Can my own company sponsor my H-1B? How founders set up the company, payroll and taxes

Yes, if three things hold: the company is a real U.S. employer, the job is a specialty occupation that requires a related degree, and you spend most of your time doing that work. If you own more than 50% or hold majority voting rights, your first approval and first extension are each capped at 18 months.

Many of our clients are F-1 graduates already building a business on OPT or STEM OPT, or people who want to run their own consulting, software, trade or design company instead of tying their status to someone else's employer. Self-sponsorship used to be hard in practice. The H-1B modernization rule, published in December 2024 and effective January 17, 2025, put beneficiary-owners into the regulations.

• Beneficiary-owner: You own more than 50% of the petitioning company or hold majority voting rights. Below 50%, without majority voting control, the regular rules apply and there's no 18-month cap.
• Most of your time on specialty work: You can handle some management, but most of your time has to go to the specialty duties in the job description, such as software development, financial analysis or engineering design.
• 18 months: The first approval and first extension are each up to 18 months. Later extensions follow the normal rules, up to 3 years, with the usual 6-year H-1B maximum.
• A real position: The rule requires a bona fide specialty-occupation position for the beneficiary, and USCIS can ask for contracts or other evidence of the work.
• A sole proprietorship won't work: The employer has to be a company that pays wages. A single-member LLC that's disregarded for tax purposes can't put its owner on W-2 payroll, so it needs to be taxed as a corporation (see below).

Whether the job and degree line up, how the LCA is filed, and how the employment agreement and governance are set up are immigration-law questions for your attorney. Our job is to make the company, the payroll and the books hold up.

Most companies file cap-subject petitions: online registration every March, wage-weighted selection since 2026, I-129 filing from April after selection, and work starting October 1 at the earliest. The company pays the fees, which depend on its size. As of October 2026, the $100,000 payment isn't being collected because of court rulings.

• The cap: 85,000 a fiscal year, including 20,000 for U.S. master's degrees or higher.
• Wage-weighted selection: Under the rule published December 29, 2025 and effective February 27, 2026, entries depend on the OEWS wage level your offered wage reaches: one at Level I, two at Level II, three at Level III, four at Level IV. FY2027 (registration in March 2026) was the first season. Beneficiary-owners are included.
• A higher level means a higher wage: Registering at Level III or IV improves the odds, but after selection the company has to pay that wage and the payroll taxes on it. Work out whether the company's cash flow can carry it before you register.
• The $100,000 payment: The September 2025 proclamation required an extra $100,000 on new petitions for beneficiaries outside the U.S. without a valid H-1B visa. On June 8, 2026 a federal court in Massachusetts vacated the implementing guidance, the First Circuit refused to stay that ruling on July 24, and USCIS says it is complying. A September 2026 proclamation extends the restriction to September 21, 2027. The government is appealing and things may change, so have your attorney confirm the status before filing.

These fees and the attorney's bill should be paid by the company and recorded in its books, not put on your personal card and left off the books. The ACWIA fee can't be borne by the employee.

In effect: the wage-weighted lottery, the 18-month limit for beneficiary-owners, no more automatic extensions for work permit (EAD) renewals, and online-presence screening at visa interviews. Still proposed or under review, and not in effect: ending the 60-day grace period, ending deference to prior approvals at extension, an extra $103,265 on new petitions, higher prevailing wage levels, and an H-1B reform proposal not yet published. A proposal only takes effect after public comment and a final rule, and the final version can change.

Description: The top rows are in effect, the lower rows are proposals or under review, and the last column is the impact on founders sponsored by their own company.

Policy	Status	What it does	Impact on your own-company H-1B
Wage-weighted lottery	In effect (2026-02-27)	One entry at Level I up to four at Level IV; several registrations for one person count at the lowest level; the FY2027 cap was reached 2026-07-17 with no second round	The level you register at is the wage you pay after selection
18 months for beneficiary-owners	In effect (2025-01-17)	Owners above 50% get up to 18 months on the first approval and first extension	The first extension comes fast
No automatic extension for work permit renewals	In effect for renewals filed from 2025-10-30; made permanent by the 2026-10-14 final rule	Renewals used to extend the old card up to 540 days; now work stops when the old card expires before the new one arrives	An H-4 spouse with a work permit should file the renewal as early as 180 days before expiry
Online-presence screening at visa interviews	In effect (from 2025-12-15)	H-1B and H-4 applicants set social media to public; some consulates pushed interviews back months; most interview waivers have ended	Leave time for visa trips and plan the company's operations and payroll around them
Ending the 60-day grace period	Proposed: published 2026-09-11, comments until 2026-11-10	Today you have up to 60 days after employment ends to find a new employer, change status or leave; the proposal removes it	The 60 days still apply; your own company stopping payroll or closing also ends employment
Ending deference at extension	Proposed: published 2026-10-14, comments until 2026-11-13	Today an extension with the same employer and job generally defers to the prior approval; the proposal means a full new review and likely more RFEs	Beneficiary-owners extend at 18 months, so payroll, returns and financials must stand up to a fresh review
Extra $103,265 on new petitions	Proposed: published 2026-08-25, comments closed 2026-09-24	Cap-subject new petitions, whether a change of status inside the U.S. or consular processing; not extensions or cap-exempt employers	If finalized, a big jump in the cost of your company's first petition; budget for it before registering
Higher prevailing wage levels	Proposed (Department of Labor): published 2026-03-27, comments closed 2026-05-26, not final	The four levels move from the 17th / 34th / 50th / 67th percentiles to the 34th / 52nd / 70th / 88th; DOL estimates about $14,000 more per worker per year	Once final, new LCAs use the new levels and wage and payroll tax costs rise
H-1B reform proposal	Under review: sent to the White House 2026-08-24, not yet published	Per the regulatory agenda: cap-exemption eligibility, more scrutiny of violators, third-party placement	Reassess once it's published
$100,000 payment	Not collected: implementing guidance vacated; a new proclamation runs to 2027-09-21; courts have split and the government is appealing	Beneficiaries outside the U.S. without a valid H-1B visa	Have your attorney confirm the status before filing

