Visa holders · L-1 visa
L-1 visa taxes: arrive by early July, and you are usually taxed as a US resident from your first year.
The L-1 is not an exempt visa for the substantial presence test, so your L-1 days count. At 183 days in a year, you are a resident alien, unless a treaty tie-breaker makes you a resident of your home country. Your residency then starts on your first day in the US that year, which makes your arrival year a dual-status year.
Updated · Sources
For an L-1 transfer in 2026
- July 2
- is the latest arrival date that reaches 183 US days by December 31, with no trips abroad or earlier visits.
- 7.65%
- is the employee share of Social Security and Medicare tax on L-1 wages up to $184,500, unless a certificate of coverage applies.
- 5 years
- is the usual limit on an assignment that keeps you in your home country’s Social Security system.
Are you a US resident for tax in your first L-1 year?
Any part of a day in the US counts as a full day, including the day you land.
You arrived by July 2
Each day here from your arrival to December 31 counts toward 183. Trips outside the US after you land take days off that count, so a July arrival with a holiday abroad can fall short.
You made US trips in the two years before
Earlier business trips count too, with last year’s days at a third and those from two years ago at a sixth. They can lift a later arrival past 183 days. You still need at least 31 days here this year.
You visited earlier in the same year
An earlier visit that year, such as a house-hunting trip, can pull your residency start date back to that visit. Visits of 10 days or fewer in total do not move it if your tax home and closer connection were still abroad. You claim this in a signed statement with your return. Those days still count toward your 183.
You arrived later in the year
If you count fewer than 183 days, you are a nonresident alien for the year, unless you make an election. The first-year choice starts your residency on the first day of a stay of at least 31 days in a row. From that day to December 31, you must be here on at least 75% of the days. Up to 5 days away still count as days here. You must also pass the test the next year. A spouse who is a US citizen or resident can instead elect with you to treat you as a resident all year.
Your spouse and children on L-2 visas are tested the same way, each on their own days.
Your L-1 arrival year gets a dual-status return and no standard deduction.
The figures are for 2026 and assume you pass the substantial presence test in your arrival year.
| Arrival year | Later years | |
|---|---|---|
| Income taxed | Split at your start date US income before it, worldwide income after | Worldwide income For the whole year |
| Tax return | Form 1040, marked Dual Status Return Form 1040-NR can serve as the statement for the months before | Form 1040 |
| Standard deduction | None You can still itemize | $16,100 For a single filer |
| Married couples | Married filing separately Unless you and your spouse make the joint election | Joint or separate returns |
The Section 6013(h) election taxes you both on worldwide income all year, including pay from before the move. A couple can make it only once. For tax year 2025, the IRS did not accept dual-status returns by e-file, so they were filed on paper.
What trips up L-1 transferees in their first US years?
Your pay still comes from home
Pay for work done in the US is US income, whichever company pays it and wherever it is paid. The same rule reaches a spouse who works from the US for an employer back home.
You still earn income back home
Bank interest and rent from a flat back home are taxable in the US from your start date. So is the gain when you sell shares you hold there.
Your assignment runs past 5 years
An L-1A can stay up to 7 years, past the usual 5-year limit on home coverage. An L-1B’s 5-year maximum fits within that limit. If your L-1A assignment is expected to run past 5 years, you may owe US Social Security and Medicare from the start.
You are married in your first year
Filing separately in a dual-status year means the 0.9% Additional Medicare Tax applies to your wages above $125,000. Your employer withholds it only above $200,000, so tax on the wages in between is due with your return.
A US CPA can plan your L-1 move and prepare every return after it.
Valim’s CPAs prepare and file only the US returns of L-1 visa holders. We share the figures with the accountant who files your return at home.
- We work out your residency start date from your travel dates, then prepare your dual-status return and each Form 1040 after it.
- We plan the move before residency starts and compare a dual-status first year with the joint election.
- We set estimated payments for tax your payroll does not withhold.
- Your instant quote prices each foreign account and fund, and each company abroad you own more than 20% of.
- Your fee covers our reply to a notice from the IRS or your state about a return we prepared. That includes a question about your residency start date.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
L-1 visa tax questions.
