I came to US in Feb 2017. I received bonus for 17 in 2018. Bonus for (jan-feb) was taxed in India, (mar-dec) was tax in US. Do I've to add (jan-feb) bonus in 2018 income?

[dineschha]

The  (jan-feb 2017) part of bonus was also transferred to me in 2018 in US bank account by my employer. But my employer has deducted india income tax on that. Do I have to include (jan-feb 2017)  bonus income as US income. The (jan-feb 2017)  bonus is not including in my W2.

[pk]

@dineschha , from your post I am assuming that you are an Indian citizen, in the USA with a H-1 visa and entered USA first in Feb 2017. While in the USA are you employed  by the Indian entity or another US entity ?  The bonus attributable  to Jan-Feb 2017 and paid in 2018 -- does this show on your W-2 for 2017 or  what?  What is the bonus for ? or is this an extra payment for working in the USA ?  Why was the Mar-Dec portion of  yearly ( ?) bonus taxable in the USA -- when was it paid and by whom ?

Namaste ji

[dineschha · Accepted solution]

I came on L1B. I was employed by the same company in India earlier.

Bouns is part of the annual payment. 10% of annual salary.

"The bonus attributable  to Jan-Feb 2017 and paid in 2018 -- does this show on your W-2 for 2017"  ->No

[pk]

Since this payment ( bonus ) was for work performed in India  and  before you entered  the USA, so even though it is paid  in 2018, it would still fall outside  your W-2 reporting and hence  not taxed by the USA ------ (a) it is for work performed during a period not under US purview; (b) since it is a fixed percentage of your  monthly salary, it is really a delayed payment of salary.  Suggest your W-2 takes precedence.

IRS does  take the position that  ( for US taxpayers ) if you receive  delayed payment for earlier work, then you report the amount in the year received. Thus if your wages for the year 2017 , earned abroad, but received in 2018, be reported as taxable income in 2018.  And generally , if this income is doubly taxed, is eligible for foreign tax credit --- but in your case, I do not believe it will make you whole. Furthermore your  US employer has decided that  this is not reportable income.  Therefore I would leave it alone and use the W-2 as the basis.

Namaste ji