receipts for child care, educational cost, and other applicable receipts.

How to file your taxes as an H1B visa holder

When you are ready with all the required documents you can proceed with filing your tax return.

If you are a temporary visitor to the US on an H1B working visa you can file your taxes directly yourself. Alternatively, if you’d like some help with all that tricky paperwork, Sprintax can prepare your income tax return for you!

You will need to file your taxes for the 2023 tax year before the 15 April 2024 deadline.

Prepare your US Nonresident Tax Return with Sprintax!

Can I file jointly with my spouse?

If you were married during the tax year, you do not have the option to file a return jointly with your spouse if you both are nonresident aliens, and married nonresident alien status is also treated as a single.

This means that your spouse has the same filing obligations that you’ll have.

Can I claim dependents on my H1B tax return?

Nonresidents are not allowed to claim dependents on their tax returns.

However, residents of Canada, Mexico, South Korea, and some business apprentices or students from India may claim child tax credits for their family members if certain conditions are met.

For additional information on tax exemptions & deductions for family members, please take a look here.

Who can help me with my H1B tax preparation?

If you are a nonresident alien on an H1B visa in the US, Sprintax can help you to e-file your federal tax return and prepare your state tax return.

Simply, create your account and in a few minutes, you will be ready to complete your tax returns!

With Sprintax you can:

• easily e-file your federal tax return and prepare your state return, because Sprintax is the only online software for nonresidents
• chat with qualified agents 24/7
• get the maximum tax refund and avail of every tax entitlement

Taxes can be fun!

File your 1040NR online with Sprintax!