Taxation of Employees of International Organizations
International Tax Attorneys Ainer & Fraker, LLP (800) 775-7612 discuss Taxation of Employees of International Organizations
If you are an employee of an international organization, you can only exempt your wages from U.S. income tax by meeting the requirements of U.S. tax law (see below).
Exemption Under U.S. Tax Law
If you work for an international organization in the United States and you are not a U.S. citizen, or you are a U.S. citizen but are also a citizen of the Philippines, your salary from that organization is exempt from U.S. tax.
An international organization is an organization designated by the President of the United States through Executive Order to qualify for the privileges, exemptions, and immunities provided in the International Organizations Immunities Act.
The exemption is denied when you leave the United States (or after a reasonable time allowed for leaving the United States). The exemption is also denied when a foreign country does not allow similar exemptions to U.S. citizens. Then the Secretary of State can withdraw the privileges, exemptions, and immunities from the nationals of that foreign country.
CAUTION. The exemption under U.S. tax law applies only to current employees and not to former employees. Pensions received by former employees living in this country do not qualify for exemption.
Aliens Who Keep Immigrant Status
If you file the waiver provided by section 247(b) of the Immigration and Nationality Act (Immigration Form I-508) to keep your immigrant status, you no longer qualify for the exemption from U.S. tax under U.S. tax law from the date of filing the waiver with the Attorney General.
However, you do not lose the exemption if you file the waiver and meet either of the following conditions:
- You are exempt from U.S. tax by an income tax treaty, consular agreement, or international agreement between the United States and your country, or
- You work for an international organization if the international agreement creating the international organization provides that alien employees are exempt from U.S. income tax. Two international organizations that have such a provision are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank).
U.S. citizens and resident aliens employed by a foreign government or international organization should refer to How to Report Wage Income Paid by Foreign Governments or International Organizations for Work Performed in the United States for instructions on how to file their U.S. federal individual income tax returns:
- Persons Employed by a Foreign Government or International Organization — FIT
- Persons Employed by a Foreign Government or International Organization — FICA
- Persons Employed by a Foreign Government or International Organization — FUTA