Given the public curiosity surrounding Prince Harry’s visa status in the United States, we have asked Clayton Cartwright, expert on US tax and expatriates, to help us learn more about why Prince Harry may have opted to live on a diplomatic visa used for royal families - from a US tax perspective. Many thanks to Clayton for joining us on the blog for a guest interview.
What visa do you think that Prince Harry is on, given tax considerations for him and his visa options?
Clayton Cartwright: I have been thinking for the last four years, since Prince Harry and Meghan Markle moved to the United States that Prince Harry would have chosen to remain in the status that he likely held for shorter visits to the United States. This would be the A-1 Head of State visa status, which is used not only for Heads of State, but also for royal families.
Why would Prince Harry choose this visa status over any other?
Clayton Cartwright: Most visa statuses leave the holder “US tax resident” once the foreign national accrues 183 days in the United States during a calendar year, in absence of a tax treaty. US tax residents, like US citizens, must report their worldwide income on a US income tax return. Diplomatic visas, like the A-1 Head of State visa, convey relief from counting days inside the United States. The US has a foreign policy interest in not triggering US tax residency for diplomats. It is good diplomatic practice. Thus Prince Harry, if he is on an A-1 Head of State visa, will remain US tax nonresident regardless of his presence in the United States.
What is the significance of Prince Harry’s remaining US tax nonresident?
Clayton Cartwright: He will not have to report the foreign accounts he owns, or on which he is a signatory, each year to the US Treasury, as US citizens and US tax residents are required to so using the Report of Foreign Bank and Financial Accounts (FBAR). It keeps private to Great Britain not just the foreign assets Prince Harry owns, but also other assets of the royal family on which he is listed.
Will Prince Harry need to report any income on a US tax return?
Clayton Cartwright: Yes, Prince Harry will need to report his US-sourced income, but not income earned outside the United States. This is reported on Form 1099-NR. As a prime example, he will report income from his work earned in the United States with Netflix.
Will any US source income be tax exempt?
Clayton Cartwright: If Prince Harry is doing any work for the British government or the royal family, that might be considered compensation commensurate with his official duties. This US source income is unique and may not be a factor for Prince Harry, but it would be tax exempt.
Are there any tax-related downsides to Prince Harry not taking US lawful permanent residence based on his marriage to a US citizen?
Clayton Cartwright: Prince Harry will not be able to file jointly with his spouse and take advantage of married filing jointly tax rate brackets, which is a key benefit of lower and middle class married couples. Saying that, the 37 percent federal tax bracket applies to all taxpayers with income over $731,200 (2024).
Chavin Immigration: In terms of the immigration benefit downsides, Prince Harry will not be able to vote in the United States without taking a path to US citizenship. The A-1 visa is not lawful permanent residence, and without LPR status, there is no path to US citizenship for him.
This has been a great discussion of the hypothetical visa that Prince Harry resides on in the United States and the tax considerations. Thank you so much for joining us as a guest on the blog, Clayton!