How are L1 visa holders taxed?
L-1 visa holders are taxed like other US workers once they pass the substantial presence test. A transferee who arrives by early July usually passes it in the first year, which becomes a dual-status year. Pay for their US work is US income, even when the employer abroad runs the payroll. Social Security and Medicare apply too, unless a certificate of coverage keeps the worker in the home country’s system.
Is L1A better than H1B?
For tax, neither is better: the same rules apply to L-1A and H-1B workers. Days on either visa count toward residency, while a J-1 visitor’s days can be exempt. The practical difference is Social Security. An L-1 worker sent from a country with an agreement is more likely to get a certificate of coverage. Other differences, such as the L-1A’s 7-year limit against the H-1B’s usual 6, are immigration rules.
How much tax do you pay on $100,000 in the USA?
For 2026, a single resident earning $100,000 in wages owes $13,170 of federal income tax. That is after the $16,100 standard deduction. Employee Social Security and Medicare add $7,650, for $20,820 before credits and state tax. A dual-status first year has no standard deduction, so with nothing to itemize, you owe $16,712 of income tax on the same pay. On contract fees, a resident O-1 contractor owes both halves of Social Security and Medicare as self-employment tax, and a nonresident usually owes none.
Do L-1 visa holders pay Social Security tax?
Yes, L-1 visa holders pay FICA, the US Social Security and Medicare tax, unless a totalization agreement applies. That exemption generally takes a transfer by the same employer, for an assignment expected to last 5 years or less. The worker also needs a certificate of coverage from the home country to prove it. The US has no such agreement with India, Mexico or China. A Canadian sent on an L-1 can stay in Canada’s system, unlike a TN professional hired by a US employer.
Is my salary from before the move taxed in the US?
Pay for work abroad is usually outside US tax if you receive it before your residency start date. Until that date, you are a nonresident alien, taxed only on US income, which a Form 1040-NR statement reports. Pay for that work received after your start date, such as a bonus, is taxed. So is all of it if you and your spouse elect to be treated as residents for the whole year. It is also taxed if an earlier US visit that year pulled your start date back before you received it.
Sources
- 26 U.S.C. § 7701, Definitions
- 26 C.F.R. § 301.7701(b)-4, Residency time periods
- 26 U.S.C. § 6013, Joint returns of income tax by husband and wife
- 26 U.S.C. § 861, Income from sources within the United States
- 26 U.S.C. § 1401, Rate of tax on self-employment income
- 26 U.S.C. § 1402, Definitions (self-employment income)
- 26 U.S.C. § 3101, Rate of tax (Social Security and Medicare)
- IRS, Publication 519 (2025), U.S. Tax Guide for Aliens
- IRS, Publication 15 (2026), Employer’s Tax Guide
- IRS, Rev. Proc. 2025-32 (2026 inflation adjustments)
- IRS, Taxation of aliens by visa type and immigration status
- Social Security Administration, totalization agreements overview
- USCIS, L-1A Intracompany Transferee Executive or Manager
- USCIS, L-1B Intracompany Transferee Specialized Knowledge
Reviewed and updated September 2026. General information, not advice for your situation.
Without a certificate of coverage, a $200,000 L-1 salary costs you $14,339 in Social Security and Medicare for 2026.
A certificate of coverage fits the L-1 more often than any other work visa. Every L-1 worker is transferred within one employer group, which is what the agreements look for.
Sent from India: Social Security
$11,439
The 6.2% rate applies to the first $184,500 of pay.
Sent from India: Medicare
$2,900
The 1.45% rate applies to all pay, with no cap.
Sent from India: total
$14,339
India has no Social Security agreement with the US.
Sent from the UK, with a certificate
$0
She stays in the UK system, so no US Social Security or Medicare is withheld.
Both managers are single, and the figures use the 2026 employee rates and wage base. The 0.9% Additional Medicare Tax applies only above $200,000 of wages, so neither owes it. The employer of the manager from India pays a matching $14,339. The UK manager’s certificate comes from the UK authorities, and her employer keeps it on file.