Hi Everyone,
I understand this may come off a stupid question, but as a person completely is completely new to the industry, how do taxes work for Mariners? I reside in California and would like to work on a US flagged ship once I graduate from my Maritime Academy.
If Mariners do get taxed, are there any states that are tax exempt?
If I work across international waters do I still have to pay Uncle Sam?
Thanks in advance!
Yeah, youāll still be paying federal and state taxes unless you move to a state where there arenāt any. I ship deep sea, Texas, Florida, and New Hampshire seem to be popular.
Consider it like any other job in the United States. You pay taxes like everyone else. Both federal and state and most companies will not withhold your state tax for you so as a California resident you may want to sit down when you compute your taxes. You will find a lot of mariners living in states without income tax like Washington, Texas, Florida, etc. for this reason.
Yes, you will pay Federal taxes if you work for wages in the USA. But, be careful when you accept a job what you put down for your home state. Example; once I was living in Florida, a non-income tax state. Home there, FL drivers license, property tax paid there etc. But since I was not there much and no one to forward mail I put down NC as my mailing address as a friend of mine from NC was willing to send my mail to me in whatever country I may be in. After 2 years the state of NC came after me for back taxes. It seems that the company I was working for was based in Washington and employers are required to report all wages to the state where you get your pay statements sent to, NOT your legal residence. It took me a year to get the state of NC off my back. Soā¦be sure that the state you live in is the state you wish to pay taxes to.
To not pay federal taxes you have to be outside the country for more than 330 days per year.
In international waters onboard a US flag vessel is considered within the US.
Therefore, unless you live in another country and work on a foreign flag vessel then you will still owe federal taxes.
True. It used to be 270 or so days a year to be gone before you did not have to pay taxes, then they jacked it up to 330 days a year. This always annoyed me as other countries have much lower days at sea for their mariners before they are exempted from taxes.It REALLY annoys me that corporations such as Apple and Amazon pay very little if any Federal income tax on corporate income in the USA while I paid 40% of my income . I wish the average working person could get the same tax breaks as the average piece of paper [corporation] but that will never happen. The average person cannot afford to pay the bribes to make the tax law.
Back in the '70s, you had to be out of the country 17 out of 18 months with provable addresses. It was then lowered to 330 days.
Crowley withheld California taxes when I worked for them on the West Coast, even though I lived in Florida. I also had to pay some California income tax, too; since it was considered a California based job. . . . grrrrrr. . . .
Damn, you got hosed.
NCL America did the same thing with the Hawaiian MEBA ship(s). Not sure if itās the same anymore.
If you never leave the stateās waters there is a high probability state taxes maybe withheld. It is then no different than a shoreside job.
In my case the state of NC withdrew their charges against me once a US Attorney explained that mariners came under the āAmtrak Lawā which states transport workers cannot be taxed in any state but their legal residence. Since then I have had to remind 2 other companies of this law.
As long as they have regularly assigned duties in more than one state.
The portion of the Amtrak Act you are referring is as follows:
SEC. 7. RESIDENCE OF EMPLOYEES. (a) Section 11504(a) of title 49, United States Code, is amended to read as follows: ā(a) No part of the compensation paid by a rail carrier providing transportation subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title to an employee who per-forms regularly assigned duties as such an employee on a railroad in more than one State shall be subject to the income tax laws of any State or subdivision of that State, other than the State or subdivi-sion thereof of the employeeās residence.ā. 0?) Section 11504(b) of title 49, United States Code, is amended to read as follows: "(b)(1) No part of the compensation paid by a motor carrier providing transportation subject to the jurisdiction of the Commis-sion under subchapter II of chapter 105 of this title or by a motor private carrier to an employee who performs regularly assigned duties in 2 or more States as such an employee with respect to a motor vehicle shall be subject to the income tax laws of any State or subdivision of that State, other than the State or subdivision thereof of the employeeās residence.
Some guys aboard ship once tried this amtrak law and saved a ton of dough but something makes me think they got their ass in a wringer and had to pay it back. true, we were in international waters a lot with over 250 das per year but I donāt think it worked for them. Even if it did, if there is any chance it isnāt 100% I wouldnāt do it as Iāve been in trouble with the irs before and will not do it againā¦ just pay the money.
I didnāt pay taxes for a year though when I was in SW Asiaā¦ not sure it was worth it !!!
Burke, a merchant mariner, previously had pleaded guilty to six counts each of intentional evasion of Maine income tax, failure to pay Maine income tax and five counts of failure to make and file a Maine income tax return. The charges span 2008 to 2013.
The Amtrak law is settled law. As I stated before it was a US Attorney not a private attorney that straightened this out. The employers and state tax officials are the ones that do not understand the law but once educated there is no problem.
If you are a mariner and paying state income tax in a state you do not reside you are foolish. Contact your union and they should take care of this situation.
Ah yes, Maine. Figures heād register a snowmobile in Florida. As a friend of mine once said, "Maine is the Mississippi of the northeast. The major difference being the Mainers are afraid of dark people, other than that not much difference. 
To clarify, āAmtrak Reauthorization and Improvement Act of 1990ā does not apply to mariners. It applies only to rail and motor (truck) carriers.
The āAmtrakā law for mariners is 46 USC 11108. It never got a fancy name.
Yep, thatās how you do it. Come home for 30 days, file your damn taxes. The feds donāt want anything, but if you āliveā in California (and maybe other states) you have to pay the state tax. And property tax etc. Thereās nothing illegal or unethical about it, itās in the tax law as plain as day. Just be out of the US for more than 330 days of the tax year.
Itās not that easy though because working on US flag vessels in international water counts as being in the US.