Employees Working Abroad

Use these guidelines to better understand tax obligations of Harvard employees working outside the United States. For general information on tax obligations of all Harvard payment recipients outside the U.S., please see U.S. or Foreign-Source Income.

Topics covered below:

• U.S. Citizens and Resident Aliens Working Outside the United States

• Nonresident Aliens Working Outside the United States

• Important Tax Forms

U.S. Citizens and Resident Aliens Working Outside the United States:

U.S. citizens and resident aliens, for tax purposes are taxed on their worldwide income

• U.S. citizens and resident aliens working outside the United States are advised to read IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

• If an employee determines that he/she is eligible to claim the foreign earned income exclusion, an IRS Form 673, Statement For Claiming Benefits Provided by Section 911 of the Internal Revenue Code must be submitted to Tax Services

• IRS Form 673 is valid for one calendar year and must be resubmitted to Tax Services in December of each year for the next calendar year in order for the foreign earned income exclusion to be effective for that next calendar year

• The employee may also submit a U.S. Citizen & Resident Working Abroad State Declaration, if appropriate, to Tax services for exemption from Massachusetts state income tax withholding and reporting

• An IRS Form W-2 Wage and Tax Statement will be issued to U.S. Citizens and Resident Aliens Working Abroad

• Note: FICA (Social Security, OASDI and Medicare) taxes and reporting requirements apply to wages paid to U.S. Citizens and Resident Aliens, regardless of where the services are performed

• For information on taxation of moving and other expenses incurred while working abroad, see Moving and Related Expenses

Nonresident Aliens Working Outside the United States:

• A clear indication of the location of the activity is necessary on all supporting documentation for the payment to be correctly classified. This applies to both service and non-service income. For Harvard employees, payments must be processed as outlined in Harvard’s Payroll Policy and with the assistance of Harvard Global Support Services.

• No Federal/State income tax or FICA (Social Security and Medicare) tax will be withheld from the employee's compensation

• An IRS Form W-2 Wage and Tax Statement will not be issued to nonresident aliens working abroad

Related IRS Publications and Forms