I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.
See all posts Frank GogolClaiming Tax Credits for H-1B Visa Holders
Updated on April 9, 2024
Written by
Written by
Reviewed by
Rohit Mittal
Reviewed by
Rohit Mittal
Rohit Mittal is the co-founder and CEO of Stilt. Rohit has extensive experience in credit risk analytics and data science. He spent years building credit risk and fraud models for top U.S. banks. In his current role, he defines the overall business strategy, leads debt and capital fundraising efforts, leads product development, and leads other customer-related aspects for the company. Stilt is backed by Y Combinator and has raised a total of $275M in debt and equity funding to date.
See all posts Rohit MittalAt a Glance
- H1B visa holders in the U.S. can claim tax benefits, including deductions, exemptions, and credits.
- Deductions encompass itemized deductions like state and local taxes, medical expenses, and mortgage interest.
- Exemptions are available for personal and dependent exemptions, providing additional tax benefits.
- Tax credits, such as the child tax credit and education credits, can be utilized to offset tax liability.
US resident aliens, like US citizens, are entitled to claim equal deductions and are also allowed to use a similar filing status. But what are these deductions?
Read on to find out!
Tax Benefits That an H1B Visa Holder Can Claim
Below are the H1B visa tax deductions, exemptions, and credits available to H1B visa holders living in the U.S.
H1B Visa Tax Deductions
US resident aliens also have the right to claim itemized deductions as other US citizens through a Schedule-A of Form 1040. The deductions include state and local income taxes, medical and dental expenses, casualty and theft losses and interest on a home mortgage among others. Charitable contributions and miscellaneous deductions are other deductions you can claim too. Please note that non-resident aliens and dual-status aliens who need to itemize their deductions.
H1B Visa Tax Exemptions
These can offer significant tax relief for you if you know the right exemptions to claim. Normally, US residents are allowed to claim personal exemptions and exemptions on dependents but non-residents can only claim for a personal or spousal exemption if married filing separately.
H1B Visa Tax Credits
This is a sum that offsets your tax liability. US residents are allowed to claim a number of tax credits which may include the child tax credit, education credits, foreign tax credit and credit for elderly and the disabled among others. Other tax credits include earned income credits, adoption credits and child and dependent care credits.
H1B Visas Holders With a Spouse and Dependents Living in the U.S.
Single persons have relatively less socio-economic obligations in comparison to married persons with dependants Filing as a person with a family thus allows you to save more taxes in comparison to filing as a single person. What are the key reliefs to your tax liability?
Exemptions
You should know that you are already entitled to having a personal exemption that works by reducing your taxable income by almost $4000 as at 2015. Moreover, you can also get an extra exemption for your spouse and dependent child.
Example
Where a husband and wife file jointly and have three dependent children, they can claim a total of 5 exemptions. In such a case, their total exemptions would amount to 5 x $4,000= $20,000 for the year 2015.
Deductions
The deductions that you get mostly depends on your filing status. By filing as married filing jointly you can get better standard deduction amounting to about $12,600 as compared to a single person ($6,000) as at 2015.
Tax brackets
These are different for every filing status. For example, your taxes will no longer be taxed at the same rate when married as compared to when you were single. Here is an example.
| Tax rate | 10% | 15% |
| Taxable income for the Single filers | Up to $9,225 | $9,226 – $37,450 |
| Taxable income for Married filing jointly or qualifying widow(er) | Up to $18,450 | $18,451 – $74,900 |
| Taxable income for Married filing separately | Up to $9,225 | $9,226 – $37,450 |
| Taxable income for Head of household | Up to $13,150 | $13,151 – $50,200 |
H1B Visa Child Tax Credit
For every child who qualifies, you can get up to $1,000 as a child tax credit. This is an example of a dollar-for-dollar relief on your tax bill.
Check these facts about a child tax credit or visit this site to determine whether your child will qualify for child tax credit.
What tax benefits can you claim if you have a dependent child as a U.S. resident alien?
As a US resident alien, you can also get other tax credits as long as you are eligible and can claim them. These tax credits include
Additional Child Tax Credit
An additional child tax credit is merely a refundable portion of the Child Tax. However, this mostly works when your tax liability is lower than your child tax credit. As an example, your tax liability may be $800 for the year and you qualify for $1,000 child tax credit. This Child Tax Credit will reduce your tax bill to $0 and you can get an additional $200 as Additional Child Tax Credit if you qualify.
Child and Dependent Care Credit
What happens if you have a dependent but you are not employed? Or perhaps you have been looking for work. In such circumstances, you can get a child and dependent care credit which is a credit that reduces your overall tax liability if you paid for your dependent’s care while you are searching for employment. If your filing status is married filing jointly you can only use this credit if you are working or attending college as a full-time student.
Adoption Tax Credit
Do you have an adopted child? If so, you are qualified to seek for Adoption Tax Credit aside from all the other standard credits and exemptions relating to the child.
Read More
H1B Visa Tax Credits FAQ
Below are some of the commonly asked questions about H1B visa taxes. Read on to see if your questions are answered!
Can you claim for a wife who is not in the U.S. or has not been in the U.S.?
Normally, you will not be allowed to file as married filing jointly if you or your spouse were non-resident aliens at any time of the tax year. To file a return, your spouse will have to get a Social Security Number (SSN), in most cases, or an ITIN (Individual Tax Identification Number). If your spouse is not eligible to get an SSN, they will be required to file form W-7 with the IRS. You will also need to show some supporting documents to prove your spouse’s age, identity, and even their citizenship. Visit this link for more.
Can you claim for a child that doesn’t live with you in the U.S. and has never visited?
No, you are not allowed. You can only claim for a tax credit if your child is eligible. Check here if your child qualifies or if you are eligible.
Where do I get a passport for my dependent who is certified for ITIN when I live outside the country?
It is easy to get a passport if you are in the US, how about when you live outside? Get your passport from an issuing agency or any US consulate office in your country. See How to file dependent’s ITIN
Can I still file under the married category if I am a resident alien who recently got married?
You can only file under this category if you got married before the 31st of Dec of the previous year.
How much time does it take for a refund to come after taxes?
According to IRS rules, e-filed tax returns with direct deposits are processed in less than 21 days after the file is received. For mail paper returns, the refund processing time is relatively longer taking 6 to 8 weeks from the time it is received.
Frank Gogol
I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.