J1 Research Scholar Tax treaty

MukatA · Dec 18, 2011, 06:38 PM

This is from IRS publication 901. Tax Treaties: A professor or teacher who is a resident of Italy immediately before the date of arrival in the United States and whose visit to the United States is expected to last no more than 2 years to teach or conduct research at a university, college, school, or other recognized educational institution, or at a medical facility primarily funded from government sources, is exempt from U.S. income tax for up to 2 years on pay from this teaching or research.
This exemption does not apply to income from research carried on mainly for the private benefit of any person rather than in the public interest.

taxesforaliens · Dec 19, 2011, 07:45 AM

There is no retroactive clause in the US-Italy tax treaty. So you could claim it even if you stay longer than 2 years. The treaty is for exaclty 2 years starting the day you arrive in the US. So if you arrived September 2nd 2011 (for example), the treaty will be valid until September 1st, 2013.
You are a non-resident alien for 2 calendar years (2011 and 2012). As you stated in your other post, you are paid by a fellowship from Italy. Non-resident aliens are only required to report income from US sources, so if the Italian fellowship is your only income, you would not be required to file a return while you are a non-resident alien. You would only file form 8843.

rd2551 · Dec 19, 2011, 08:23 AM

Thank you very much for the answers,
so, can I claim the tax treaty even if I'll stay here more than 2 years?for example, tax treaty for the first two years (until September 2013) and then start paying taxes, true?

At moment the payroll office is subtracting from my paycheck the "Fed 1042". Is it something unrelated to tax treaty that I have to pay even if I am under tax treaty?

Thank you for helping me!

AtlantaTaxExpert · Dec 19, 2011, 08:48 AM

Contact The Columbia University payroll department and show them the pertinent article in the tax treaty to have them STOP withholding federal income taxes. You can also probably have them refund the federal income taxes already withheld if you get this done before the end of the year.

If not, you will have to file a 2011 tax return (Form 1040NR with Forms 8833 AND 8843) to get a refund.

As for the state, New York is one of the few states that generally HONOR tax treaties, so the income is probably exempt from NY state AND NY City income taxes as well.

Also, be sure they are NOT withholding FICA (Social Security and Medicare) taxes. You are exempt from these taxes for 2011 and 2012 as a matter of U.S. tax law due to your J-1 visa status. You become liable for FICA taxes starting on 1 Janaury 2013. Make SURE Columbia University is aware of that fact.

As for tax year 2013, you will be exempt until you hit the 2-year anniversary, then you become liable for federal and state income taxes. You will file as a non-resident alien for 2013 UNLESS you are married, in which case you can file jointly and you BOTH CHOOSE to be treated as resident aliens (while still being exempt for the first nine months of 2013).

Email me at kempetax@gmail.com if you have questions.

trasktor · Apr 9, 2012, 03:53 PM

Hi there, I am in the same position. It's good to hear that 'New York is one of the few states that generally HONOR tax treaties, so the income is probably exempt from NY state AND NY City income taxes as well.'
but what form should I file for NY state tax?

AtlantaTaxExpert · Apr 9, 2012, 09:55 PM

File Form IT-203 as a non-resident.

J1 Research Scholar Tax treaty

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