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  • J1 student and independent contractor

    Hi,

    I am finding an information on J1 student status. Can J1 student work as an independent contractor? I understand that J1 is very stricted to on compus employment. But since as an independent contractor, it is considered "self-employed." So I am not sure whether it will be illegal.

    Moreover, what about getting paid selling stuff online, e.g. E-Bay? or getting paid for doing economic/other experiments. Will J1 student be legally doing that? How are they classified?

    Thank you.

  • #2
    Hi,

    I am finding an information on J1 student status. Can J1 student work as an independent contractor? I understand that J1 is very stricted to on compus employment. But since as an independent contractor, it is considered "self-employed." So I am not sure whether it will be illegal.

    Moreover, what about getting paid selling stuff online, e.g. E-Bay? or getting paid for doing economic/other experiments. Will J1 student be legally doing that? How are they classified?

    Thank you.

    Comment


    • #3
      J1 is for educational means, and unless you have permission to work from your sponsor e.g. school, you cannot work in the united states.

      Comment


      • #4
        ..if you adjust status from F to J, make sure you are also not subject to home 2 year requirement. That could complicate matters

        Comment


        • #5
          <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by lookling:
          Hi,

          I am finding an information on J1 student status. Can J1 student work as an independent contractor? I understand that J1 is very stricted to on compus employment. But since as an independent contractor, it is considered "self-employed." So I am not sure whether it will be illegal.

          Moreover, what about getting paid selling stuff online, e.g. E-Bay? or getting paid for doing economic/other experiments. Will J1 student be legally doing that? How are they classified?

          Thank you. </div></BLOCKQUOTE>
          It may be possible if it does not interfere with your obligations on your J1 visa sponor. Selling items on E-bay does not require an EAD if you are doing it as a hobby. However, it your self employment income directly comptetes with the job or research requirements of the sponsor. then you will violate the terms of your visa.

          Tax issues: independent contractor income has no withholding requirements, generally, unless you are considered a non resident alien for tax purposes. For J1 visa holders, you are exempt for counting the days present in the US for a period of two calendar years. Thus, any withholding will be at the 30% rate or lower income tax treaty rate during those two calendar years. The US has 54 tax treaties with various countries and see Publication 901 and 515 for more details at the IRS web site. You could provide a W-8ECI to show effectively connected income and not have withholding taken out. That way, you can count expenses directed related to producing that income. You are still not eligible to pay self employment tax as a non resident alien for tax purposes (See publication 519 pp 42-49 for more details). If your treaty exempts the income, you must provide a W-8BEN to the payer while completing parts one and two.

          With the tax situation, it may be prudent not to indulge into self employment or hobby income while on a J1 visa holder even if your sponsor allows it. Your tax situation will get complicated.
          "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre

          Comment


          • #6
            <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by davdah:
            Generally the sponsor will forbid you doing any other activities that provide income. It is actually up to the sponsor so the best thing to do is ask them. The worst they can do is say no. It may cause tax issues. Your sponsor will withold taxes at a rate based on the income they provide. As in independent contractor you have to file quarterlies etc. on your own. You will be responsible for the taxes on all income. It would be in your best interest to follow the program as it is given. </div></BLOCKQUOTE>
            Correction:
            J visa holder are considered non resident aliens for tax purposes for a period of two calendar years. Thus, no self employment tax will be required to pay for non resident aliens. However, the income must have a withholding rate of 30% or the lower tax treaty rate unless it is considered effectively connected income. If it is considered effectively connected income, then it is treated like regular income.

            However, selling items on e-bay may not violate the terms of his sponsorship if it hobby income, in other words, not for profit. Thus, no EAD is required.
            "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre

            Comment


            • #7
              Hi,

              Thank you all for replying. It's very helpful.

              I guess my school won't allow me to do it officially. So I don't think I will jump into this pool of problem.

              However, let me clarify the problem a little bit. (I still want to know though since it might be helpful for others too.)

              Basically, the job is being an online tutor. They say tutors are independent contractors to the company and they will issue a 1099 form if they pay me more than $600/year. The job description is that you tutor online by yourself at home, any time you want to. The expected hour is just 5 hrs/week - I planned to do it at night (1-2 hrs/night), so I don't think it will interfere with school work at all.

              Does this change anything? One can say that it's a hobby, but it looks like "working" to me. So I guess I should fold the plan and throw it away.

              Thank you again for all your help

              Comment


              • #8
                No. They say they'll send out paychecks.

                Comment


                • #9
                  Will this still be a problem with J-1 student though? (aside from the sneaky company and tax issues).

                  Thanks

                  Comment


                  • #10
                    <BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by lookling:
                    Will this still be a problem with J-1 student though? (aside from the sneaky company and tax issues).

                    Thanks </div></BLOCKQUOTE>
                    If the J1 sponsor is violating state or federal labor laws, you can report them to the appropriate agencies including the the school which the program is administered too.
                    "Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." John Adams on Defense of the boston Massacre

                    Comment


                    • #11
                      Hi,

                      I am in the same status as the original poster. However, I did not realize until now that, to work online, I also need the school permission. I have already done it for 2 months. I will definitely quit.

                      I feel worried about this issue since I already did it. Could you please suggest me about it? Should I tell the school about it or should I keep quiet? If I kept it secret, what if they find out later. Will I be revoked my VISA?

                      I am not worried about tax issues since so far I got less than 200 dollars (for 2 months).

                      Thank you.

                      Comment


                      • #12
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                        • #13
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