Do I file in both US and Germany?
Usually yes, at least for the transition year. Equity granted in one country and vested in the other is split by workdays; pension arrangements need characterising under the specific articles.
Which return do you prepare first?
Whichever one the credit depends on. Preparing them in the wrong order is the most common reason a credit is claimed in the wrong place, and it is also the most common reason a client ends up paying twice and reclaiming later.
Does the treaty mean I only file once?
No. A treaty allocates the tax; it does not consolidate the filing. Both obligations survive, and in some cases the treaty position itself has to be disclosed on a return before it can be relied on.
What about sub-national tax — states and provinces?
They set their own residency and sourcing rules and are not bound by the federal treaty in the same way. A position that is protected federally can still produce a state or provincial return, which is the single most common surprise in this corridor.
Can you work with my adviser in the other country?
That is how most corridor engagements run. They keep their side, we take ours and the interaction between the two, and the scope boundary is agreed in writing so nothing is duplicated or dropped.
What if I am behind in one country and current in the other?
That is the usual pattern. We map the unfiled years first and check which catch-up routes are open before anything is filed, because the route chosen for one year affects the relief available for the rest.
How is equity split between the US and Germany when it vests?
By workdays. Equity granted in one country and vesting in the other is attributed to the period between grant and vest, and that period is divided according to where the work was actually performed. So the split is a question of records — travel calendars, assignment dates and payroll periods, not the address on the grant letter. Each country then taxes its share and relief is claimed for the overlap. The usual failure here is evidential: a split that cannot be supported by a day count is the one that comes apart when either revenue authority asks how it was arrived at.
What are all the deductions on my German payslip?
German employment tax is administered through the payroll, and the payslip reflects several distinct elements — among them the tax class applied to you and, where it applies, church tax. They are not all the same kind of charge. That matters because a relief claim at home cannot simply take the total deducted: each element has to be characterised first, and only those that qualify can be used. Characterising a payslip properly is usually the first hour of work on a German assignment file, and it is the step most often skipped.
Is everything deducted in Germany creditable on my US return?
No, and that is where most assignment files go wrong. The German payroll shows several deductions of different character, and a home-country relief claim has to characterise each one before it can use it. Taking the total from the payslip and claiming it produces a figure that cannot be reconciled to anything if it is ever examined. We work from the annual payroll statement, identify what each line is, and build the claim from the elements that qualify, keeping the working so that the figure can be explained rather than merely asserted.
How is my German pension treated once I am back in the US?
It depends on what the arrangement actually is. Pension provision in this corridor takes several forms — state, occupational and private — and the treaty deals with them under specific articles rather than as a single category. So characterisation comes before computation: identify the arrangement, match it to the article that governs it, and then decide which country may tax the payments and what relief is available in the other. Contributions made during the assignment raise their own question, separately from what happens when the pension is eventually drawn.
Which country taxes a bonus paid after my assignment ended?
Usually both, in proportion. A bonus paid after an assignment ends generally relates to a period of work rather than to the date it lands, so it is attributed across that period and split by where the work was done. The payment date tells you when it is reported; it does not decide whose share it is. Keeping the assignment dates and workday records for the period the bonus relates to is what makes the split defensible, and those are the hardest records to reconstruct once the assignment is over and the employer has moved on.
Do I file in both countries during a long German assignment?
Often yes, and the order matters. The residence position is settled under each country's domestic rules and then, where both countries claim you, under the treaty — before either return is prepared. Only after that is the income allocated and the relief claim built. US citizens file at home wherever they live, so the question is not whether to file but what belongs in each return and which country's tax the other gives credit for. Getting that order wrong means preparing returns twice, which is the usual reason an assignment file becomes expensive.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
Do I get credit for all of the foreign tax I paid?
Only up to your own country's tax on that same income, and only for tax you were legally obliged to pay. Two consequences follow. Living somewhere that taxes you more heavily than your residence country does leaves an excess that becomes a carryover rather than a refund. And withholding suffered above the treaty rate is not creditable — the route back to that money is a refund claim in the country that took it. See claiming the credit.
