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Omkara
Joined: 18 Feb 2006
Location: USA
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 Posted: Wed Feb 20, 2008 5:12 pm Post subject: Public Schools and Tax Form 8802 |
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This is for Americans. My school has asked me to fill out a form, 8802, which has to do with some tax agreement between our governments. I don't have a clear picuture of what this form is, its implications, etc.; hence, I'm not sure how, or even if, to fill it out.
Any insights will be helpful. |
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Ut videam
Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do
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| Posted: Wed Feb 20, 2008 5:28 pm Post subject: |
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IRS Form 8802 is a request for a letter of residency certification, Form 6166.
Under the terms of the U.S.-Korea tax treaty, public school and university teachers from the U.S. are EXEMPT from Korean income tax for two years. In order to qualify for this exemption, you need to obtain the certification of the IRS that you are a U.S. resident for tax purposes at the beginning of your time in Korea.
The form and instructions can be downloaded from the IRS website. The form can be a bit complicated, so make sure you download the instructions and follow them carefully. |
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Omkara
Joined: 18 Feb 2006
Location: USA
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| Posted: Wed Feb 20, 2008 5:38 pm Post subject: |
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Thanks.
The next question then is, if I do not apply to be exempt from Korean taxes, does that make me exempt from US taxes? Is it in effect a choice that I am making, to whom I shall pay taxes? |
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Ut videam
Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do
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| Posted: Wed Feb 20, 2008 6:19 pm Post subject: |
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| Omkara wrote: |
Thanks.
The next question then is, if I do not apply to be exempt from Korean taxes, does that make me exempt from US taxes? Is it in effect a choice that I am making, to whom I shall pay taxes? |
No. Regardless of whether you claim the exemption from Korean taxation, your first $85,700 of foreign earned income is exempt from U.S. income tax as long as you: 1) have a tax home outside the U.S. (your apartment where you live while teaching qualifies); and 2) pass the physical presence test, which means being outside the U.S. for 330 full days during any period of 12 consecutive months.
In other words, you can get your residency certification and pay no income taxes�neither Korean nor or U.S.�for the next 2 years. If you don't get the certificate, you'll pay Korean income tax (it's low, but zero is lower). As long as you stay here long enough (i.e., don't quit before your contract is up), you'll never make enough money teaching in Korea to exceed the foreign income exemption for your U.S. income taxes. |
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Omkara
Joined: 18 Feb 2006
Location: USA
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| Posted: Wed Feb 20, 2008 6:42 pm Post subject: |
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You, my friend, are very clear, very cool.
I wish you had posted when I posed this question last year! I paid Korean taxes owing to other, more ambiguous, posts. |
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glbtrttr
Joined: 04 Feb 2008
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| Posted: Wed Feb 20, 2008 11:27 pm Post subject: |
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| I'll start teaching in Korea (for the SMOE) on March 1st. I've been teaching abroad for the last 3 years (not in Korea), so have filed form 2555-EZ with my 1040 for the last 3 years. I'm worried that this will automatically disqualify me from being able to get form 6166 (actually the IRS told me that). Does anyone know how to go about getting around that?? Or will I just have to suck it up and pay Korean taxes? Thanks to anyone who can offer any insight! |
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Ut videam
Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do
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| Posted: Thu Feb 21, 2008 1:15 pm Post subject: |
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| glbtrttr wrote: |
| I'll start teaching in Korea (for the SMOE) on March 1st. I've been teaching abroad for the last 3 years (not in Korea), so have filed form 2555-EZ with my 1040 for the last 3 years. I'm worried that this will automatically disqualify me from being able to get form 6166 (actually the IRS told me that). Does anyone know how to go about getting around that?? Or will I just have to suck it up and pay Korean taxes? Thanks to anyone who can offer any insight! |
My understanding is that it depends on which test you used to qualify for the foreign earned income exemption (Form 2555-EZ). If you used the bona fide residence test, then you cannot get Form 6166�if you're a bona fide resident of a foreign country, then ipso facto you're not a U.S. resident. If you used the physical presence test, however, you may still qualify.
In order to get Form 6166, you have to show that you were a U.S. resident for purposes of taxation in the most recent tax year for which you were required to file a return. Residency doesn't necessarily mean that you were physically present there. But it has to be clear that you intend to return to the U.S. Things like maintaining a U.S. address, driver's license, bank accounts, etc. help to establish your case for U.S. residency. But if you have essentially no ties to the U.S. other than your passport, you likely won't qualify for a 6166 residency certificate. And truthfully, having been abroad for 3 years doesn't give you a strong case for claiming U.S. residency. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Thu Mar 13, 2008 8:41 pm Post subject: |
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I never filed for tax exemption with my 1st school, but now I'm going to file with my 2nd school.
Is there any way I can get those taxes I paid at the 1st school reimbursed? |
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ImInKoreaAintI
Joined: 12 Feb 2008
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| Posted: Thu Mar 13, 2008 11:13 pm Post subject: |
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| pkang0202 wrote: |
I never filed for tax exemption with my 1st school, but now I'm going to file with my 2nd school.
Is there any way I can get those taxes I paid at the 1st school reimbursed? |
Do you really want to go through the Korean red tape? Seriously now. |
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pkang0202
Joined: 09 Mar 2007
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| Posted: Fri Mar 14, 2008 3:41 am Post subject: |
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| ImInKoreaAintI wrote: |
| pkang0202 wrote: |
I never filed for tax exemption with my 1st school, but now I'm going to file with my 2nd school.
Is there any way I can get those taxes I paid at the 1st school reimbursed? |
Do you really want to go through the Korean red tape? Seriously now. |
Hell yeah, I'm here for another year. Why not? My last school kinda screwed me over so I'll be glad if I can even squeeze 1 extra won out of them. |
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Ut videam
Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do
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| Posted: Fri Mar 14, 2008 3:49 am Post subject: |
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It is possible to file an 8802 and receive residency certification for a prior year. But once you did that, you'd have to take up the issue of reimbursement with the tax service, not your former employer.
Still, if you can get the money back, it's probably worth the effort. You might be talking about a few hundred thousand won. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Fri Mar 14, 2008 3:54 am Post subject: |
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| Ut videam wrote: |
It is possible to file an 8802 and receive residency certification for a prior year. But once you did that, you'd have to take up the issue of reimbursement with the tax service, not your former employer.
Still, if you can get the money back, it's probably worth the effort. You might be talking about a few hundred thousand won. |
Assuming the old school actually paid them. If nothing was paid then you can't get the refund.
Oh, and hakwon teachers are NOT exempt from taxes like public school and pubic uni teachers are.
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