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grant gerstners
Joined: 13 Jan 2010
Location: USA
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 Posted: Wed May 26, 2010 5:56 pm Post subject: Residential certificate |
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I am from / in the USA. Along with my notice of appointment and contract is a sheet saying that to get the tax exemption, I must bring a "Residential Certificate--issued from your country".
What is that and how do I get one? |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed May 26, 2010 6:59 pm Post subject: Re: Residential certificate |
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| grant gerstners wrote: |
I am from / in the USA. Along with my notice of appointment and contract is a sheet saying that to get the tax exemption, I must bring a "Residential Certificate--issued from your country".
What is that and how do I get one? |
File an 8802 form with the IRS.
http://www.irs.gov/pub/irs-pdf/f8802.pdf
and you get the 6166 Residency Certificate returned. There ARE fees to pay for it.
If you are still in the states your local IRS office can help or check their website for details.
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grant gerstners
Joined: 13 Jan 2010
Location: USA
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| Posted: Thu May 27, 2010 6:40 pm Post subject: |
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Thanks ttompatz, for being available to answer questions from a newbie.
Is the tax exemption that big a deal? Are there pros and cons either way (taking the exemption versus not)?
I did a search but admit I did not look in-depth. If there's already a thread addressing this and a link is within easy reach, would appreciate getting the link.
I live in a city with a US Fed Gov't building including an irs office. Went today and they made it sound like filing and processing the document could take weeks and that the process should have been begun over a month ago.
It does not look like I will be arriving in South Korea with a Residential Certificate. |
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Illysook
Joined: 30 Jun 2008
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| Posted: Thu May 27, 2010 6:52 pm Post subject: |
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| Oh man, I was supposed to get one of those as well. I totally forgot about it and I leave tomorrow! |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Thu May 27, 2010 10:57 pm Post subject: |
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| grant gerstners wrote: |
Thanks ttompatz, for being available to answer questions from a newbie.
Is the tax exemption that big a deal? Are there pros and cons either way (taking the exemption versus not)?
I did a search but admit I did not look in-depth. If there's already a thread addressing this and a link is within easy reach, would appreciate getting the link.
I live in a city with a US Fed Gov't building including an irs office. Went today and they made it sound like filing and processing the document could take weeks and that the process should have been begun over a month ago.
It does not look like I will be arriving in South Korea with a Residential Certificate. |
Start the paperwork now, Get the 6166 when it arrives.
As an American you qualify for about an $80k exemption on foreign earned income (so no US taxes payable on your Korean income) and your Korean income tax is waived for the 1st two years at a PS. The savings in your pocket is in the neighborhood of 2-3% of your gross salary (per year) or about 1 million won or so per year.
It will pay for a week on the beaches of SE Asia during your winter break.
On the con side - you lose $1000 per year in tax money if you don't do it.
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grant gerstners
Joined: 13 Jan 2010
Location: USA
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| Posted: Fri May 28, 2010 11:10 am Post subject: |
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| ttompatz wrote: |
| grant gerstners wrote: |
Thanks ttompatz, for being available to answer questions from a newbie.
Is the tax exemption that big a deal? Are there pros and cons either way (taking the exemption versus not)?
I did a search but admit I did not look in-depth. If there's already a thread addressing this and a link is within easy reach, would appreciate getting the link.
I live in a city with a US Fed Gov't building including an irs office. Went today and they made it sound like filing and processing the document could take weeks and that the process should have been begun over a month ago.
It does not look like I will be arriving in South Korea with a Residential Certificate. |
Start the paperwork now, Get the 6166 when it arrives.
As an American you qualify for about an $80k exemption on foreign earned income (so no US taxes payable on your Korean income) and your Korean income tax is waived for the 1st two years at a PS. The savings in your pocket is in the neighborhood of 2-3% of your gross salary (per year) or about 1 million won or so per year.
It will pay for a week on the beaches of SE Asia during your winter break.
On the con side - you lose $1000 per year in tax money if you don't do it.
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Trying to get this straight:
1. "As an American you qualify for $80K exemption on foreign earned income."
Do you mean to say that I qualify for the exemption with or without the residential certificate; or only with the residential certificate?
2. " your Korean income tax is waived for the 1st two years at a PS"
Do you mean to say that my Korean income tax is waived for the first to years in a public school with or without the residential certificate or only with the residential certificate?
3. I'll continue to look for old messages addressing this. Surely it has been covered before, unless it's something new. |
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ChilgokBlackHole
Joined: 21 Nov 2009
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| Posted: Fri May 28, 2010 12:03 pm Post subject: |
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| ttompatz wrote: |
| As an American you qualify for about an $80k exemption on foreign earned income (so no US taxes payable on your Korean income) and your Korean income tax is waived for the 1st two years at a PS. The savings in your pocket is in the neighborhood of 2-3% of your gross salary (per year) or about 1 million won or so per year. |
Are you 100% sure that the treaty allows you to claim an exemption in *both* places? From what I understand, you can be a resident of Korea and not pay US tax on your first $85k, or you're a resident of the US and claim the Korean exemption. It doesn't make sense to be able to claim both. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Fri May 28, 2010 1:26 pm Post subject: |
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| ChilgokBlackHole wrote: |
| ttompatz wrote: |
| As an American you qualify for about an $80k exemption on foreign earned income (so no US taxes payable on your Korean income) and your Korean income tax is waived for the 1st two years at a PS. The savings in your pocket is in the neighborhood of 2-3% of your gross salary (per year) or about 1 million won or so per year. |
Are you 100% sure that the treaty allows you to claim an exemption in *both* places? From what I understand, you can be a resident of Korea and not pay US tax on your first $85k, or you're a resident of the US and claim the Korean exemption. It doesn't make sense to be able to claim both. |
1.) File the forms.
2.) Your income is taxable in the US (subject to the "foreign earned income" tax deduction)
AND you are tax exempt (if you are at a public school or public university) from paying income tax in Korea for the first 2 years.
If you don't file the forms:
2.) Your income is taxable in the US (subject to the "foreign earned income" tax deduction)
AND you pay income tax on your Korean earned income while you are in Korea.
The (Korean) tax shelter was implemented to attract NETs to the public school system and away from the private academies about a decade ago and hasn't been changed yet.
pick one.
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