Green card holder in China slams US tax laws on foreign income: ‘Does that make sense?'
Green card holder in China slams US tax laws on foreign income
'I'm a green card holder living in China. If I make any money in China, I still need to pay US federal and state taxes,' he wrote. 'Does that make sense?' In a follow-up post, he added, 'Most EU countries don't tax their Europeans on income made abroad.'
Chen currently lives in China but is listed as being based in San Jose, California, on his LinkedIn profile. He earned a master's degree in Electrical Engineering from Penn State University and worked at Cisco Systems for more than eight years. During the COVID-19 lockdown, he launched IndieLog (formerly Lonely Dev), a platform for independent developers.
Online reactions
His post drew a wide range of reactions. One user wrote, 'Yes because green card is a subscription based service,' while another commented, 'The price you pay to have access to America. Unfortunately it's the only country powerful enough to have such tax laws. Can you not offset some tax with FTC?'
Some users told him he could simply give up his green card. Chen responded, 'Of course! The card will be automatically cancelled if I don't return in 2 years.' When someone pointed out that staying outside the US for more than six months could affect his status, Chen replied, 'We have the re-entry permit (up to 2 years stay abroad).'
Also Read: Green card rules change for married couples: See the new immigration guidelines
Another user chimed, 'The value of a US green card is immense. It's the only country where you can succeed if you work hard and create value irrespective of your race, gender etc. Millions have been waiting decades just to get it.'
A different user wrote, 'For US citizens, it doesn't, but for green card holders it does. Green card means you're a US permanent resident, benefiting from the services US provides. Infact you can lose your green card if you spend more than six months per year abroad.'
What does the IRS say?
The IRS clearly states that both US citizens and green card holders living abroad must report and pay taxes on their worldwide income. The agency answers this directly in its general FAQs, 'Your worldwide income is subject to US income tax, regardless of where you reside.'
Even if income taxes are paid in another country, green card holders are still required to file US income tax returns. To stop this obligation, a person must give up their green card by filing Form I-407 with USCIS. Alternatively, US citizens can renounce their citizenship under specific circumstances defined in the expatriation tax rules.
Anyone holding a green card is considered a lawful permanent resident and is treated as a US tax resident.
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