While you are on an H1B visa, you can work only for your authorized employer specified on your I-129. However, there may be reasons that you want to generate additional income outside of your work. Most ways of generating additional income on an H1B visa are prohibited. However, there are a very few select ways that you can generate additional income outside of your H1B authorized job.
How can I generate other sources of income?
1. Invest in the stock market or cryptocurrency as long as you don’t do this as a job and day trade professionally. If you work for an investment bank or a consulting firm, you may have restrictions, and preclearance requirements from your compliance department.
2. Rent out a room in your home occasionally on Airbnb or equivalent or to a tenant. This is considered passive income and is permitted (and this is different from managing multiple Airbnb apartments, which would be considered productive work, which is not permitted). Rental income and losses are reported on Form 1099-MISC. Airbnb will request your social security number in order to pay you. You will not receive a tax Form 1099-MISC if your rental income does not exceed $600 but it is your responsibility to pay taxes on all of your income.
3. Rent out your car when not in use on Turo. Renting your car out on Turo is considered passive income, just like Airbnb. If you have a fleet of cars and are renting them out on Turo for a significant amount of income, that would most likely be considered unauthorized work and be prohibited. Just like Airbnb, income earned on Turo is taxable and they will collect your SSN via a Form W-9. Turo will send you a 1099-MISC form if your earnings exceed $600 per year.
4. Be an angel investor. As long as you are not materially involved in the company, you can draw passive income from investments. In order to be an angel investor, you must meet certain income restrictions. These restrictions were lowered in 2017 to permit both accredited and non-accredited investors to invest in startups. An accredited investor is someone who has an annual income over $200K per year and a net worth over $1M, excluding the primary residence. Prior to 2017, only accredited investors were permitted to be angel investors. That bar has been lowered but there are still restrictions. If you are a non-accredited investor and have an annual income or net worth of less than $100,000, then you can invest the greater of $2,000 or 5 percent of the lesser of your annual income or net worth. If you have more than $100,000, then you can invest 10 percent of the lesser of your annual income or net worth. Here’s an IRS guide about who and how you can make private investments of this nature.
5. Gamble (although we wouldn’t recommend this). Gambling and winning money through gambling is permitted for H1B visa holders. But rest assured, losing money is permitted too! Online gambling is not permitted in every state and may be illegal. Here’s an IRS publication with tips about gambling winnings and losses.
6. Opening checking accounts for incentive bonuses if you meet certain requirements. You will receive a 1099-INT Form for this because it is considered interest income. Doctor of Credit provides up to date lists of checking account bonuses. Keep in mind these checking accounts may have certain requirements in order to get the bonus (deposit quantity requirements, direct deposit requirements, etc).
If you earn any additional sources of income, you will need to pay additional income taxes. Need an experienced tax preparer who is an expert in advising visa holders? Learn more about MYRA Wealth: Tax Preparation services.
7. Carpool through an app like Waze Carpool or Scoop to get reimbursed $0.545 per mile. While not nearly as lucrative as Lyft or Uber, it is perfectly acceptable for H1B immigrant workers to use carpool apps like this and get reimbursed for their ride shares. Read more on Scoop’s blog here.
8. Gifts are permitted for those on H1B visas. In the United States, a person (regardless of where they live) can gift another person up to $15,000 of US-situs assets tax free under the “gift tax exclusion” in 2018. Non-residents must file Form 709 if they make a gift of a US situs asset that exceeds the annual gift tax exclusion. Read more here.
If you are receiving non-US-situs assets from abroad, the limits will be different (unlimited in most cases). In some cases, you will need to file Form 3520, especially if you are receiving the assets from a foreign trust or if you are receiving over $100,000. Here’s more about Form 3520, how to file it, and the penalties for not filing it.
Other Commonly Asked Questions
Can I invest in Bitcoin while I am on an H1B?
As long as it is a hobby, you can invest or day trade in Bitcoin or any other marketable securities. This is not just limited to Bitcoin, but any Cryptocurrencies, including Litecoin (LTC), Ethereum (ETH), Zcash (ZEC), Dash (DASH), Ripple (XRP), Monero (XMR), etc.
Can H1B visa holders play the Powerball or Mega Millions?
Lottery income is considered passive income so it is permitted on an H1B. You may have to pay additional taxes on winnings and you may have trouble collecting winnings without a US tax ID number. If you play the lottery and win any money, speak with an accountant and your immigration attorney before collecting it.
