Do Native American Indians have to pay FICA?

Question

Basically I work overseas as a contractor for an off shore company. A new rule states that these companies, that are not "US" companies, have to have their employees pay FICA. Yet, I believe most of us are "independant" contrators, thus not a traditional employee. And further compounding my question is the fact that I am Native American, and wonder why I would pay FICA, since we are considered a soverign nation?

Thanks

Answer 1

This is NOT a new rule.  It's an OLD rule that is being enforced.

Answer 2

All US citizens, with rare exceptions for a very few religious sects, pay FICA taxes.

Depending upon what country you are working in, a non-US employer may be required to pay US payroll taxes and withhold FICA, Medicare and Federal income taxes from your wages if a tax treaty requires them to be withheld.  If your work for a US employer, they will have to withhold those taxes regardless of any existing treaty.

There have been cases of US companies forming off-shore corporations and using those corporations to pay US citizens, especially for work in Iraq.  They formed these shell corporations to attempt to illegally evade US payroll taxes.  I would not be surprised to see the IRS going after these companies and forcing them to pay their payroll taxes.  And if they are, I can only say that it's about time!

Independent contractors pay FICA and Medicare taxes as Self-Employment taxes on Schedule SE that you file with your tax return.  There is no way to avoid that.  Even if no tax treaty applies where you wouldn't pay them if classified as an employee, as a self-employed individual you must pay the taxes.

For Federal income tax, FICA and Medicare taxes, Native Americans are not members of a "sovereign nation."

Answer 3

Your sovereign nation is not a real sovereign nation or you would have to have a passport to get off the reservation.  It is more like a city or county municipality.  As an independent contractor (if you really are one) you are liable for self-employment tax which is both halves of Social Security and Medicare tax and income tax just like other US citizens.

Answer 4

The USA taxes on residency, citizenship, and where the income is earned. (in their territory)

Native Americans have to pay taxes on income that is earned off of the reservation.

So Yes you will have to pay the taxes, whether you are a citizen or not.

Although some counties have a tax agreement with the USA such as Canada, which eliminates/reduces(??) double taxation. But you have to apply for it.

Look it up on the Internet,

I found this site. I just skimmed it briefly, It may contain the information you need.

.http://www.us-expatriate-handbook.com/ch...