Client worked in Afghanistan!!

[Ladynole97]

I have a client who lived/worked in Afghanistan last year. He recieved a W-2 with no w/h, FICA or Med. I can't seem to find if there are any treaties concerning this. He was basically military support staff.

Can anyone point me in the right direction?

[JON]

Lots of

questions. Was he there for a year or more 330 days for the foreign exclusion? The lack of FICA says more I think. He must have a treaty or was a resident there? It is nice if you can contact the payor. Good luck, and let us know. Supposed ly I have one returning in May from Duba(SP) after serving a year contract. A US Foreign subsidiary is giving him a W-2 supposedly does have Fica and he probably qualifies for the foreign exclsion 2006, but not 2007. Then I am told he has a resident status there. I may let someone else have that return.

[sandysea]

The w-2 issued by US govt?

The w-2...was it for military pay and issued by the US govt or a US payor? There is no tax treaty with Afghanistan and the US but military wages and active combat wages are reported differently on the US return

[Ladynole97]

Not Military

He is just military support...working on base. He was there for 1yr contract and is begining a second year contract. I thought I found a Tax treaty with afghanistan that began before 1980 but has not been revoked. Tough case...

[BP.]

Marilyn, check your TTB pp. 14-11 & 14-12, plus the instructions for Form 2555. I didn't do any in '05, but did some in '03 & '04 and I don't remember needing treaty info, but maybe I've just forgotten the details. But I believe those clients had SS/Medicare taxes w/h. Good luck with it!

[JON]

I think you

need a treaty or residency help to be exempt from FICA, but let us know. Call the employer.