US Citizen working for foreign government in US - No EIN

Forum|Forum|4 years ago
March 2, 2022
2 replies
9 views

Hi, I am a US citizen working for a foreign government in the US. There is not tax treaty and I do need to pay income taxes and SS/Medicare. I entered my information, ticked the box for foreign government, sent the tax return off, and was rejected because there is no EIN. What do I do now?

HelenC12

Level 15

Generally, compensation for personal services performed for a foreign government at a foreign embassy or foreign consular office, or a miscellaneous foreign government office, or for an international organization in the United States is U.S. source, not foreign source income under the Internal Revenue Code.

Are you an employee or are you self-employed? Since you don't get a W-2 and your "employer" doesn't withhold Social Security and Medicare taxes, you may be self-employed. Do you have an employment contract? If so, does it say you're an independent contractor?

To enter self-employed income, you'll have to create a business return. This is what the IRS requires. TurboTax will automatically calculate Self-employment tax (Social Security and Medicare). To enter your income, see Where do I enter Schedule C?

If you're considered an employee, complete a substitute W-2. Note: You won't be able to E-file. You'll have to file a paper return. Please see How do I file a substitute W-2 using Form 4852?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

Anonymous

Per the IRS:

If you are a U.S. citizen working in the United States for a foreign government or international organization, you must report this compensation as wages on Form 1040 and pay self-employment tax on the compensation under the Self-Employment Contributions Act (SECA). Self-employment tax is computed on Schedule SE, Self-Employment Tax, and is also reported on Form 1040. Although you are subject to self-employment tax on this employee compensation, you are not "self-employed" for any other federal tax purposes. You may not claim deductions for expenses on Schedule C and are not qualified to establish a Simplified Employee Pension (SEP) Plan and there is no allowable deduction for contributions to any such plan. Rules of contributing to SEP/IRA plans are explained in IRS Publication 560, Retirement Plans for Small Business, and Revenue Ruling 73-384 for additional information.