E2 Visa Taxes: A Guide

Updated on October 12, 2023
At a Glance: An E2 visa, also known as a treaty investor visa, allows individuals who meet specific investment requirements to live and work in the U.S. It is available to nationals of certain countries with a trade treaty with the U.S. E2 visa holders can work in their investment-related business, travel freely, stay in the U.S. with unlimited extensions, and be accompanied by qualifying dependents. E2 visa holders are subject to U.S. taxes, and the amount depends on their tax status, income sources, and any applicable tax treaties. Tax specialists can help determine the tax obligations and explore international tax strategies to minimize taxes. Stilt offers personal loans to help E2 visa holders pay their taxes promptly.

Tax matters in the U.S. can become tricky, especially when you take investor visas into consideration. Do investor visa holders need to pay tax in the U.S. and what type of taxes do they need to pay? Are there any types of income that are exempt from U.S. taxation?

Here we are going to have a look at E2 visa taxes. Let us help you understand why E2 visa holders need to pay tax in the U.S. even though you aren’t a permanent resident.

What is an E2 Visa?

An E2 visa is also called a treaty investor visa. Only people who meet specific investment requirements are allowed to apply for an E2 visa. One of the requirements demands that the person must be a national from a specific group of countries who have an established trade treaty with the U.S. It is a nonimmigrant visa which allows the holder to live and work in the U.S., but they may only work in the business to which the E2 visa is connected.

Here are the characteristics associated with an E2 visa.

  • You may work in the U.S. based company in which they invested
  • You may travel freely to and from the U.S.
  • You can stay for as long as you keep to the E2 visa requirements by extending the visa with unlimited two-year extensions
  • You can be accompanied by your qualifying dependents (children under the age of 21), relatives, and spouse
  • You spouse may work and your children may enrol in schools and recognized academic institutions without the need for a student visa.

Please note, an E2 visa is not a passport. You still need to keep the passport from your country of birth up to date. You can use your E2 visa when you cross a U.S. border but you still need to produce the passport from your country of residence. Also, the E2 visa does not make you a permanent resident. It only gives you a nonimmigrant status.

Do E2 Visa Holders Have to Pay Taxes in the U.S.?

So we’ve established that an E2 treaty investor may work and live in the U.S. when they keep to visa conditions. But do E2 visa holders need to pay tax? The short answer is yes. E2 visa taxes are required by the IRS (Internal Revenue Service) on all qualifying income. The degree to which you pay tax is determined by your tax status, however. Remember, your tax status only has relevance when it comes to your tax matters. It does not affect your immigration status.

When it comes to your tax status, there are two types of people we need to distinguish between – a resident alien and a non-resident alien (for tax purposes). The IRS uses something called the substantial presence test to determine your tax status.

Substantial Presence Test

The substantial presence test has some intricacies on how to determine your tax status. It comes down to a basic question, though. Have you spent enough time in the U.S. in the past 3 years to be considered a resident alien? If not, you’ll be classified as a non-resident alien for tax purposes.

You can research the rules on the IRS website to see how they determine your alien tax status. But for now, you’ll need to know the following.

  • Resident aliens – Pay tax in the U.S. on all their income (internationally).
  • Non-resident aliens – Pay tax on their U.S. based income.

You can always contact a tax specialist to help you determine your tax status. It is important to know your status as your status determines the extent to which you need to pay E2 visa taxes in the U.S.

E2 Visa Taxes in the U.S.

The actual amount of tax you pay on your income depends on a variety of factors. Let’s take a look in more detail.

Tax Treaties

Certain countries have tax treaties with the U.S. which affects the rate at which its residents pay E2 visa taxes. Those rates could possibly be lower than the normal U.S. tax rate because of the agreement established between the two governments.

Source of Income

As explained above, the source of your income has an effect on whether it is taxed, depending on your tax status. This is because resident aliens pay taxes in the U.S. on all their income, where non-resident aliens may have some of their sources of income exempted from U.S. taxes (if originates from abroad).

International Tax Strategies

There are also many international tax strategies you can apply to lower your taxes. By being smart and knowing the tax laws you can save lots of money. These methods are completely legal and you don’t have to worry about being unethical. Tax consultants would be able to advise you about the best way to structure your business and income sources to lower your taxes.

It is impossible to say at what rate you’ll be taxed without knowing the exact details of your travel itinerary and immigration status. So to have more certainty, we strongly advise you to consult a tax specialist.

Stilt Loans to Pay E2 Visa Taxes

Let’s face it, you don’t want to violate the conditions of your E2 visa. You probably have a great business going here and want to grow it into something significant. So, what do you do when you need to pay your taxes but you don’t have the cash? The IRS doesn’t wait for payment, and if you don’t pay on time they simply penalize you with expensive fees. What can you do?

Have you thought of a personal loan for E2 visa taxes? Stilt offers a great personal loan option. You can borrow up to $25,000 starting at an APR of 7,99%. Make sure you comply with the simple eligibility criteria and apply to see what loan you can get. Visa holders are welcome to apply for a personal loan with Stilt (Even E5 visa holders).

This is how it works.

1. Submit an Application

Apply online for the loan amount you need. Submit your best possible application to get the best possible loan offer.

2. Receive an Offer

Stilt will contact you within 24 hours of your application. Please supply any additional information if requested. Soon you’ll get your loan offer and a promissory note. Please sign and return that note if you want to accept the loan.

3. Start Making Payments

The loan should be disbursed into your U.S. bank account within 2-3 business days. Set up your repayment method online. An autopay option will help you pay on time every month.

It’s that easy! Now you can go pay your taxes before the IRS can trouble you with expensive penalty fees.

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People living and working in the U.S. need to pay taxes on their qualifying income. That means nonimmigrants too! Residents from foreign countries aren’t automatically exempt from paying tax. You need to use the substantial presence test to determine your tax status. Your tax status and other factors like U.S. tax treaties with your home country all determine the rate at which you are taxed. Know your status and consult a registered U.S. tax specialist if you are unsure about how to file your taxes.

And if you don’t have the cash to pay your taxes, Stilt is here to help. You don’t have to suffer because of tax penalties for late payments. You can take a loan to pay your taxes on time. Apply for your loan for E2 visa taxes today. Even visa holders can be eligible for a loan with Stilt.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.