Dear Tax Expert,

I have 2 questions about my tax situation. I worked in NC state up until Dec 29 2010. But since we get paid every two weeks, and pay is only after work (hourly based pay), My paycheck for the last week of work shifted into first week of January. When my W2 for 2010 was made, the payment was not reflected, and now I have a W2 from the employer for 2011 reflecting this one week of payment which was really a 2010 work week. Now, I started work in GA in May 2011, and therefore have a W2 for GA state as well.
I want to know for tax filing this year, Am I filing both NC and GA state tax? Will I be paying taxes to both states for all my income or what? Please enlighten me on this.

The second question is about the 5-year rule. I arrived in the US on the wee hours of December 31st 2007 (probably around 11pm) So my arrival date was stamped Dec 31. In 2008, I was told I had to file form 8843 even though I didn't earn any income, which I did. Now for the 5-year rule, I have been in F-1 status since then till now (OPT included). To count my five calendar years, is 2007 included? Can you help clarify which year I need to start filing as a Resident Alien.

Thanks

I want to know for tax filing this year, Am I filing both NC and GA state tax? Will I be paying taxes to both states for all my income or what? Please enlighten me on this.

Since the company paid you in January 2011, that's the tax year you report the income for. It does not matter that the pay was for work you performed in 2010. So yes - you have income from both GA and NC in 2011, and you file as part-year resident of both states. This way you pay tax to GA on income received while a GA resident, and to NC on income received while a NC resident. The result is that you do not pay taxes to both states on the same income; however you do have to report your total income for the year to both states so that the appropriate income tax rate is applied.

Sorry - I can't answer your question about the 5-year rule.

I can address the 5-year rule.

That two hours in 2007 counts for an ENTIRE year, so 2011 is your FIFTH year. For 2012, you became liable for FICA (Social Security and Medicare) taxes. You have the legal obligation to MAKE SURE your OPT employer is aware of this fact.

You also become subject to the Substantial Presence Test. If you spend every day of the year in the U.S. in 2012, you will file as a resident alien for 2012.

Ebaines, Thank you for your prompt response.

Atlanta Tax Expert,

Please I need a bit more clarification. Are you saying when I file my return this February (which is for 2011) that will be my final year as a NonResident Alien, or I am filing as a resident alien?

Also, I am currently on my PhD program as a graduate research assistant (after OPT was completed) should FICA taxes be deducted starting this January?

Is the substantial presence test a 365 day presence, because I went back to my home country over the christmas break, and came back into the country on the 15th of January, does this change anything?

Thanks!

Horlah:

Yes, 2011 IS your final year as a non-resident alien.

So, yes, you DID become liable for FICA (Social Security and Medicare) taxes starting on 1 January 2012.

Because you were NOT in country for EVERY day in 2012, for 2012, you will have to file a dual-status return. If you are MARRIED, you can file jointly and CHOOSE residency status.

For 2013 and beyond, you will file as a resident regardless of your marital status.

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