How long do I have after a layoff, resignation or the company closing?

• Current rule: After H-1B employment ends you get a grace period of up to 60 days, or until the end of the approved validity period if that's sooner, once per validity period. In that time a new employer can file for you (you can generally start working for them once it's filed), you can change status, or you can leave.
• For founders: Your own company stopping payroll or closing also ends your employment, and the grace period starts then. If cash is getting tight, talk to the attorney before payroll is missed.
• The proposal: The proposal published September 11, 2026 would remove the 60 days. It isn't final as of October 2026 and the current 60 days still apply. If it's finalized, losing the job could mean losing status almost immediately.

Can my H-4 spouse work, and what has changed?

• H-4 alone doesn't allow work: A spouse can apply for a work permit (EAD) only if the H-1B worker has an approved I-140 or has extended beyond 6 years under AC21.
• With a work permit, employment or self-employment is fine: Your spouse can also be paid by your company, through regular payroll with taxes withheld.
• No more automatic extension on renewal: For renewals filed from October 30, 2025, work stops if the old card expires before the new one arrives, and the October 14, 2026 final rule made that permanent. File as early as 180 days before expiry.
• Rumors of ending H-4 work permits: As of October 2026 no proposal to end them has been published, and ending them would require notice-and-comment rulemaking.
• Taxes: A spouse on a joint return needs an SSN or ITIN, and can apply for an SSN once the work permit is approved.

How we help you prepare for these changes

• Extension records built for a fresh review: From the first month, payroll, Forms 941, W-2s, corporate returns and financial statements that agree with each other.
• Cash flow modeled on a tougher case: Factor in higher prevailing wages and possible new petition fees before choosing the wage level to register at.
• Talk first when the company hits trouble: Stopping payroll or closing the company starts the grace period, so plan it with the attorney and us.
• Your spouse's work permit and taxes planned together: Early renewals, and regular payroll if your spouse is paid by your company.

To pay yourself W-2 wages, the company has to be taxed as a corporation. A C corporation is the safest choice, and an LLC can elect to be taxed as one. A single-member LLC is disregarded by default and can't put you on W-2 payroll. An S corporation needs U.S. citizen or resident shareholders, which F-1-to-H-1B founders often aren't in the first year or two.

• Be careful in the year you switch from F-1: F-1 students are generally not U.S. tax residents for their first 5 calendar years. If H-1B starts October 1, you usually count fewer than 183 days that year and are likely still a nonresident, which is a problem for an S corporation. Count the days year by year before deciding.
• Foreign shareholders: A U.S. corporation that is at least 25% foreign-owned files Form 5472 every year, and each missed form carries a $25,000 penalty (see yclcpa.com/diirsp).
• Which state: Usually the state where the business actually operates and you actually work; if you live in North Carolina, that's usually an NC company. Forming elsewhere means a foreign registration at home too (see yclcpa.com/llc).

Your immigration attorney handles the H-1B itself: eligibility, the position and degree, the wage level, the LCA, registration, the I-129 and any RFE. YCL handles the company and the money: formation, tax classification, payroll, bookkeeping, financial statements, the company's and your own returns, and the company records the attorney needs, in the form they need them. We plan together from the start, and we've worked with attorneys on a number of approved cases.

Description: Left to right in time order, with who's responsible at each step and what gets delivered.

