The H-1B is a non-immigrant visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H). It allows U.S. employers to temporarily employ foreign workers in specialty occupations. If a foreign worker in H-1B status quits or is dismissed from the sponsoring employer, the worker must either apply for and be granted a change of status to another non-immigrant status, find another employer (subject to application for adjustment of status and/or change of visa), or leave the U.S.

The regulations define a "specialty occupation" as requiring theoretical and practical application of a body of highly specialized knowledge in a field of human endeavor[1] including but not limited to biotechnology, chemistry, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, law, accounting, business specialties, theology, and the arts, and requiring the attainment of a bachelor’s degree or its equivalent as a minimum[2] (with the exception of fashion models, who must be "of distinguished merit and ability").[3] Likewise, the foreign worker must possess at least a bachelor's degree or its equivalent and state licensure, if required to practice in that field. H-1B work-authorization is strictly limited to employment by the sponsoring employer.

Structure of the program

Duration of stay

The duration of stay is three years, extendable to six years. An exception to maximum length of stay applies in certain circumstances

  • If a visa holder has submitted an I-140 immigrant petition or a labor certification prior to their fifth year anniversary of having the H-1B visa, they are entitled to renew their H-1B visa in one-year or three-year increments until a decision has been rendered on their application for permanent residence.
  • If the visa holder has an approved I-140 immigrant petition, but is unable to initiate the final step of the green card process due to their priority date not being current, they may be entitled to a three-year extension of their H-1B visa. This exception originated with the American Competitiveness in the Twenty-First Century Act of 2000.[4]
  • The maximum duration of the H-1B visa is ten years for exceptional United States Department of Defense project related work.

H-1B holders who want to continue to work in the U.S. after six years, but who have not obtained permanent residency status, must remain outside of the U.S. for one year before reapplying for another H-1B visa. Despite a limit on length of stay, no requirement exists that the individual remain for any period in the job the visa was originally issued for. This is known as H-1B portability or transfer, provided the new employer sponsors another H-1B visa, which may or may not be subjected to the quota. Under current law, H-1B visa has no stipulated grace period in the event the employer-employee relationship ceases to exist.

Congressional yearly numerical cap and exemptions

The current law limits to 65,000 the number of foreign nationals who may be issued a visa or otherwise provided H-1B status each fiscal year (FY). Laws exempt up to 20,000 foreign nationals holding a master’s or higher degree from U.S. universities from the cap on H-1B visas. In addition, excluded from the ceiling are all H-1B non-immigrants who work at (but not necessarily for) universities, non-profit research facilities associated with universities, and government research facilities.[5] Universities can employ an unlimited number of foreign workers as cap-exempt. This also means that contractors working at but not directly employed by the institutions may be exempt from the cap as well. Free Trade Agreements carve out 1,400 H-1B1 visas for Chilean nationals and 5,400 H-1B1 visas for Singapore nationals. However, if these reserved visas are not used, then they are made available in the next fiscal year to applicants from other countries. Due to these unlimited exemptions and roll-overs, the number of H-1B visas issued each year is significantly more than the 65,000 cap, with 117,828 having been issued in FY2010, 129,552 in FY2011, and 135,991 in FY2012.[6] [7]

The United States Citizenship and Immigration Services starts accepting applications on the first business day of April for visas that count against the fiscal year starting in October. For instance, H-1B visa applications that count against the FY 2013 cap could be submitted starting from Monday, 2012 April 2. USCIS accepts H-1B visa applications no more than 6 months in advance of the requested start date.[8] Beneficiaries not subject to the annual cap are those who currently hold cap-subject H-1B status or have held cap-subject H-1B status at some point in the past six years.

Tax status of H-1B workers

The taxation of income for H-1B employees depends on whether they are categorized as either non-resident aliens or resident aliens for tax purposes. A non-resident alien for tax purposes is only taxed on income from the United States, while a resident alien for tax purposes is taxed on income from both inside and outside the United States.

The classification is determined based on the "substantial presence test": If the substantial presence test indicates that the H-1B visa holder is a resident, then income taxation is like any other U.S. person and may be filed using Form 1040 and the necessary schedules; otherwise, the visa-holder must file as a non-resident alien using tax form 1040NR or 1040NR-EZ; he or she may claim benefit from tax treaties if they exist between the United States and the visa holder's country of citizenship.

Persons in their first year in the U.S. may choose to be considered a resident for taxation purposes for the entire year, and must pay taxes on their worldwide income for that year. This "First Year Choice" is described in IRS Publication 519 and can only be made once in a person's lifetime. A spouse, regardless of visa status, must include a valid Individual Taxpayer Identification Number (ITIN) or Social Security number (SSN) on a joint tax return with the H-1B holder.

Tax filing rules for H-1B holders may be complex, depending on the individual situation. Besides consulting a professional tax preparer knowledgeable about the rules for foreigners, the IRS Publication 519, U.S. Tax Guide for Aliens, may be consulted. Apart from state and federal taxes, H-1B visa holders pay Medicare and Social Security taxes, and are eligible for Social Security benefits.

H-1B and legal immigration

Even though the H-1B visa is a non-immigrant visa, it is one of the few visa categories recognized as dual intent, meaning an H-1B holder can have legal immigration intent (apply for and obtain the green card) while still a holder of the visa. In the past the employment-based green card process used to take only a few years, less than the duration of the H-1B visa itself. However, in recent times the legal employment-based immigration process has backlogged and retrogressed to the extent that it now takes many years for guest-work visa holders from certain countries to obtain green cards. Since the duration of the H-1B visa hasn't changed, this has meant that many more H-1B visa holders must renew their visas in one or three-year increments for continued legal status while their green card application is in process.

Dependents of H-1B visa holders

H-1B visa holders can bring immediate family members (spouse and children under 21) to the U.S. under the H4 Visa category as dependents. An H4 Visa holder may remain in the US as long as the H-1B visa holder retains legal status. An H4 visa holder is not eligible to work or get a Social Security number (SSN).[9] An H4 Visa holder may attend school, get a driver's license, and open a bank account in the U.S. To claim a dependent on a tax return or file a joint tax return, the dependent must obtain an Individual Tax Identification Number (ITIN), which is only used for tax filing purposes.

new/initial H-1B visas issued by State Department through consular offices
Year H-1B H-1B1 Total
1990 794 na 794
1991 51,882 na 51,882
1992 44,290 na 44,290
1993 35,818 na 35,818
1994 42,843 na 42,843
1995 51,832 na 51,832
1996 58,327 na 58,327
1997 80,547 na 80,547
1998 91,360 na 91,360
1999 116,513 na 116,513
2000 133,290 na 133,290
2001 161,643 na 161,643
2002 118,352 na 118,352
2003 107,196 na 107,196
2004 138,965 72 139,037
2005 124,099 275 124,374
2006 135,421 440 135,861
2007 154,053 639 154,692
2008 129,464 719 130,183
2009 110,367 621 110,988
2010 117,409 419 117,828
2011 129,134 418 129,552
2012 135,530 461 135,991
2013 153,223 571 153,794