Kat, I’m pretty confused about the tax situation. (Disclaimer: not a tax attorney, unfamiliar with PR + tax codes for other countries you worked from)
Alice/Chloe are referred to as “employees” and you provide a work contract titled “Employment Agreement”, so it seems like you think they were employees (instead of independent contractors, which would have different tax liabilities associated with their work.)
Your org was based out of Puerto Rico, so presumably subject to things like PR minimum wage and tax reporting requirements. I know PR differs from US states in some federal income tax regulations, but IIUC PR income is still subject to Social Security, Medicare, and local taxes.
This post suggests the value of the housing should be counted as part of the “compensation” which is valued at ~$70k per year. Housing provided as a fringe benefit is taxable and subject to withholding, just like regular income tax.
Maybe it’s inaccurate to consider the AirBnB’s “housing” (it’s ambiguous given the temporary nature of the housing during travel, but also does seem to be the employees’ primary residences during their employment.) Suppose it’s not “housing”, it’s just a travel stipend—this wouldn’t be a taxable benefit.
But in that case, were you compliant with PR minimum wage requirements? If the living expenses aren’t treated as taxable income, then my understanding is they also don ’t count towards meeting minimum wage requirements.
Unless I’m missing something, it seems like there’s a double-bind: did you treat the benefits as taxable, file a W2 and withhold taxes, or did you deem them not taxable and not meet minimum wage requirements?
Piggybacking on your comment to say I am also curious about the visa situation. My impression is that countries typically severely restrict work by foreigners within their borders, even if it’s temporary, and even if you’re doing remote work. Maybe some Caribbean countries have different rules, but I’m worried that if they took Alice or Chloe to e.g. the US or UK on a tourist visa and made them work in those places, that would be illegal, and could make immigrating to those countries in the future much more complicated.
Kat, I’m pretty confused about the tax situation. (Disclaimer: not a tax attorney, unfamiliar with PR + tax codes for other countries you worked from)
Alice/Chloe are referred to as “employees” and you provide a work contract titled “Employment Agreement”, so it seems like you think they were employees (instead of independent contractors, which would have different tax liabilities associated with their work.)
Your org was based out of Puerto Rico, so presumably subject to things like PR minimum wage and tax reporting requirements. I know PR differs from US states in some federal income tax regulations, but IIUC PR income is still subject to Social Security, Medicare, and local taxes.
This post suggests the value of the housing should be counted as part of the “compensation” which is valued at ~$70k per year. Housing provided as a fringe benefit is taxable and subject to withholding, just like regular income tax.
Maybe it’s inaccurate to consider the AirBnB’s “housing” (it’s ambiguous given the temporary nature of the housing during travel, but also does seem to be the employees’ primary residences during their employment.) Suppose it’s not “housing”, it’s just a travel stipend—this wouldn’t be a taxable benefit.
But in that case, were you compliant with PR minimum wage requirements? If the living expenses aren’t treated as taxable income, then my understanding is they also don ’t count towards meeting minimum wage requirements.
Unless I’m missing something, it seems like there’s a double-bind: did you treat the benefits as taxable, file a W2 and withhold taxes, or did you deem them not taxable and not meet minimum wage requirements?
Piggybacking on your comment to say I am also curious about the visa situation. My impression is that countries typically severely restrict work by foreigners within their borders, even if it’s temporary, and even if you’re doing remote work. Maybe some Caribbean countries have different rules, but I’m worried that if they took Alice or Chloe to e.g. the US or UK on a tourist visa and made them work in those places, that would be illegal, and could make immigrating to those countries in the future much more complicated.
They could be US citizens?
My impression is that they were working in many different countries, not only in the US
It looks like Alice described events that took place in Puerto Rico as being in a “foreign country,” indicating she is not a US citizen.