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  • Zakat And Tax Returns In USA

    Posted by Sehrish Jawaid on April 13, 2023 at 8:49 am

    Asalam Alikum,

    I have been living in the USA for almost 10 years, and I didn’t pay Zakat not even once. Now I want to calculate zakat for 10 years and pay. I was listing to sir Ghamdi’s lecture about how to pay zakat in the USA. He said that we don’t have to pay if we are paying Taxes here. My question is that I don’t pay tax in the end of the year because my income is not that much and I get a refund in the end of the year, can I count my monthly or weekly pay deductions for zakat?

    When you said that we can count our tax for zakat which tax you were talking about? The one people pay in the end of the year after filing the tax return or the tax we pay each month or week from our pay?

    As much as I have learned about zakat is that we have to pay at once after having a saved up amount for a year. Then how can I count my monthly tax deduction for zakat because we are paying it all year round?

    Please advise me what should I do?

    Thank you for your time and consideration

    Jawaid Iqbal

    Umer replied 7 months, 3 weeks ago 2 Members · 1 Reply
  • 1 Reply
  • Zakat And Tax Returns In USA

    Umer updated 7 months, 3 weeks ago 2 Members · 1 Reply
  • Umer

    Moderator April 13, 2023 at 4:14 pm

    Yes, taxes paid to the government can be adjusted against Zakat obligation. Government taxes include all forms of actual taxes levied by the government including but not limited to, incomes tax, sales tax, property tax, wealth tax etc. (Please see: Discussion 81522 • Reply 81610)

    For Example:

    You received Salary of $100 every month for 12 months = $1200 yearly, the zakat due on this is $10 per monthly salary or $120 Yearly (assuming that total yearly Salary is above Nisab because amount of production/earning/wealth below Nisab is exempt from Zakat). You paid $150 in government taxes related to Salary for the whole year.

    Now come year-end (which is one date in the year fixed by you for calculation of Zakat on wealth), your Zakat on wealth comes out to be $200. You paid other government taxes of $200 throughout the year.

    Your gross Zakat obligation = 120+200 = $320

    Total paid in taxes= 150+200 = $350

    Net Zakat obligation = 320-350 = negative $30

    In this scenario, you have paid more in taxes than your zakat obligation, hence you are not required to pay any Zakat this year. You can carry forward this $30 of more taxes paid this year for adjustment against Zakat obligation of next year.

    Refund usually happens when advance tax paid throughout the year is more than the final tax obligation at year-end. If this is the case, then the amout of refund cannot be considered as tax paid to the goverment, so the above equation would need to be adjusted accordingly.


    Hopefully this will give you a clear picture but in case of any confusion, please free to post a follow-up question here.

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