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Hi Peter,

I have heard different answers to this from different people. Can I earn income from apps on apple store/android etc. if I am on a work permit in the USA? Does it matter if the app was initially launched when I was in India (my home country) or after I moved here?

Thanks!




You will get deported and effectively be permanently banned if you receive income from any other source besides your H-1B / L-1 / other-visa sponsoring company/employer. Income from all other sources are prohibited while you are on a visa. With a green card or U.S. citizenship, you have the freedom to sell apps, write books, etc.

Companies are required to report any income you earn while you are in the US. If you make money selling apps, Google/Apple is required to tell the U.S. government about the money you make on the App Store income (primarily for tax purposes).[1] The tax people (the IRS, Income Revenue Service) share income data with the immigration agency. The immigration agency checks to make sure you only got money from the company your visa allows you to work for. If the immigration agency finds out you have income from other sources (app store), they will deport you, and you will effectively be banned. See: http://www.murthy.com/2014/01/28/home-based-businesses-inadv...

If you look at the link above, you'll see a lot of people have inadvertently screwed over by having non-authorized income. An extreme example from the link above are multi-level marketing companies. For example, you recommend your friend that he/she buys some product. Your friend buys it, and for the referral, the company gives you a tiny amount of money (e.g. $5) You could get deported and banned because of this. Because it is considered income, and all income not from your job associated with your visa is completely prohibited.

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Now you might be wondering if you can set up your company and receive income from the App Store in India, and have it deposited to your Indian bank account. You might be thinking that if you do that, your income likely won't be reported to the US government, and you won't get caught and get deported.

The problem with that is that by having un-reported income in India (from the App Store) you are breaking two sets of laws: (1) tax laws, (2) immigration laws.

Firstly, if you live in the U.S., you have to pay taxes (~35%) on your total worldwide income -- income that you make in every country. Even on the interest you receive in a bank account in a foreign country. If you do not report your non-U.S. income, you break tax law. The punishment for breaking tax laws is severe. In addition to being deported and banned, they can take money out of your bank account, seize your property (your house, your car, etc) to pay for the unpaid taxes + the severe fines for hiding and not paying taxes.

Secondly, U.S. immigration law generally prohibits H-1B, L-1 and other visa holders from doing any kind of productive work outside their H-1B/other-visa job. Even repairing your own house by yourself, if it involves a lot of work, is illegal for a visa holder. You have to hire a U.S. worker to repair your house. Foreign income for remote work is prohibited. Working on your own app and making money selling it is prohibited.

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[1] I don't know if you are in the U.S. -- so just to clarify: everyone in the U.S. who has permission to work (citizens, LPRs, H-1B/L-1/etc visa holders) is issued a Social Security Number ("SSN"). This number is used to report any income you earn to the government. You have to provide this number to receive income from any company in the US. If you try to set up a U.S. Google App Store account, they will ask for your SSN. Your SSN is used to report your income to the government, and as a general universal personal identification number.


Thanks. That is ridiculous though. I believe I can earn rental income from my property in India. How is app-store income different, say if I register my app in India?


This has to do with "passive income".

What is prohibited is working[1], not income[2] per se.

You have to report rental income when you file your U.S. taxes. Work visa holders are allowed to have rental income, but that income has to be passive. I can buy a house in the US, and rent it out, but I cannot manage the property -- I have to hire a property manager. If a pipe breaks in the house, I am not allowed to fix that pipe myself -- I must pay a U.S. citizen or green card holder to fix it.

The same rules apply for apps and other sources of passive income. If you do zero work on your app while you are in the U.S. (not make any updates to it, etc), you might be able to pass it off as "passive income". But like kspaans you absolutely need to hire a lawyer.

[1] Working for free is illegal as well. If you do something that is normally paid, for free, you will get deported and banned. (As some foreign students who do this for experience sadly find out.)

[2] Having any income reported to the U.S. government with your Social Security Number (SSN) by any company that is not your visa-sponsoring company puts you on a road to getting deported and banned.


> [1] Working for free is illegal as well. If you do something that is normally paid, for free, you will get deported and banned. (As some foreign students who do this for experience sadly find out.)

Whoa, wait a second. What about open-source contributions? Are they banned as well? Open-source work can be, but is not "normally" paid though.


If the work is normally unpaid (like contributing to open-source projects), then it's fine.

Quoting from http://www.cilawgroup.com/news/2013/10/15/unpaid-volunteer-w... :

"As a general rule of thumb, one should look at whether Americans would perform the same job without pay and under similar circumstances and if the answer is “yes,” then a foreign national in an employment-restricted status can volunteer and work without pay."


Thanks for the answer winter_blue. Very helpful!


The advice I've heard is that you can do this, but you MUST lawyer/accountant up. My understanding is that it is reasonable for you to have foreign, pre-existing income, but you need the experts to file the right paperwork for the IRS to see it as reasonable. Just like your rental income, except more complicated to report properly.


Is this true? I know that as a US Citizen I'm required to pay taxes on worldwide income; but any lawful resident of the USA has the same burden? I'm a little skeptical that someone not on a permanent immigration path would be subject to this, but I'm neither an attorney nor an accountant so...


Yes; in addition you might want to ask your accountant about FBAR and FATCA reporting requirements. Those usually kick in if the sum of maximum balances of your foreign holdings over the year exceeds 10k (including retirement and market accounts, and yes, this does apply if you move one dollar between ten thousand accounts over the course of the tax year).

Edit to add: As a US citizen you are required to pay taxes on worldwide income even while not living in the US. As a US tax resident, you are required to pay taxes on worldwide income only as long as you remain a US tax resident, i.e. you file a US tax return.


Thanks for all the valuable information, winter_blue. But, (like open-source contributions, I guess) what about volunteer work?


Thanks a lot for this answer, very helpful!

What about side projects that you're not earning money on? What if they are later used for a startup once you have a greencard? What if they are published for free on some sort of market place?

Again, thanks a lot!




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