Korean Job Discussion Forums

passport220 · Joined: 14 Jun 2006 Location: Gyeongsangbuk-do province

As an American citizen I understand I can avoid having a category of tax withheld if I can provide a Residence Certificate. I am sure it is posted here but I can not find it. I checked the FAQ (now I know how to identify a poisons snake) and I did a search. Can someone direct me to the information or a thread?

RobinH · Posted: Wed Sep 06, 2006 12:50 am Post subject:

American or Korean taxes? You are already exempt from US income tax on up to 70,000$US if you are in Korea for a year. You don't need any certificate for that, as far as I know.

You can get a "Certificate of Alien Registration" at the Immigration office for 1,000won and your ARC. At the Omokyo office, it's on the left as you enter the building.

ttompatz · Joined: 05 Sep 2005 Location: Kwangju, South Korea

Milwaukiedave · Joined: 02 Oct 2004 Location: Goseong

Go to the IRS website and look up form 8802. You need to fill out the form and submit a statement (on a seperate piece of paper) that says:

wylies99 · Joined: 13 May 2006 Location: I'm one cool cat!

Okay, stupid question- they won't withhold them, but will you owe them at the end of the year?

ttompatz · Joined: 05 Sep 2005 Location: Kwangju, South Korea

passport220 · Joined: 14 Jun 2006 Location: Gyeongsangbuk-do province

Milwaukiedave I found the form it is 8802 btw. Thanks!
ttompatz I did a search of the Korean Tax Service web site but could not find anything that look like it would do the trick. If you have a link that can help me avoid dealing with the bureaucracy of the US IRS that would be great!

Take care

ttompatz · Joined: 05 Sep 2005 Location: Kwangju, South Korea

jellobean · Joined: 14 Mar 2006

I'm confused as to what you are asking, but here's a rundown on what I know. THIS IS NOT INTENDED AS LEGAL ADVICE (gotta make that disclaimer given my background).

There are two statuses you might choose to use if you are an American working in Korea.
Foreign Earned Income
or
Foreign Tax Credit

It is usually more advantageous in Korea to file Foreign Earned Income if you qualify because Korean taxes are lower than American taxes. (In Europe where taxes are higher, the tax credit is sometimes better.)

To qualify for foreign earned income you must have one of two things: You must be considered a resident of Korea (this means you must have already lived and worked in Korea for 1 full year prior to the start of the tax year you are filing for).
or
You must pass the physical presence test (this means that you have not, do not intend to and will not spend more than 30 of the first 365 days you are working in Korea, in the US --- and if you do, you have to ammend your tax filing later and change the status).

Usually if you are working a job with little or no vacation, you will qualify for Foreign Earned Income status from the day you arrive because you won't have 30 days to spend in the US.

If you go home to the US frequently, then you must file Foreign Tax Credit until you meet the residence test for Korea. I don't remember the exact details of the residence test, but I started working on an ARC in Korea in fall of 2005 (I had different sojourn status before that) and go home to the US 2 or 3 times a year and I know that I won't qualify for Foreign Earned Income until the 2007 tax year because I go home too much and can't pass the physical presence test.

The only way you would need to worry about it (ie might have to file the Tax Credit) with most teaching jobs is if you are a uni prof just off the boat who is planning to go home for breaks.

You can pm me if you want more info.

Milwaukiedave · Joined: 02 Oct 2004 Location: Goseong

Jello...

What your talking about is filing a US income tax return. That is not what the OP was asking.

The residence cerftificate from the IRS allows you to be exempt from paying taxes in Korea (as was mentioned before this doesn't apply to Canadians) for two years if you work at a public school or university.

passport220 · Joined: 14 Jun 2006 Location: Gyeongsangbuk-do province

Yeps, what M.D. said. Americans and I think most westerners (again not Canadians) are exempt for two years from paying Korean federal income tax to the Korean National Tax service. In order to avoid having this tax deducted from my pay and having to make a claim to have it refunded later, I need to ceritfy that I am a resident of my home country.

M.D.'s post about using the IRS tax form 8802 is the right answer. I also found out that you can be certified through you home state. In my case I am not sure if working with the state of Illinois would be any less cumbersome than the Amreican IRS.