Receiving Money from Korea in the U.S. — Do You Owe Tax? Essential 2025 Guide for Students, Expat Professionals, and U.S. Residents

💵 Receiving Money from Korea in the U.S. — Do You Owe Tax? Essential 2025 Guide for Students, Expat Professionals, and U.S. Residents

If you live in the United States and receive money from family or relatives in Korea, you’ve probably wondered: “Is this taxable in the U.S.?”
The short answer: a simple transfer of money is not taxable income.
But depending on the amount, source, relationship, and frequency, the IRS may require disclosures such as Form 3520, FBAR, or FATCA.

1️⃣ Core Principle — A Transfer Is Not Income

When money moves from Korea to your U.S. bank account, that transfer alone is not taxable.
The IRS does not tax simple movement of your own assets or family support.
The key question is whether the money represents income or a gift.

• Korean bank account → your U.S. account = not taxable
• Parents → child studying in the U.S. = not income

So the key is why the money was sent, not the transfer itself.

2️⃣ Money from Parents/Relatives = “Gift” Under U.S. Tax Law

In the U.S., gift tax is imposed on the giver, not the receiver.
However, when the gift comes from someone outside the U.S., the IRS cannot track the giver —
so the recipient must report certain foreign gifts using Form 3520.

Key 2025 figures:

• Annual Gift Tax Exclusion (U.S. persons): $19,000
• Lifetime Gift & Estate Tax Exemption: $14.58M (2025)
• Foreign person → U.S. person: unlimited gifts (no gift tax, but reporting may apply)

Failure to file may trigger penalties up to 25% of the amount received.

3️⃣ Required IRS Filings: Form 3520 · FBAR · FATCA

✔ Form 3520 — Reporting Large Foreign Gifts

If foreign gifts exceed $100,000 per year, Form 3520 must be filed.
There is no tax — only a disclosure requirement.

✔ FBAR — Foreign Bank Accounts

If your Korean bank accounts (combined) exceed $10,000 at any point during the year,
you must file FBAR (FinCEN 114).

✔ FATCA — Form 8938

FATCA requires reporting of foreign financial assets over certain thresholds depending on filing status.

4️⃣ What Changes by Legal Status?

📘 F-1 Students

• Family support is not taxable
• Form 3520 required if gifts exceed $100,000
• May be treated as U.S. tax resident if residency rules are met

📘 H-1B, L-1, E-2 Employees

• Company stipends may be taxable compensation
• Family gifts still count toward Form 3520 thresholds

📘 Green Card Holders & U.S. Citizens

• Taxed on worldwide income
• Must report Korean bank accounts and financial assets
• Korean-earned income must be reported even if taxed in Korea

5️⃣ IRS Red Flags

• Large or recurring transfers from Korea without explanation
• Korean bank accounts not reported via FBAR
• Unreported income earned in Korea
• Attempts to disguise income as gifts (or vice versa)

6️⃣ Practical Tips for Safe & Compliant Transfers

Reference Links