It is well known that athletes have to travel around the world to compete. As such, they are granted a visa that accommodates their temporary stay in the U.S. Here are some of the details you need to know about P1-A visas and how tax implications affect athletes under a P1-A visa.
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P1-A Athlete Visas
What is a P1-A Visa?
A P1-A is a type of visa made for athletes, entertainers, and coaches that are entering the U.S to compete or host an event. They are typically used for the duration of time the said person is planning to stay. By default, P1-A classification grants you a maximum of 5 years of eligibility before it expires, however, this can be extended to ten years, depending on the circumstances.
What Makes You Eligible for a P1-A Visa?
There are specific rules in place for those who can receive a P1-A. The requirements are as follows:
Individual and Professional Athletes
Being an international athlete is not the only criteria you need in order to receive a P1-A. Individual athletes must be a known athlete that is highly regarded for his or her achievements in the sport. Similarly, professional athletes that play at the highest levels in a major association can also qualify for a P1-A.
Teams and Amateur play
As for amateur athletes, teams, and coaches–the team in question must also be a highly regarded team with other recognized international athletic teams also participating in the sport. Members on such teams are frequently drafted to professional teams and also based in a foreign league with at least 15 teams with a location in the U.S.
What Is the Application Process?
We strongly recommend seeking legal counsel or agency with a strong reputation for successfully processing P1-A visas. The application process begins with Form I-129, Petition for a Nonimmigrant Worker.
Can A P1 Visa Lead to A Green Card?
The P1 is given on basis of a temporary residence in the U.S. The person holding the P1 has to declare that their stay is not permanent, making it difficult to obtain a Green Card. However, there are exceptions. If the P1 holder switches to an H-1B, get married or start a family, there is a chance the holder will be granted a Green Card. Exceptions to P1 rules are sometimes made for the best foreign athletes. Please seek legal counsel for regarding P1-Visa, Green Cards and other immigration issues. MBMG, Inc. can assist with a referral to our legal team.
Tax Implications
The tax implications of a P1-A visa vary but in general you are required to pay U.S income tax on any United States sourced income. This income includes, but is not limited to, compensation for performances, the sale of merchandise, any endorsements contracted within the continental U.S., royalties and any other income earned while in the U.S on a P1-A visa.
As a non-resident or foreign athlete, you are subject to special tax and withholding regulations imposed by the Federal Government. Special withholding rules for foreign athletes are governed by Income Code 20, which can be found in Publication 515, Withholding of Tax on Non-Resident Aliens and Foreign Entities. The Central Withholding Agreement or the (CWA), a program to assist non-resident athletes and entertainers with their tax filing requirements, may also reduce the withholding requirement, provided certain requirements are met.
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Categories: Accounting, Athlete Taxes