With the assistant of a very accommodating individual in DC (thanks T) this is what I have learned about the recently passed legislation that prevents companies like KBR from forming offshore shell subsidiaries in an effort to cheat it’s employees and the US Government out of millions and millions of dollars in Social Security and Medicare taxes.
The legislation is H.R. 6081: Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act of 2008) See Links below.
WARNING! Reading this legislation may make you drowsy. Do not read while driving or operating machining. Reading this may make you feel stupid. If any of these symptoms persist contact a tax attorney immediately.
Consequently….I have a call in to my tax attorney!!! Doh…..
http://www.govtrack.us/congress/bill.xpd?bill=h110-6081(Overview)
http://www.govtrack.us/congress/billtext.xpd?bill=h110-6081 (Full Text)
TITLE III–REVENUE PROVISIONS is what applies to us…..Expats.
The bill was introduced May 16, 2008. It was Introduced, Passed by the House, Pass by the Senate and signed by the President in a month. WOW!! The President signed it into law on June 17, 2008. It went into affect 30 day later…July 17, 2008.
So….here are my questions.
1. Are all the current employees working for KBR/SEII in Iraq grandfathered or is KBR/SEII now paying payroll taxes on them?
2. Did the expats loose their tax-free status on the first $84K?
3. If so, do the third country nationals such as employees from the Balkins (ie, Bosnia & Croatia) have to pay taxes to the US Government.?
4. Does this apply to ALL US Government contractors overseas?
I welcome answers to these questions. If you can find out the answers please let me know so I can pass it on. Current KBR employees help me out here. What are they telling you?
Ms Sparky
This what I understand. Social Security and Medicare are being taken out of your checks. But….you still have the tax free status if you stay out of country 330/365.
It that correct?