Search Help Topics:

Per the IRS Instructions for Schedule SE, page SE-2:

U.S. Citizens Employed by Foreign Governments or International Organizations

You must pay SE tax on income you earned as a U.S. citizen employed by a foreign government (or, in certain cases, by a wholly owned instrumentality of a foreign government or an international organization under the International Organizations Immunities Act) for services performed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the U.S. Virgin Islands. Report income from this employment on either Short or Long Schedule SE, line 2. If you performed services elsewhere as an employee of a foreign government or an international organization, those earnings are exempt from SE tax.

Exception—Dual citizens. A person with dual U.S.-foreign citizenship generally is considered to be a U.S. citizen for social security purposes. However, if you are a U.S. citizen and also a citizen of a country with which the United States has a bilateral social security agreement, other than Canada or Italy, your work for the government of that foreign country is always exempt from U.S. social security taxes. For further information about these agreements, see the exception shown in the next section.

After entering the Form W-2 with the amount in Box 1 for wages, follow these steps to enter the income so it is also assessed SE tax:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
  2. Click on Taxes in the Federal Quick Q&A Topics menu to expand the category, and then click Self-employment tax adjustments
  3. Click Continue or No until you reach the screen titled Self-Employment Tax - Adjustments
  4. Enter a positive adjustment for the amount of wages subject to SE tax.

This will transfer the amount to Schedule SE for purposes of calculating the self-employment tax.


Was this helpful to you?