Will Prince Harry have to pay taxes or get a visa while living in the US?
It has been more than a year since the Duke and Duchess of Sussex left the United Kingdom for the United States, and the couple settled in Montecito, California, in August 2020.
After a turbulent year, in which the couple drifted away from royal duties, Megan's revelation that she experienced a miscarriage in the summer of 2020, the news that the couple were expecting their second child, the death of the prince. Felipe and his explosive interview with Oprah Winfrey, Prince Harry also confirmed that he had accepted a new job.
In March it was announced that Harry had accepted the position of director of impact for mental health and coaching firm BetterUp.
As part of his role, the Duke is expected to publicly advocate for mental health issues and also participate in initiatives including product strategy decisions and charitable contributions.
"I intend to help create an impact in people's lives," he told The Wall Street Journal, which first reported the news. "Proactive coaching offers infinite possibilities for personal development, greater awareness and a better life in all aspects."
But what does this mean for his US citizenship status? Will you pay US taxes? Here is everything we know.
Will Prince Harry pay US taxes?
According to the Internal Revenue Service (IRS), the branch of the United States government that deals with taxes, the 183-day rule means that Prince Harry will be legally obligated to pay federal taxes. And California state taxes based on the "substantial presence test" after living in the country for 183 days for a consecutive three-year period.
Victor A. Jaramillo, a tax attorney at Caplin & Drysdale Attorneys, tells The Independent: “Typically, a wealthy non-American person who moves to the United States engages in pre-immigration tax planning for Make sure you are not subject to excessive taxes.
“The interesting aspect for someone like Harry is all the additional information that he must provide to the IRS. For example, if he receives distributions from a trust that he is a beneficiary of, he must disclose his interest in the trust (whether or not those distributions are taxable depends on a litany of factors).
Jaramillo added that gifts received by Prince Harry from the royal family should also be declared.
"He would also need to report the gifts he receives from his non-US relatives if those gifts exceed $ 100,000 in value," he said.
Will Prince Harry need a visa?
While a "royal source" told The Times in April 2020 that Prince Harry would not apply for a green card or US citizenship "for the foreseeable future," Harry seems increasingly established in the United States.
The options available to him could include applying for an O-1 visa. This is a non-immigrant visa for people with "extraordinary ability or achievement." Prince Harry would need to be sponsored by an organization that plans to work with him to identify how he could apply these skills in the United States.
His philanthropic activities, such as founding the Invictus Games, could make him eligible, although the O-1 visa is only valid for three years and could be renewed annually after this time.
An alternative is to simply limit the number of days you spend in the US, although as time passes and his ties to the country become more established, as evidenced by his new position at BetterUp, this could become more difficult to justify.
Dianne Mehany, a lawyer specializing in international tax planning, told Town & Country magazine: “If you try to claim it for many years in a row, at a certain point the IRS will tell you: No, you do not have a closer connection to another country, because usually you spend six months out of the year in the United States. "
She added that Prince Harry could seek a "tiebreaker" position, allowing him to extend the number of days a person is entitled to reside in the United States before having to pay taxes. However, this would also require a significant amount of paperwork, he comments: "You still have to file a large number of disclosures, disclosing your assets worldwide, disclosing your positions of trust, disclosing your controlled foreign corporations, disclosing your investment. foreign ".
Will Prince Harry just apply for American citizenship?
As time goes on, it may become more difficult for you to justify his residence in the United States without doing so.
Although a spokesperson for Prince Harry declined to comment when asked this question by The Independent, it is clear that Harry has some important decisions ahead of him.
