Income Not Authorized For H1B Employees In USA

This is what an adsense pro has to say on his blog adsense blog.

What exactly is unauthorized income for H1B workers in USA. Is self-employment or making money on internet unauthorized income?

Are these considered as unauthorized income:

1)Lotto winnings

2)Sweepstakes winnings

3)Poker winnings

4)Stock/Commodity Investment Profits

5)Google Adsense Income

6)Affiliate Marketing Income

7)eBay Auction Income

8)Freelance Programmer Income

I don’t want to hamper my Green Card processing in any way. Is it true that I can’t file any 1099-MISC or W-2G form in my tax return. Even gambling win requires me to file one of those.

I didn’t have any income from any of these till now but came very close to claiming a Sweepstakes win. I was planning to invest in Silver. But I don’t want to create any problem so if its not allowed I will stay away from it and anything like that.

Answers/Response:

As a US resident ( which you are since you are living here and paying tax) you are allow to participate any Sweepstakes /lotto/lottery. So wining those is legal and you are subject to appropriate tax.

About eBay/Ad sense/Affiliate Marketing, they are considered as business. You are allowed to invest or start a business in USA. Again you have to follow appropriate laws and regulation. But you are not allow to work anyone (including you own business) but the company filed your H1b for. So you have to hire someone to work for your business or run eBay/ad sense.

I know some people running business (like gas station) but they are still in H1b visa even one has F1 visa. They are hiring other people to work for their business.

Well… running a business is also some types of work even you hire someone to work for you. I am not how those things work but pretty sure there is way to do legally.

If you are planning to do something like this I recommend you to consult a good immigration lawyer.

Adsense Income On H1B? Legal Or Not?

These are the excerpts from Google forums.

I'm a non-us citizen currently on a H1-b visa. I'm planning on

creating a website (personal blog or some informational site or forum)

but would like to subscribe to Google AdSense for additional income. I

realize h1-b has certian limitiations as to work (can't have my own

business etc., can only work for company that sponsors me etc.)so my

quesion is:

1. Will any income from AdSense classify my website as a "business"

that would put me out of status?

2. If not, is there a certain revenue level that determins wether or

not a website is a business?

Answers/Responses:

It will imply self-employment income and could potentially put you out of status.

As you know, an H1B visa holder may not be self-employed. It is ok to

own a business, but you may not actually do any work for the business

yourself. Now, although your website may not be a business in and by

itself, Adsense (and any Affiliate relationship) will bring in income

and therefore it is off limits to you. Google will issue you a 1099

MISC (the self-employed version of the W-2) for your Adsense income

which implies an independent contractor relationship and not employer

- employee.

AdSense Help Center

Will you send me a Form 1099 or 1042?

"Publishers are responsible for paying their own taxes resulting from

participation in Google AdSense. In order to facilitate this, we send

IRS forms 1099 and 1042-S to qualifying publishers as required by US

tax law. Forms will be sent before the end of January 2006."

Attorney Murthy : "A person on an H1B is not allowed to work on a 1099

at all. One who is on an EAD is allowed to work as an independent

contractor if s/he is the I-485 dependent on the EAD and not the

principal applicant for the GC, to be on the safe side. If the total

time working was less than 180 days, there is possible hope to obtain

the I-485 in the U.S. Otherwise, it adds complications and will not

generally allow the person to obtain an approval of the I-485 from

within the U.S. You should consult an immigration attorney to discuss

this issue since it could have serious consequences. "

"How? Google Adsense? income is business income. Since you are getting

paid via a 1099-MISC, which means Google is treating you as an

independent contractor, the U.S. Government has decided that income is

taxable. More importantly, Google will be reporting your income to the

IRS as one of their expenses..."

"Does this also apply to other income streams like Linkshare,

Commission Junction, other affiliate marketing, Yahoo Publisher

Network, Kanoodle, BlogAds, Adbrite, etc.?

"Yes. Most legit companies will send you 1099s, but some smaller ones

may need some nagging..."

Again, these are just what others have experienced and therefore need an attorneys advise before making any decisions.