If I am an H1B and have a blog and it earns passive income, can I continue to earn that income or do I have to shut it down?
This is a gray area. If your blog is generating money, it may be considered to be unauthorized work and it could negatively impact your status. If USCIS investigates you, they will be focused on your intent - when you created and updated the blog, was the intent to pursue a hobby or to generate income? If you create a separate legal entity for your blog, utilize a separate bank account, set your blog up to earn income through Google Adsense or affiliate networks, they may view those behaviors as having intent to earn income. If, however, you maintain a blog and someone stumbles upon it and buys it, then that’s not intent to earn income. So broadly, if you set up or maintained a blog and demonstrated intent to generate a stream of income, it is not allowed while on an H1B visa. If you have a blog generating an income stream or if you want to start a blog that might generate income, you should speak to an immigration attorney
Can I sell my iPhone on Craigslist or Ebay if I am on an H1B visa?
This type of incidental income is generally permitted but is forbidden if it begins to be habitual or constitute a large portion of your income. Typically selling any personal asset like a home, car, or phone is considered passive, incidental income and is permitted. For example, you cannot start side hustle flipping iPhones because that is an active activity to generate income which would constitute unauthorized work.
Can I get paid to babysit for my neighbors while I am on an H1B visa?
No. Babysitting for pay is considered “unauthorized work”. However, if you’re babysitting for an immediate family member out of courtesy and they decide to gift you some money out of the kindness of their heart, and not in exchange for your specific services, then it may be permissible. The annual amount you can gift to one individual that is not subject to taxation is $15,000 in 2018. Learn more about gift taxes here.
What if I make incidental, unexpected income that requires me to complete a Form W-9 or I receive a Form 1099? Will I be penalized? Examples include: getting a referral bonus for a referral you made of a friend to work at your company, winning a cash prize through a case competition, getting paid an honorarium for an article you wrote
In general, no you will not be penalized for this type of income. But you should not be “working” to earn multiple referral bonuses or case competitions as a way to get additional income. If the award or bonus seems extraordinary, you can except USCIS to follow up and find out if it was a result of work or incidental.
Can I pursue a hobby while I am on an H1B?
Hobbies are generally permitted while on an H1B visa. The IRS considers hobbies to be activities that you engage in for sport or recreation, not for profit. Although they may be instances where you may earn occasional income from a hobby, the primary purpose of the hobby must not be to make a profit. Hobbies become prohibited while on an H1B visa when you start doing them explicitly to generate income - then they become “unauthorized work”. The IRS looks at 9 factors when determining whether something is a hobby or a business activity. Learn more here.
Can I freelance or work as an independent contractor while I am on an H1B?
No. Freelancing is considered “unauthorized work.” As an H1B visa holder, you are authorized to work only for the company on your Form I-129.
Related article: Can I Freelance While I Am On An H1B Visa?
Related article: Can I Volunteer While I Am On An H1B Visa?
Possible Consequences For Ignoring Visa Work Authorization Rules
How would I get caught for doing unauthorized employment while on an H1B?
The reality is that it may be hard for USCIS to find out about unauthorized work, but some types of unauthorized work are easier for them to find out about than others. In addition, consequences can be severe. If your unauthorized work involves W2 or 1099 income, the US government can find out about unauthorized work through your tax returns. USCIS does not have direct access to your tax returns, which are processed by the Internal Revenue Service, but they can request them. In addition, someone like a neighbor or coworker might report you to USCIS, prompting USCIS to investigate your work status and tax returns. USCIS is also within their right to request your tax documents when you apply for a green card. In addition, when applying for a green card, you may be asked to complete form G-235 which includes your employment history.
What can happen to me if I accept and perform unauthorized work while I am on an H1B?
If you accept and perform unauthorized work while on an H1B visa, you would be violating your visa status. If caught, you may be required to exit the United States and make a new entry to "reset" the I-94 term of admission. If you have engaged in unauthorized work while on an H1B visa, you should speak to an immigration attorney to discuss your options. Here is more information on the USCIS site about the barriers you can encounter when trying to adjust your status if you have performed unauthorized work.
MYRA Wealth (https://myrawealth.com/) is a Multi Family Office that provides personal finance services for Immigrants in the United States. Our services include financial planning, investment management, and tax preparation. Whatever you want out of life, we’ll help you achieve it!