Stage	Immigration attorney	YCL (CPA)	Deliverables
1. Planning (2–3 months before registration)	Eligibility, the position, the degree fit and the wage level; governance and employment agreement	Entity type and state; model the wage, payroll taxes and cash flow; confirm the company can pay the registered level	Job description, wage level, funding plan
2. Forming the company	Review articles, shareholder agreement and board structure	Form the company, get the EIN, prepare bank documents, elect corporate taxation (8832 / 2553)	Formation documents, EIN letter, bank account
3. Registration and lottery (March)	Submit the registration	Provide the EIN and company details	Registration confirmation
4. Filing the I-129 (after selection)	File the LCA, prepare the I-129, answer any RFE	Financial statements, proof of funds and the financial projections in the business plan, checked against the petition	Financial statements, projections, bank statements
5. Starting work (from October 1)	Explain ongoing compliance duties	Register for state withholding and unemployment, start payroll, pay the LCA wage and the payroll taxes	Pay stubs, Form 941 and state filings
6. Every year and at extension	Prepare the extension (18 months for a beneficiary-owner)	Books, W-2s, Forms 940 / 941, corporate and personal returns, and the payroll and financial records for the extension	W-2s, returns, payroll records, financial statements

We don't give immigration legal advice or decide eligibility for the attorney, and attorneys usually don't run a company's taxes or payroll. Clear roles and consistent records are what make these cases go smoothly, through approval and extension.

Once approved, the company pays you at least the LCA wage through W-2 payroll, on schedule, with taxes withheld and deposited. Distributions, transfers or a lump sum at year-end don't count, and you're paid even when the company has no work for you. Your payroll records are the most important evidence at extension time.

• How much: At least the wage on the LCA, which is the higher of the actual wage and the local prevailing wage for the job. The wage level you registered at has to be honored after selection.
• How: Run real payroll on a fixed schedule (monthly or every two weeks, for example), withholding federal and state income tax plus Social Security and Medicare (FICA). H-1B workers aren't exempt from FICA.
• The company's taxes: The employer's half of FICA, federal unemployment tax (FUTA) and state unemployment insurance. In North Carolina that means NC-5 withholding and NCUI unemployment accounts.
• File on time: Form 941 every quarter, Form 940 and W-2s every year, and state withholding and unemployment returns on the state's schedule (see yclcpa.com/payroll).
• Pay even without work: If the company idles you for its own reasons, such as no projects, the wage is still due. This matters especially for beneficiary-owners, because a company that can't make payroll puts the extension at risk.
• H-1B costs can't come out of your pay: Attorney and filing fees are company expenses and can't be deducted so that your pay drops below the LCA wage.
• Dividends are separate: The company can distribute profits, but distributions aren't wages and don't count toward the LCA wage.

For the petition and the extension, attorneys commonly use the formation documents, EIN letter, bank statements and proof of funds, financial statements, the business plan's financial projections, client contracts, payroll records, W-2s and Forms 941, and the corporate tax returns. The numbers need to agree with each other and with the petition.

• A new company (first petition): There are no tax returns yet, so the case usually rests on proof of funds, an opening balance sheet, 1–3 years of revenue and payroll projections, and signed contracts or letters of intent showing the company can pay.
• The extension (after 18 months): The focus is how much was actually paid (payroll records, Forms 941, W-2s) and whether the company has real revenue and operations (financial statements, returns, contracts, invoices).
• Keep the numbers consistent: The wage in the petition, on the pay stubs, on Forms 941 and W-2, and as wage expense on the corporate return should all line up. A mismatch causes more trouble than a small number.
• Keep company money separate: A separate business account, revenue into the company, expenses paid by the company. Mixing personal and business money makes the financial statements hard to explain.

With H-1B you usually become a U.S. tax resident that year or the next, which means reporting worldwide income, plus FBAR and Form 8938 if your accounts in China or elsewhere are over the thresholds. The W-2 wages from your company go on your personal return; the company's profit is taxed at the company level.

• Tax residency: H-1B isn't an exempt status, so your days in the U.S. start counting. Meet the substantial presence test and you're a resident for the year. The year you change status may be a dual-status year, so count the days carefully.
• Worldwide income and foreign accounts: Once you're a resident, interest and wealth-product income in China is reportable, an FBAR is required if your foreign accounts total more than $10,000, and Form 8938 if your assets pass its threshold (see yclcpa.com/sfop).
• A spouse on H-4: A spouse without an SSN on a joint return needs an ITIN (see yclcpa.com/itin).
• Separate returns: The C corporation files Form 1120 and you file Form 1040. Your wages are an expense to the company and income to you.

Start with your current status, whether the company has business and funding, and how much of it you own. The common situations are below.

• Situation A: You're already building a business on F-1 / OPT and want your company to sponsor you. Start 2–3 months before registration: the attorney checks eligibility and the position, and we pick the entity and model the wage and cash flow. You're likely still a nonresident in the year you switch from F-1, which affects the entity choice.
• Situation B: The company doesn't exist yet. Confirm feasibility with the attorney first, then form it. A C corporation, or an LLC taxed as a corporation, in the state where you work is usually the way to go.
• Situation C: You own less than 50%, with other shareholders or investors. You're not a beneficiary-owner and the 18-month cap doesn't apply, but the attorney needs to design the governance and employment relationship. If foreign shareholders own 25% or more, the company files Form 5472 every year.
• Situation D: You already have H-1B and the first extension is coming. Reconcile the payroll records, Forms 941, W-2s, corporate returns and financial statements, fill any gaps, then hand everything to the attorney.
• Situation E: Cash is tight and payroll may be hard to make. Talk to the attorney and to us first; don't stop or cut pay on your own. Missing the LCA wage is a bigger problem than registering at a lower wage level.