Cruise Ship (again)

[LawrenceGR]

I had this post up once before. I wonder if any of you have much experience with cruise ship employees. I will have one coming it pretty soon, I have not seen the paperwork yet.
This guy told me last year he was going to do this and lead to believe thet the cruise line do not withhold FICA or Medicare Tax. According to my client he is an employee and not a subcontractor. Have any of you ever heard of this?

[Gene V]

Have no experience with cruise ship employee---here is an article from IRS web site
on tax withheld for employees of crew ships.

http://www.irs.gov/businesses/article/0,,id=181762,00.html

[LawrenceGR]

Thanks

for the article. I may be making this more than it really is. I know the guy was playing with one of the many music groups on board and it is a large cruise line so hopefully the client was misinformed.

[Gene V]

for the article. I may be making this more than it really is. I know the guy was playing with one of the many music groups on board and it is a large cruise line so hopefully the client was misinformed.

Another article on entertainers on crew ships.

http://junewalkeronline.blogspot.com/2007/10/cruise-ship-entertainer-gets-no-tax.html

[taxmandan]

Cruise ship employees have some special rules that exclude their income from US taxation. IF, employee is a foreign national, the ship does NOT dock at a US port, the ship is of foreign registry (most are), then MAYBE the income is not subject to US tax. He likely heard from other crew members that he doesn't have to pay US taxes but that's not true if he is a US citizen or resident alien. There is subject matter about it from the IRS but it's been several years since I had one and no longer have the reference.

Daniel

[LawrenceGR]

W-2's

I have the W-2's now for the cruise lines and both have witheld fed income tax bt no FICA or Medicare tax. The guy is a US citizen and wants to the right thing, I wonder if I could treat this income like untax TIPS.

[taxmandan]

Calls for more research. Don't know if cruise ship companies can opt out of Social Security system like some other entities can (State of Washington gov't employees) or not. Almost all of them are foreign flagged and owned so don't know how that affects the situation. Might be time to call one of the tax research firms and have them dig deep for possible tax anomolies that apply to cruise companies.

[outwest]

Think international waters..

as I understand it, and as noted above, worldwide income is subject to income tax. However, FICA is a different code section. My foggy memory says that the wages earned in international waters is not subject to FICA. Anyone see a lighthouse? Hear a foghorn?