I’m working on H1B for employer A. Employer A has contract with vendor B, vendor B has contract with Prime vendor C and prime vendor with client D. so the model is:
Me -> A -> B -> C -> D
Now, at some point last year, vendor B (middle layer) offered to pay my expenses, as I had found a better paying project. So now I receive a check every month against my expenses from vendor B in addition to my pay check from my employer.
This amount received from vendor B, against expenses does not appear on my W2. As per vendor B I’m not supposed to pay tax on this as this is against expenses.
Now, I’m confused is vendor B correct in saying that I’m not supposed to pay taxes? Would this create a problem GC filing as I’m supposed to be paid by only my employer since I’m on H1B?