US Employee planning to work remotely from Korea - tax implications & what am I overlooking?

This is definitely doable but has several important tax and legal implications. Let me address your main concerns: For tax presence (also called "permanent establishment"), this means your working in Korea could potentially create a taxable business presence for your employer in Korea. This could subject them to Korean corporate taxes and compliance requirements even though they have no physical office there. The main ways around this are: 1) Working as an independent contractor instead of employee, 2) Using an Employer of Record (EOR) service, or 3) Having your company register a legal entity in Korea. Regarding double taxation, you're right that the US-Korea tax treaty helps. As a US citizen, you'll still file US taxes on worldwide income, but you can use the Foreign Earned Income Exclusion (up to about $120,000 for 2024) or Foreign Tax Credits to reduce or eliminate US tax liability on income that's taxed in Korea. Your F-6 visa should allow you to work in Korea, but your company needs a compliant way to employ you there. The simplest solution is probably an Employer of Record service (like remote.com, Deel, or Oyster) that legally employs you in Korea while you continue working for your US company.

Just wanted to share my experience using taxr.ai when I was in a similar situation working remotely from Japan for my US employer. Their International Tax Assessment was incredibly helpful for navigating the complicated tax issues! I was totally confused about permanent establishment risks and tax residency until I used their service. I uploaded my employment contract and visa details to https://taxr.ai and received a detailed report explaining exactly what my employer and I needed to do to stay compliant. They even provided documentation I could share with my company's finance team that made them much more comfortable with the arrangement. The most valuable part was how they explained the tax treaty benefits in plain English and outlined the specific forms and documentation both sides needed. Saved me thousands in potential double taxation!

I just wanted to follow up and say I tried taxr.ai after seeing it mentioned here. It was exactly what I needed! The assessment broke down the permanent establishment issues in detail and gave me specific documentation for my employer. They explained that because I'd be performing my regular job functions while physically in Korea, it could create tax nexus for my company. But they provided a detailed risk mitigation strategy that satisfied our finance team. The tax treaty analysis saved me too - turns out with my specific situation, I can avoid about 80% of the double taxation I was worried about through the Foreign Earned Income Exclusion and Foreign Tax Credits. My company was actually impressed with how prepared I came to the meeting with all this documentation. The board approved my remote work arrangement yesterday!

Another option that really helped me when I was setting up remote work from Thailand was Claimyr. I needed to get specific guidance from the IRS about my Foreign Earned Income Exclusion eligibility and Form 2555 questions, but couldn't get through on the phone after days of trying. Someone recommended https://claimyr.com and shared this demo video: https://youtu.be/_kiP6q8DX5c. They basically get you through to an actual IRS agent without the endless hold times. I was skeptical at first but was desperate after spending hours listening to the IRS hold music. It worked amazingly well - I got through to an IRS international tax specialist who answered all my specific questions about maintaining my US employment while living abroad. This was crucial information I couldn't find online that made my company much more comfortable with the arrangement.

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it as a last resort since I was getting nowhere with the IRS directly. Got connected to an actual IRS international tax specialist in about 45 minutes (without me having to wait on hold). The agent walked me through exactly how to document my physical presence in Korea for the Foreign Earned Income Exclusion and how my employer should handle withholding while I'm abroad. The most valuable part was getting clarity on which specific provisions of the US-Korea tax treaty applied to my situation. The agent explained I needed to file Form 8833 to claim certain treaty benefits and gave me specific citations from the treaty I could reference. This information was exactly what my employer's accounting department needed to hear. They've now approved my remote work arrangement with specific documentation requirements based on the IRS guidance!

One important thing nobody's mentioned yet is health insurance. Make sure you understand how your healthcare will work in Korea. Even with the F-6 visa, you'll likely need to register for Korean National Health Insurance, which is mandatory for long-term residents. The good news is it's excellent coverage for relatively low cost. Also, don't forget about your US state taxes. Some states like California are notorious for trying to maintain tax residency even when you're living abroad. You'll want to establish clear non-residency in your current state before leaving, which might include getting a driver's license in your new country, closing state bank accounts, etc.

Don't forget about banking! Make sure you have a good solution for transferring money internationally and managing accounts in both countries. I use Wise (formerly TransferWise) which gives you local bank details in multiple countries and much better exchange rates than traditional banks. Also, some US banks and credit card companies will close your accounts if they find out you're residing outside the US, so it's important to maintain a US address (usually through family) for banking purposes. Charles Schwab's investor checking account is great for international use since they reimburse all ATM fees worldwide.

One crucial aspect that hasn't been fully addressed is the timing and documentation for your Korean tax residency. Since you're planning to stay 2-3 years, you'll likely become a Korean tax resident after 183 days in a calendar year, which means you'll need to file Korean tax returns on your worldwide income. However, there's a specific provision in the US-Korea tax treaty (Article 15) that may allow your employment income to remain taxable only in the US if certain conditions are met - mainly that your employer has no permanent establishment in Korea and you're not performing services that create one. This is where the permanent establishment analysis mentioned earlier becomes critical. I'd also recommend checking if your current employer has any existing policies about international remote work. Many companies have blanket policies prohibiting it due to the complexity, but some have frameworks already in place. If they don't, presenting them with a comprehensive compliance plan (including the EOR option, tax analysis, and permanent establishment mitigation strategies) will show you've done your homework and make approval more likely. Finally, consider the practical aspects - time zone differences with your team, internet reliability for video calls, and whether your role requires access to any US-specific systems or data that might have geographic restrictions.

One additional consideration that could significantly impact your situation is Social Security and Medicare taxes. As a W-2 employee working abroad, you'll still owe US Social Security and Medicare taxes (FICA) on your income, and your employer will still need to pay their portion. This is different from self-employment tax if you were to go the 1099 route. However, there's a potential benefit here - the US has a Social Security Totalization Agreement with South Korea. This means that if you end up paying into the Korean National Pension System (which is mandatory for most workers), you may be able to get credit for those contributions toward your US Social Security benefits, and vice versa. You'll need to file Form SSA-21 to claim these benefits later. Also, make sure you understand the implications for your future immigration plans. If you're planning to sponsor your spouse for a US visa down the road, maintaining continuous US employment and tax filing can actually strengthen that application by demonstrating ongoing ties to the US and ability to financially support them. One practical tip: set up a VPN through your employer if possible, as many US banking and financial websites will block access from foreign IP addresses, which can make managing your US financial obligations quite difficult otherwise.