Hi,

I came to US on H1 in Oct 2005. (I do not satisfy the substantial presence test). I suppose I need to file the 1040NR-EZ form.

1. Can I claim the 5000$ standard deduction under India US treaty as a business apprentice (I do not know who qualifies to be a business apprentice)?
2. Am I exempt from Medicare and Social Security taxes?
3. I got interest on money deposited in my bank (ING Direct). Am I exempt from tax on it? Do I still need to report it and fill in 1040NR instead of NR-EZ?

Thanks!

SG:

1) No, you cannot. Students and business apprentices would be under a F-1 visa. Your H-1 visa is a work visa.

2) No. Your H-1 visa status makes oyu liable for these taxes.

3) No, that interest is subject to taxes.

You CAN file as a resident alien if you wait until June 2006 to file under First Year Choice. That will allow you to claim the $5,000 standard deduction.

Thanks a lot!
I did not know about that option. Could you please elaborate a little?
Or give me some links as to where I can find more information on this?

In this case I will have to apply for an extension for filing returns before filing it in June. Is that correct?

Thanks again!!

I have explained First Yea Choice multiple times on this forum. If you read the questions over the past two weeks, you will find a detailed explanation.

Yes, you need to file an extension. The Form is Form 4868.