Unexpected Tax Costs
Employers thinking about purchasing a Gold Card for an employee should consider tax implications and potential additional costs that might result from such purchase. As the benefit of the Gold Card is more general in nature and would enable the employee to provide services to any employer in the United States, the fee may not be excludible as a working condition fringe benefit. Consequently, the $5 million fee may potentially be taxable to the employee, if it is treated as U.S.-source taxable income. This would result in additional tax costs for the employee as well as for the employer, such as the employer’s portion of FICA taxes and, if the employer decides to equalize the employee, tax gross-ups for federal and state income taxes.
Hidden Tax Break
As stated by President Trump during the announcement, and most recently in his address to Congress on March 4, 2025, the Gold Card would provide some tax advantages that may not be available to green card holders but it is not clear what the advantages may be.
As mentioned above, during the announcement on February 25, 2025, President Trump stated that Gold Card holders, “won't have to pay any tax on income outside of the United States”, which may suggest that Gold Card holders would not be subject to U.S. income tax on worldwide income as U.S. tax residents generally are. However, in the joint address to Congress on March 4, 2025, President Trump said the, “[Gold Card] is like the green card but better and more sophisticated. And these people will have to pay tax in our country. They won’t have to pay tax from where they came.” This time a U.S. tax exemption was not mentioned, suggesting that Gold Card holders would not be subject to income tax in their home country, but would be subject to income tax in the United States similar to other U.S. tax residents. It is unclear how a tax exemption would be implemented and whether the President of the United States has the authority to create such an exemption without an act of Congress.
