Korean Job Discussion Forums

jadarite · Posted: Wed Nov 26, 2008 3:58 pm Post subject: Tax exemption - Public School

It is my understanding that we are exempt from paying taxes for up to 2 years if we work at a public school. I applied, and I got notice from IRS about not needing to file.

They put Dec. 31 2007 - Sep 24 2008 in the letter, but I didn't start until Sept. I am not sure if this is a mistake or if they are using some yearly schedule.

Being a bit confused, I am trying to get back on track. What is the normal procedure? Do we get taxes out, then report in April and get a refund, or is there a way to avoid taxes being taken out from the start?

Another issue is won. They want to see income statements, but the income statements are in Korean and note won instead of dollars. Do they just need these for their records, or do I need to submit something which shows dollars?

egrog1717 · Joined: 12 Mar 2008

Thanks for the info... There were a bunch of us talking about this the other day wondering why we weren't being taxed, lol... Goooo public school!

As for filing - anyone know the rules on this in Canada?
(Also - do I have to claim my pay in Korea on my Canadian tax return? We don't have a tax treaty *so*)

LydiaSarah · Joined: 02 Jul 2008 Location: Bucheon, South Korea

If anyone has done taxes as an American in PS, help would be appreciated. I'm supposed to fill out Form 8802 to apply for a certificate of residence, but the form is really confusing, and the instructions are not much better. If anyone has done this already and can clarify, I'd be very appreciative. I'm no good with these IRS forms.

jadarite · Posted: Wed Nov 26, 2008 10:50 pm Post subject:

Ok, I'll take the fall and call the IRS in America then.

Big Mac · Joined: 17 Sep 2005

egrog1717 · Joined: 12 Mar 2008

Thanks Mac...

One more for you... If I'm expecting income tax back from a job worked in Canada, should I still file for non-residency or will I lose that cash?
(I paid about 400 in income tax over the last year from my PT job before coming to Korea, and have more than enough in tax credits - union dues, tuition credit, etc - to ensure that I'll receive all of my tax money back)

Big Mac · Joined: 17 Sep 2005

You can try filing for non-residency and see what they say. It's just an opinion anyway...and you can cut ties after their first opinion and then ask for another opinion later and they won't even blink an eye about it.

If you left Canada early enough in the year, they will likely tell you that you are a non-resident. If you left later, they will probably tell you that you are a factual resident of Canada, which means that in their "opinion" you should pay tax in Canada on your Korean income. The key word here is "opinion." That non-residency form is not legally binding...and Revenue Canada will only say that it is an opinion. It's still good to get it anyway though...because if they say you are a non-resident it'll keep them from asking questions later if they decide to.

However, even if they tell that you are a factual resident, if you don't claim the amounts on your tax return they're not really going to go to the Korean government to find out your income unless they have a good reason. If you don't own property or have dependents in Canada, I wouldn't worry about what they say too much.

Just fill out a tax return form stating your Canadian earnings and don't tell them anything about what you earned in Korea. They'll probably send you an assessment later in the year on your Canadian earnings and that'll be it. If you are eligible for a refund, you'll still get it. If you have to pay them extra, you'll still have to. Then next year if you are in Korea for the whole year you can file a tax return with "0" for your earnings and mail it with an NR73 form for that tax year. That way when you return to Canada and start making money there again in the future, they won't come back and ask you for tax returns for those years.

One tip...change your address with Revenue Canada to your Korean address. On your tax return, use your Korean address as well. If you are using a Canadian address, then that is a tie to Canada right there.