H1B visa: Received royalties from an academic book published by the UK-based publisher

[roalddahl14]

Hello,

I am an Indian citizen and have been working as a Research Scientist on an H1B (lottery exempt) visa at a US university since November 2023. Before this, I was on a J-1 visa (Research Scholar) at a national lab in the US starting in 2018. During my time on the J-1 visa, I authored five books in my research area. Four of these books were published by a UK-based publisher in December 2023 (although the work was completed before my H1B visa term began), and the fifth book was published by a US-based publisher in March 2024.

Recently, I received royalties via wire transfer for the four books published by the UK-based publisher. The publisher informed me that "We are required by the UK Tax Authority to deduct 20% Income Tax at source unless a double tax clearance has been approved." As a result, the royalties I received had already been taxed at 20% in the UK. I would like to know if I need to pay taxes in the US on these royalties. If so, how should I report this income to the IRS? If not, do I still need to inform IRS about these royalties?

I have not yet received royalties from the US-based publisher for my fifth book. However, when I do, what kind of tax form can I expect from the US-based publisher? Additionally, is receiving such income legal considering my current H1B visa status?

Regards,
RD

[pk]

@roalddahl14 ,  as I mentioned in your other thread ,  because you are a  Resident for Tax purposes  ( having passed substantial Presence Test  [ SPT ] ,  based on the information you have provided), you file your return on form 1040 and are taxed on WORLD INCOME.   Thus :

(a)  while the work was accomplished  before your becoming a Resident ,the payment received  anytime after passing the SPT .  So amounts received as Royalty  in 2024 is recognized  on your return for the tax year 2024, using Schedule-E  ( page -2 ). 

(b) Under the US-UK tax treaty, yes you  could assert treaty article   to reduce the double taxation bite.   

If you need help on any of this ,  please consider  writing back with exact situation/ questions.     

You can also find  the US-UK Tax Treaty text at :         U.S.-U.K. income tax treaty, signed July 24, 2001, London (treasury.gov)

Namaste ji

pk

[roalddahl14]

Thank you! This is very useful!