H-1B taxes explained

Start with withholding

Your W-4 choices affect every paycheck. If you under-withhold, you may owe a balance later. If you over-withhold, you loan money to the IRS for free. Recheck after raises, bonuses, or marriage.

Federal, state, and FICA

Most W-2 H-1B salaries face federal income tax, state income tax (where applicable), Social Security, and Medicare. Use the H-1B tax estimator for a planning range.

Residency for tax purposes

Immigration status and tax residency are related but not identical. If your history spans multiple countries or years, review the substantial presence test.

State income tax changes the answer a lot

Federal rules are the same wherever you live, but state income tax is not. A handful of states levy no personal income tax at all, while others take a meaningful share of your salary, and a few cities add their own tax on top. Two identical H-1B offers in different states can differ by thousands of dollars in take-home pay.

This matters most in two situations: comparing offers in different states, and moving mid-year, which can leave you filing part-year returns in two states. If either applies to you, model both scenarios before you sign or move.

Documents to keep

• W-2 and final pay stubs
• 1099 forms if any freelance side work was authorized and issued
• Prior-year returns if you had a dual-status year
• Records of days present in the US, if your residency status is not clear-cut

Other H-1B guides on this site

This page covers taxes specifically. Depending on what you are trying to work out, one of these is probably a better starting point:

• H-1B visa requirements, fees and timeline — eligibility, the cap and lottery, and the filing process.
• H-1B tax calculator — put a salary figure in and see estimated take-home pay.
• H-1B financial guide — the wider first-year money checklist beyond tax.