Federal Income Tax

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#1
SE Tennessee
70 Posts
Joined Sep 2007
Does the crew members on cruise ships not registered in the US pay any income tax and is so to whom?
#2
more or less in TX
10,418 Posts
Joined Jul 2006
Cruise ship employees are paid while the ship is at sea and pay no US taxes. Of course they get no Social Security or Medicare when that time comes.

Crew, officers, cooks, dancers and even the doc gets paid at sea.
#3
Greenville, SC, USA
51,207 Posts
Joined Apr 2000
Originally posted by TNSTUD
Does the crew members on cruise ships not registered in the US pay any income tax and is so to whom?
Assuming they are not US citizens, they owe no tax to the US. Whether they pay to their home country would depend on its laws.
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Paul
#4
SE Tennessee
70 Posts
Joined Sep 2007
Originally posted by paul929207
Assuming they are not US citizens, they owe no tax to the US. Whether they pay to their home country would depend on its laws.
Even if they were US citizens how could they owe US taxes when they are working not in the US?
#5
Greenville, SC, USA
51,207 Posts
Joined Apr 2000
Originally posted by TNSTUD
Even if they were US citizens how could they owe US taxes when they are working not in the US?
It does not matter where the income is earned, if you are a US citizen, you owe taxes on the income. Nw, there may be no way for the government to find out about the income, but legally, it is taxable.
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Paul
#6
Fredericksburg, va. USA
80,481 Posts
Joined May 2001
Why is it important to know that? They are not US citizens, and don't pay taxes to the United States--the ship isn't registered to the US, either....they don't pay taxes and are not bound by our laws.
#7
989 Posts
Joined Jun 2006
I was reading a story about that awhile back. There are US citizens who have lived overseas for decades and they have to pay Federal Taxes, plus the taxes in the country they live in now.
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Michael

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#8
Pismo Beach, CA
1,702 Posts
Joined Jan 2008
Originally posted by TNSTUD
Even if they were US citizens how could they owe US taxes when they are working not in the US?
US citizens are required to pay US income taxes on their worldwide income regardless of where they live. (Most other countries with an income tax are not so grabby.) That said, they are probably entitled to claim a "foreign tax credit" for income taxes paid to other countries (thereby minimizing double taxation) and they MIGHT be entitled to claim a "foreign earned income exclusion" with respect to a certain amount of job earnings in foreign countries (although I am not sure whether working on a foreign flagged cruise ship would qualify for that).
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#9
10,074 Posts
Joined May 2008
Originally posted by TNSTUD
Does the crew members on cruise ships not registered in the US pay any income tax and is so to whom?
Nope. Cruise ships are not registered in the U.S. and are therefore exempt from U.S. taxes and all Labor laws, including minimum wage, and other laws of the U.S. They are, however, subject to the laws and tax codes of the country in which they are registered.

I don't think Liberia, Panama, Bahamas and others care much.....
#10
New York, NY
21,021 Posts
Joined Aug 2003
Originally posted by G'ma
Nope. Cruise ships are not registered in the U.S. and are therefore exempt from U.S. taxes and all Labor laws, including minimum wage, and other laws of the U.S. They are, however, subject to the laws and tax codes of the country in which they are registered.

I don't think Liberia, Panama, Bahamas and others care much.....

Its true Cruise lines don't pay taxes on ships registered outside the US but US companies do pay taxes on all income earned anywhere unless there is an exclusion or they pay taxes elsewhere. They do pay registration fees there. Also foreign flagged cruise ships are not exempt from all US laws for instance the US disability law DOES apply to ships that call on the US and must obey coast guards rules and health laws. Don't believe me....its in this case against NCL....

http://caselaw.lp.findlaw.com/script...&invol=03-1388

oh and the cruise lines have to pay taxes on the income they earn on Casino's when in Alaska waters....
#11
Greenville, SC, USA
51,207 Posts
Joined Apr 2000
The employees on cruise ships are not liable for US income taxes unless they are citizens of the US.

Passengers, who are US citizens, owe taxes on winning from things like bingo and the casino.
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Paul
#12
5,776 Posts
Joined Jun 2005
i did have a conversation with one of the australian dealers and they are supposed to claim their income when they come home or something but now that tips are on your s&s card in a lot of cases, it's a record of what they are earning.
#13
Shanghai, PRC / Sete, France
3,835 Posts
Joined Jun 2002
Don't forget that any non-US Citizen who holds a US Green Card must pay US Income Taxes on money he earns anywhere on Earth. Most ship's crew do NOT want a US Green Card.

US Citizens who live permanently outside the USA are not taxed on their first $85,000 or so of income - regardless of where it is paid. But they must still file a US Tax Return every year.
#15
Greenville, SC, USA
51,207 Posts
Joined Apr 2000
Originally posted by Shorex
If this topic is interesting to you, and you have NOTHING else to do today, here is some extra credit reading:

Individual Foreign Earned Income/Foreign Tax Credit - IRS Statistics

Tax Topic 856 - Foreign Tax Credit


Foreign Tax Credit - Choosing to take Credit or Deduction

There will be a pop quiz on Monday.
At least I have a week to study (or come up with an excuse to stay home sick).
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Paul
#17
Illinois
440 Posts
Joined Aug 2006
I think I am having a bad dream...I come to this site to read up on cruise stuff, give myself a little bit more to think about & look forward to for our next cruise, and to have a brief respite from work (I am a CPA)...and, POW, income taxes comes up! eek! somebody please wake me!

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#18
The Big Easy
18,326 Posts
Joined Oct 2006
Originally posted by paul929207
Passengers, who are US citizens, owe taxes on winning from things like bingo and the casino.
Are you sure about that?

It is my understanding that cruise ship winnings under $10,000 are not taxable.
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Paul
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#19
Greenville, SC, USA
51,207 Posts
Joined Apr 2000
It is my understanding that there is no difference between a cruise ship casino & a vegas casino, except for the fact that you get a 1099 from Vegas, but not from a ship. However, I could be mistaken. I have not had the problem trying to decide how much of my winnings to report.
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Paul
#20
New York, NY
21,021 Posts
Joined Aug 2003
Originally posted by Aquahound
Are you sure about that?

It is my understanding that cruise ship winnings under $10,000 are not taxable.
nope that is wrong. All winnings are taxable. The issue is whether the cruise line reports them or not. But tax advice on here is about as accurate as medical advice.....