Welcome To The Presentation On Tax

Terms & Different Visas

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Visa Statuses

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 TYPES OF VISAS

1) H1B
2) US Citizens & Green Card holders
3) TN - Trans National
4) L1 – Can work for a specific company
5) OPT - Optional Practical Training
6) H4 – Dependent visa
7) B1 – Business visa
8) Refugee Visa
9) F1 Visa

- EAD (Employment Authorization Document)

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 H1B Visa

H1B is a work authorization in USA which is issued for 3 years initially and can be extended 3 more years which
makes it valid for a term of 6 years. The regulations define it as a “specialty occupation” as requiring theoretical
and practical application but not limited to, architecture, engineering, mathematics, physical sciences, social
sciences, medicine and health, education, law, accounting, business specialties, theology, and the arts and
requiring the attainment of a bachelor’s degree or its equivalent as a minimum. Likewise, the foreign worker
must possess at least a bachelor’s degree or its equivalent and state license(if required to practice in that field).
H-1B work-authorization is strictly limited to employment by the sponsoring employer.

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 GC (Green Card)

A United States Permanent Resident Card, also known as a green card, is an identification card attesting to the permanent resident
status of an alien in the United States of America. Green card also refers to an immigration process of becoming a permanent
resident. The green card serves as proof that its holder, a Lawful Permanent Resident (LPR), has been officially granted immigration
benefits, which include permission to reside and take employment in the USA. The holder must maintain permanent resident status,
and can be removed from the US if certain conditions of this status are not met.

Green cards were formerly issued by the Immigration and Naturalization Service (INS). That agency has been absorbed into and
replaced by the Bureau of Citizenship and Immigration Services (BCIS), part of the Department of Homeland Security (DHS). Shortly
after reorganization BCIS was re-named to U.S. Citizenship and Immigration Services (USCIS).

An alien with a green card application can obtain two important permits while the case is pending. The first is a temporary work
permit known as the Employment Authorization Document (EAD), which allows the alien to take employment in the United States.
The second is a temporary travel document, advance parole, which allows the alien to re-enter the United States. Both permits
confer benefits that are independent of any existing status granted to the alien. For example, the alien might already have
permission to work in the United States under an H1-B visa.

Green Cards are valid for 10 years initially and they may extend the visa as and when required.

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 US Citizen

US Citizens are the people who are born in U.S. or if they have met the criteria to obtain U.S. citizenship.

U.S Citizens have no constraints/restrictions in terms of obtaining a job in the U.S. They can work with any
employer and can apply for any position there.

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 TN- (Trans National Visas),
L1 & Business Visa

TN:
For Mexicans and Canadians. They can obtain the visas directly by applying for the same. They can work in the USA for long term
with periodic renewal. Visa is valid for 6 months and just requires a formal visit to the borders upon expiration with the client letter.

L1:
L1 is a Company Specific Visa for Eg: If a Client has office in India and US and if it sends any of its employees/Consultants who are
currently working in India to US on any project then they can be sent on a L1 visa and a person who is on a L1 Visa is not
authorized to work with any other company other than the visa sponsoring client.

Business Visa:
Again like L1, a person having a B1 Visa is not authorized to work with any company. Reasons for issuing B1 Visa are:
• A person going for an Official tour
• Attending seminars
• Official meetings
• Training etc.

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 Refugee Visa

Refugee Visa or Refugee status is a form of protection that may be granted to people who meet the definition of
refugee and who are of special humanitarian concern to the United States. Refugees are generally people
outside of their country who are unable or unwilling to return home because they fear serious harm. These visa
holders get an EAD by the USA upon entrance into US, so they are allowed to work.

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 Employee Authorization
Document

A Form I-766 employment authorization document or EAD card, known popularly as a work permit, is a
document issued by the United States Citizenship and Immigration Services (USCIS) that provides temporary
employment authorization to noncitizens in the United States.

Usually consultants on an EAD cannot work on perm positions as the EAD has an expiration of 1-2 years.

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Employment Types and Tax Terms

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 Types Of Employments &
Tax Terms

1) Contracts
A. Corp to Corp (Tax Term)
B. W2 (Tax Term)
C. 1099 (Tax Term)
2) Contract to Hire
3) Permanent
4) Corp to Independent

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 Corp to Corp (Tax term)

A Corp to Corp or Corporation to Corporation agreement is one where a Client (as shown in previous figure)
makes an agreement with the Preferred Vendor(Randstad), in turn preferred vendor has an agreement with the
vendor company (Corporation that holds the Visa of the Consultant) for a particular Consultant.
In Corp 2 Corp, the corporation that holds the visa of the consultant is responsible for the Taxes of the
consultant and also the benefits.
Visa holders who are not independent or who require a sponsorship usually work on Corp to Corp but this has no
limitations, Green Card holders and US Citizens can also work on Corp to Corp if they are willing to.

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 W2 (Tax Term)

In W2 the company that runs the payroll and holds the W2 of the candidate is responsible to pay the taxes
of the candidate, though the consultant is charged. The benefits here are to be discussed with the
consultant since they differ from company to company and mostly the corporations holding the W2 have
“Optional benefits” where-in if the consultant applies benefits, they get charged accordingly.

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 1099 (Tax Term)

1099 (Ten ninety-nine) agreement is similar to Corp to Corp or we may say Opposite to W2 but in this case
the consultants are independent and also the consultants takes care of their individual taxes.
Only U.S Citizen, Green Card or an independent candidate can work on 1099 (OPT EAD and H1B visa holders
are not authorized to work on 1099). Benefits on 1099 are again mostly Optional, if the candidate is
interested they can apply and they get charged accordingly.

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 Contract to Hire

This is an arrangement where the Client decides to take the consultant/candidate on its permanent payroll after
completion of the Contract. During the contractual period the Preferred vendors will get their marginal share as
decided in the contract/MSA and after the contract, Client just pays a conversion fee which is a lump-sum
amount to the preferred vendor. The contractual period may be on Corp 2 Corp, W2 or 1099.
In a Contract to Hire agreement proper arrangement is made with the preferred vendor regarding the share of
the conversion amount.

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 Permanent Hire

In permanent placement the client will hire a consultant directly and the consultants will be on the payrolls of
the client. Mostly there are a lot of benefits offered be the client to consultants like relocation expenses, 401K
Plan, Insurance, Dental and Vision Etc. Recruitment companies or suppliers just play a role in the in the
recruitment process and paperwork.

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 Corp to Independent
OR Corp to Own Corp

Corp to Independent is nothing but Corp to Corp, here the candidates own their corporation and the
Recruitment company runs the payroll to the own corporation of the consultant. Green Card holders and U.S
Citizens can only do this since only they can own a corporation with the Federal ID.

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Thank You!

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