The United States government does not exempt United Nations earnings for U.S. taxpayers from taxation. In the interest of equity, the UN General Assembly established a system of reimbursement called the Tax Equalization Fund (Tax Equalization Fund in Conference Resolution No. 1/1961), which is also called Tax Reimbursement. Further, UN agencies cannot issue/provide W2s or 1099s; nor can the UN withhold federal or state income tax from payroll.

Thus, the purpose of the tax reimbursement system is to place UN staff members subject to U.S. taxation in the position they would have been if their official emoluments were not taxed. This system is intended neither to provide a benefit, nor to place the staff member at a disadvantage.

Note: There are no “what if” scenarios in the FAO Tax Unit's calculations. That is, staffers should never provide tax returns without UN income to claim additional deductions/credits.

• Process tax reimbursement and tax advance requests from U.S. taxpayers who are staff members of FAO, IFAD, and WFP.
• Calculate the UN portion of each U.S. taxpayers’ overall income tax from filed tax returns.
• Review documentation of submitted claims and securely file/archive the completed claims.
• Revise FAO’s Administrative Circular/Guidance Note and WFP’s Administrative Directive each year based on the updated IRS and State Tax Authority Codes and UN Finance Rules. Facilitate approval for vetting and dissemination via FAO and WFP Legal divisions.
• Maintain the Tax Portal – In 2024, the Tax Unit and FAO’s IT division reprogrammed the Tax Portal to maintain a high level of security and increase user-friendliness. In March, the Tax Unit rolled out the new Tax Portal and is currently facilitating the creation of new registrants and requests.
• Provide guidance to clients on Tax Portal functionality, and the policies/procedures of the Tax Reimbursement Program.
• Review IRS and state tax authority official Notices/Letters to provide clear explanations to staff members who receive them.
• Provide reference documents and contact information on tax preparers who specialize in filing/preparing U.S. income tax returns for UN staff and consultants.
• Reconcile cash disbursements with WFP and IFAD on a monthly basis. Provide detailed reports and follow up as necessary with WFP and IFAD Focal Points.
• Provide orientation for new staff members regarding Tax Unit rules and procedures. Provide similar guidance to separating staff members.

• Fixed Term FAO/WFP/IFAD staff who are United States citizens or permanent residents (green card holders). Fixed term staff are eligible for both tax reimbursement and advances.
• Short Term FAO/WFP/IFAD staff who are United States citizens or permanent residents (green card holders). Short term staff are ONLY eligible for tax reimbursements.

If you think you are eligible for tax reimbursement, you may click this link to the tax portal and register.
Please note: the Tax Unit always checks for eligibility before providing access.

Note: Consultants and contractual personnel (PSA) are not entitled to tax reimbursement.

Eligible staff members must:

1. Provide proof of US citizenship/permanent residency status to their respective HR departments. Then, each Payroll department will send the annual and official Statement of Earnings to the Tax Unit to confirm the staffers’ eligibility, citizenship status and start date. 
2. Register in the Tax Portal by creating a login. Note: Once the staff member receives email confirmation that their Tax Portal login has been enabled, they are required to hold onto that registration for the duration of their employment at FAO. There is no need to re-register every year.
3. Create/submit the appropriate year’s tax reimbursement in the Tax Portal and upload all necessary supporting documentation.
4. Wait about 10 business days for the FAO Tax Unit to review and revert.
5. For those staffers who begin their tenure during the calendar year, the FAO Tax Unit must receive an email from their Payroll/HR department that confirms their eligibility, with their citizenship status and start date.

• Fixed Term FAO/WFP/IFAD staff who are United States citizens or permanent residents (green card holders). Fixed term staff are eligible for both tax reimbursement and advances.

If you think you are eligible for tax reimbursement, you may click this link to the tax portal and register.
Please note: the Tax Unit always checks for eligibility before providing access.

Note: Short-term staff, consultants, and contractual personnel (PSA) are not entitled to tax advances.

Eligible staff members must:

1. Provide proof of US citizenship/permanent residency status to their respective HR departments. Then, each Payroll department will send the annual and official Statement of Earnings to the Tax Unit to confirm the staffers’ eligibility, citizenship status and start date.
2. Register in the Tax Portal by creating a login. Note: Once the staff member receives email confirmation that their Tax Portal login has been enabled, they are required to hold onto that registration for the duration of their employment at FAO. There is no need to re-register every year.
3. Create/submit the appropriate year’s tax reimbursement in the Tax Portal AND upload ALL necessary supporting documentation.
4. Wait about 10 business days for the FAO Tax Unit to review and revert.
5. For those staffers who begin their tenure during the calendar year, the FAO Tax Unit must receive an email from their Payroll/HR department that confirms their eligibility, with their citizenship status and start date. Further, Payroll must provide an official Statement of Estimated Earnings so that the Tax Unit can calculate the estimate tax accurately. This Estimate Earnings Statement must be requested from Payroll. 

Note: There is no need to request this Estimate Earnings Statement unless the staff member’s income increased/decreased significantly versus prior year. Staff members are requested to contact the Tax Unit if they are unsure, as creating these Estimate Earnings Statements can create an unnecessary burden to their respective Payroll divisions if not needed.

Staffers who qualify should NOTE that there are two Options for tax advances.

Option A: per “prior year” - The tax advance will equal the actual income tax from FAO/WFP/IFAD income from the prior year.

This option works for most staff members and no Estimate Earnings statement is needed.

Option B: based on Estimate Earnings - The IRS mandates that 90% of overall estimate tax can be paid. For example, if the estimate tax for the year = $10,000 USD, then $9000 can be paid to the IRS.

This option requires an Estimate Earnings Statement. It must be chosen for staffers who are:

• Separating from FAO/WFP/IFAD during the estimate tax year OR
• Started working with FAO/WFP/IFAD during the estimate tax year (after the first week of January).

IMPORTANT: 

• The FAO Tax Unit’s policy is to pay tax advances directly to the tax authorities.
• Tax advances are LOANS from the Organization, even though the payments are directly to the tax authorities.
• The tax advances must be reconciled each year. This is done by each staff member submitting a tax reimbursement for the same tax year as the tax advance they received/requested.

For example, if a staffer received a 2023 tax advance, it is mandatory that they submit a 2023 tax reimbursement by 15 September 2024. If the staff member does not submit the tax reimbursement AND provide all supporting documentation by that date, their Organization will recover the tax advance from their salary as of October 2024.

The following documents are available to all U.S. taxpayers upon request to the FAO Tax Unit:

• 2024 FAO Guidance Note on U.S. Income Taxes/Tax Reimbursement
• 2023 WFP Administrative Directive on U.S. Income Taxes/Tax Reimbursement
• List of Supporting Documentation for Tax Reimbursements and Tax Advances
• Declaration Page for staff members requesting an income tax reimbursement/settlement
• List of CPAs/Tax Preparers who are familiar with preparing/filing for US Taxpayers/UN staff or consultants