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Posted Mon, 12 Feb 2024 11:20:40 GMT by
A UK tax resident individual did a one off job in the USA. The USA company enrolled the individual on their payroll and furnished him with Form W-2 showing deductions for Federal income tax, State income tax and Local income tax. The question is: Do all three types of tax deducted qualify for UK tax relief?
Posted Thu, 15 Feb 2024 14:33:25 GMT by HMRC Admin 5

No.  Please have a look at Article 14 of the UK / USA tax treaty (Uk/USA Double Taxation Agreement - 2002).  
It advises that certain sources of employment income are taxable only in the UK, where the work was carried out while not resident in the USA.  
If your employment income meets this criteria, then it is not taxable in the USA and you should claim the tax back from the IRS.  As the income is not taxable in the USA, no tax relief is available in the UK, when declaring it in your tax return.  Federal and State taxes are not income taxes, so do not qualify for UK tax relief.  
You will need to investigate whether as a non resident of the USA, whether you can claim the Fderal and State taxes back.

Thank you
Posted Thu, 15 Feb 2024 14:49:11 GMT by HMRC Admin 5
Hi Olga

If your mum was resident in Ukraine while in receipt of this pension and it was not taxable in Ukraine, then it is not taxable in the Uk under article 17(1)(b) of the UK/Ukraine tax treaty at Uk/USA Double Taxation Agreement - 2002.  
If it was taxable in Ukraine, then is is taxable in the UK and should be declared on a self assessment tax return.

Thank you

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