L-1 Visa & US-India Taxation

Technical topics regarding tax preparation.
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13-May-2016 9:21pm
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Hello:
I’m hoping to find advice for a client who is an Indian Silicon Valley software engineer on L-1 visa.

HINT: He works for a huge company that starts with letter G , :)

Maybe one of you has seen this situations before and can offer advice.

BACKGROUND
- 2016 : Client arrived in US in October and filed as US non resident.
- 2017- Client will file as US resident. He earned close to 300 k on W-2. He tells me that his 2017 W2 included amounts paid for bonuses and stock options , and that these amounts were also taxed by India, and that India withheld the taxes on bonus and stock options at time of payment.

QUESTIONS:
That doesn’t make sense , right ?
1. A US employer doesn’t withhold foreign taxes on US wages , correct ?
2. The bonus and stock options client received , which had Indian taxes withheld , would these be part of US W2 ? Or would they be in addition to his w2 ? Perhaps delayed payments he’d received from Indian counterpart that he earned in India prior to arriving in US ?
3. As an Indian national taxed as a US resident on L-1 visa , are there any treaty articles that client can utilize to relieve paying tax for both ( DTRR) Or will he simply report worldwide income and use FTC ? I’m assuming client , who was in US for 183+ days in 2017, cannot use treaty to relieve any of his tax liability ?

Thanks !
 

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