My H1B visa extension is in progress and my I94 already expired . I got an RFE and USCIS is questioning the tax calculation in my payslip. My employer has calculated tax for wrong state . If my extension is denied, then what are my options ? Also if am able to transfer my H1B to a different employer, can I continue work with the new employer even though my current extension is denied?
If extension is denied, you will go out of status and will need to leave the US asap as your I-94 has already expired.
Generally you can start working for the new employer on receipt and your pending extension of status application will work to bridge the gap between expired I-94 and starting the job with new employer on the transfer receipt.
There are very less chances of your H1B transfer getting approved with I-94 if the transfer is applied after the current extension of status application is denied. If approved without I-94, you will have to go for H1B visa stamping , come back and then start working for the new employer.