TAXES IN THE U.S.
While working in the U.S. you are obliged to pay Federal Income Tax and State Income Tax* – the money will be redirected from your weekly payments. These, however, are often refundable after departure from the country and in many cases the refund grants you the total amount paid. What is important is to contact a travel agency on return to Bulgaria and claim the refund by filling in the necessary forms.
There are cases in which SWT participants are obliged to pay other taxes, such as Social Security Tax, Medicare Tax or FICA, generally paid by American citizens. Such payments are not necessary due to the specificities of the J1 non-immigrant visa. In such cases it is crucial to stick to the regulations of the SWT program and keep all the relevant documentation and thus claim the amount paid for these taxes upon your return in Bulgaria.
It is possible that you would be required to pay some other taxes such as local tax or insurance taxes, which are non-refundable but their amount is fairly insignificant.
Documents needed to claim a tax refund:
W2 – a document that should be issued and sent to the participant (between 1-31 January) by the employer at the end of the working year. It states:
- The type and amount of taxes paid by the participant. The document could be sent by post, in which case the participants should make sure they provide their Bulgarian postal address, or uploaded by the employer in an online platform. If there are issues with the reception of the W2 document the participant should be able to present the final paycheck received, which is another proof of income/taxes.
- Social Security card – a document issued to the participant by the Social Security Administration upon their arrival in the U.S. It contains a number used for the identification of the participant.
The procedure for receiving a tax refund paid in the U.S. is started by handing in an American tax declaration, required from every person who has worked in the country, irrespective of the length of their stay or job. The details around the procedure vary according to the sponsor/agency the participant decides to use.
*states which do not require a State Income tax – Alaska, Florida, Nevada, Texas, south Dakota, Washington, Wyoming, New Hampshire, Tennessee