When salary is used towards an EB-5 capital investment, USCIS expects more than a general claim that the investor earned a sufficient income” and “This requires a comprehensive review of W-2s, tax returns, and bank statements.
W-2 Forms and Tax Returns to Establish Consistent Gross Earnings
A W-2 form provides the official record of annual wages and tax withholdings. It can be the starting point in a salary-based source of funds analysis because it establishes the total compensation earned from employment for each tax year.
However, a W-2 does not reflect what happens after income is received. It does not show how funds were spent, saved, transferred, or invested, and therefore only confirms earnings rather than the availability of funds for EB-5 investment.
Tax returns provide further confirmation that the income has been properly reported to tax authorities and may also capture additional income such as bonuses, interest, or dividends. However, similarly, tax returns do not establish liquidity or show how much of the income remains available over time.
Together, W-2 forms and tax returns confirm earned income and reporting, but they do not demonstrate whether those earnings were saved overtime.
Bank Statements: Tracing the Actual Movement of Funds
Bank statements are one of the most important documents in establishing salary as a source of EB-5 investment capital. They show the receipt of income and how those funds were managed prior to the transfer of funds to the EB-5 project.
The analysis begins by identifying recurring direct deposits from an employer. Next step is to review spending, transfers, and savings patterns to determine how much of the salary income can reasonably be accounted for towards the current account balance. This review helps separate funds that were spent from those that were retained overtime.
The goal is to understand how earnings accumulated and how much remains traceable for the EB-5 investment.
The strength of a salary-based EB-5 source of funds case lies in traceability. USCIS is not only focused on how much was earned, but on how clearly those earnings can be followed from the investor’s bank account to the transfer of funds to the EB-5 project.
If you have questions about EB-5 sources of funds, contact Attorney Jacqueline Treviño at jtrevino@psbplaw.com.