Employees Working Outside of the United States
Employees of Indiana University who perform services outside of the United States may require a special tax set-up and additional forms to be completed. Please select the appropriate option below to determine the correct action for an employee working and living abroad.
For IU departments: Please see the Standard Operating Procedure Managing Employees Working Outside of Indiana for information on how to process employees in your department with this set-up.
U.S. citizens and resident aliens (for tax purposes) living and working abroad for IU are still subject to applicable Federal, Social Security and Medicare taxes. All U.S. citizens are taxed on their worldwide income and U.S. employees abroad should be sure to read IRS Publication 54.
All U.S. employees must submit the “Certification of Employment Outside of the United States” form to the address indicated below.
Federal Tax Exemption
The IRS Publication 54 mentioned above describes the unique tax situation of U.S. sourced income while living abroad. The publication also explains the purpose of the Form 673. This form will exempt an employee from having Federal taxes withheld, but taxable wages will still be reported on the employee’s Form W-2.
If the employee has determined this exemption applies, the Form 673 will need to be completed, signed and submitted to the address indicated below before the exemption will commence. Please see Section 2: Withholding Tax of the Publication indicated above.
Indiana State Tax Exemption
Individuals living and working abroad will also need to determine whether a residency will be maintained in a state while they are abroad. For Indiana, the rules regarding state taxation depend upon whether the employee is domiciled in the state of Indiana. Please see the Information Bulletin #55 – Determination of Residence for Individuals Leaving Indiana for Employment in a Foreign County for more information.
Please note that it is the employee’s responsibility to determine the appropriate exemption from Federal and State taxes. The exemptions depend on the employee’s personal tax information and thus University Tax Services is not able to assist in determining the exemptions. It is always advisable for an employee who will be moving abroad to seek the counsel of a tax advisor for personal tax planning.
Non-U.S. citizens working for Indiana University and working abroad are not subject to any Federal, State, Social Security or Medicare taxes. Only U.S. citizens are subject to their U.S. sourced income while abroad.
All non-U.S. employees working abroad - including temporary assignments - will need to request their HR representative in their department to update their Tax Location to indicate a country other than the United States. See IU Department instructions above or contact University Tax Services at firstname.lastname@example.org with questions.
|Mail:||University Tax Services – Poplars 505
400 E. Seventh Street
Bloomington, IN 47405-3085
For specific questions, please contact University Tax Services.
*Please note that unless Tax Location is updated by the employee's department, all applicable Federal, State, Social Security and Medicare taxes will continue to be withheld. Departments can update Tax Location by following instructions above for IU Departments.