Hello,

I am a Sri Lankan citizen on a HIB since 1999. I generally file 1040 resident.
In 2005 ( yes I am a bit late- but I estimate refund ) i left to Sri Lanka for a year and worked for the Sri Lanka government - coming back to the US in september 2006.
In 2007 i was in the US full time and filed a 1040 on time. So I have :
2005 Jan-Aug ---US income
2005 Sept- Dec ---- SL income ( plus I guess US income of a few dollars of interest on my savings in my US bank)
2006- Jan - Aug---- SL income ( US income is only interest in savings a/c)
2006- Sept_-Dec ----US income

what I am trying to do is get exemption for the income earned in sri lanka where i worked for the govt under the tax treaty with the US. Page 31 of IRS Publication 901 states that money paid by the Sri Lanka government is exempt from US tax. It ALSO states in the introduction to that section that "residents who are present in the US as NON-resident aliens are exempt". So I have to file as a non-resident to get treaty benefits?
My question is do I/can I file for the years 2005 and 2006
1) 1040 and 8833 ( treaty based return position disclosure)
or
2) 1040NR and 8833
or
3) 1040 AND 1040NR AND 8833
one advice was to file 1040 for the period i was in US( say jan-aug2005) and then 1040NR for the period i was not in the US ( sept -dec 2005). I was looking at the 1040NR form- would I include my US income earned during jan-aug in this form at all? or just fill in line 22 which is the income i want exempted?
also is there any prorating involved - do i only get 2/3 of the standard deduction in the 1040 since i was only in the US for 2/3 of the year?

Sorry this question is long and complicated , but any assistance will be much appreciated .
thanks!
rajiv

MukatA

1. If you file resident tax return, then you don't get treaty benefit and don't file 8843.
2. In 2006 you were in the U.S. for only 4 months. You will file nonresident tax return.
3. You file 8843 if you have an exempt from residency visa (like F1, J1..)

You situation may change depending upon your visa, and married or single.

oneray

HI MuKat,

I am single on HIB, and during my time out of the country had no income connected to a US source. I was reading more on dula status filing
2005- 1040NR dual status return - 1040 as dual status statement and then
2006 - 1040 dual status return and 1040NR as dual status statement

at end 2005 _ i was not not resident in the country- so i was thinking I could file as NR.

Also I cannot find this "tie breaker rule " in PUb 519 that allows residents to benefit from tax treaties. Getting a bit confused re. dual resident versus dual status ..on that front

MukatA

Dual status means that
1. You are nonresident in the beginning of the year and resident at the end of the year, or
2. You are resident at the beginning of the year and nonresident at the end of the year.

For being a resident, you must meet Substantial Presence Test.
Read Your U.S. Tax Return: Substantial Presence Test