Final U.S. paycheck arrived after I entered Japan - taxable?

[trevamerocki]

I'm tried searching around for this, but couldn't find an answer. I was looking through my bank statements and noticed that my final paycheck from my U.S. job hit my bank account after arriving in Japan. Is this taxable? I assume not since the work wasn't performed while I was a Japan resident.

 

[kristhuy]

@trevamerocki

Is this taxable?

If it was a regular paycheck (e.g., monthly), then yes. Though because it was paid in exchange for work performed outside Japan, it is "foreign-source income". So if you had been in Japan for less than five years when you received it, you can avoid Japanese tax on it by making no remittances of funds to Japan in the same calendar year as the income was received.

If you can't avoid Japanese tax on it (e.g., due to having made remittances), you can claim a foreign tax credit in Japan with respect to any US tax you paid on the income, since the US has primary taxation rights with respect to that type of income, under the treaty.

 

[pete1507]

@kristhuy Keep in mind also using an American credit card counts as remittance

 

[trevamerocki]

@kristhuy Thank you!