US Wages Paid for Ee Working in foreign country

[austin3515]

Does anyone know if it is even appropriate for a US citizen working in a foreign country (in this case a small island nation) to receive US wages (i.e., reportable on a w-2?).

My question of course is can the employee participate in the mainland 401k plan?

[masteff]

Sure. Here are a couple articles I found touching on the topic (provided here more for illustration than for information):

http://www.bdo.com/publications/tax/seminar/Sep27-ExpatPayrollIssues.pdf

http://www.aronsoncompany.com/knowledge-center/in-the-news/item/employment-tax-withholding-and-payroll-reporting-for-us-expatriate-employees-working-in-foreign-countries

http://www.whitecase.com/hrhottopic-0412/

As for participating in the 401(k) plan, yes. For example see "cross border issues" on page 11 here: http://www.mwe.com/info/pubs/009_017_US%20employee%20benefits.pdf