Hi,

Since 2010 I've been in the US on a J-1 visa, working at US university, and I was eligible for the US-Germany tax treaty, so I didn't have to pay any federal taxes. However, the tax treaty is only valid for 2 years since the date of my arrival (August 2010), so as I understand I should have paid taxes since August 2012. However my university didn't withhold any taxes for the whole of 2012.

So my question is, how do I file the 2012 tax return? My W-2 form has an empty box 1 (wages), and all of my income is reported on 1042-S. For 2012 I already pass the substantial presence test, so I can file as a resident alien (the US-Germany tax treaty does have an exception to the saving clause), so where do I specify the tax-exempt amount on form 1040? (In previous years I filed form 1040NR)

Also, I first entered the US on my visa at the beginning of August 2010, but then returned to Germany, and re-entered at the end of August, just before my official start of employment on Sep 1 2010. So I'm wondering, from which date do I count the 2 year tax treaty period?

Thanks a lot in advance for any advice!

Are you married?

Are you married??

No, not yet. Why does this matter?

Because you were exempt from the Substantial Presence Test while under the J-1 visa, so you will file a dual-status return for 2012.

If you were married, you could file a joint return and choose to be treated as residents for all of 2012.

Oh right. Under the substantial presence test I was exempt for two calendar years (2010, 2011), so I assumed that since I was in the US for more than 183 days in 2012, I would file as a resident alien for 2012. Is that not so?

However in any case, thanks to the tax treaty saving clause exception this shouldn't affect my tax treaty eligibility, right? So I guess my question was what is the correct way to split my income into the tax-exempt part (under the tax treaty) and the taxable part?

Yes, that split is the reason for the dual-status return.

BTW, the dual-status return is NOT FOR AMATEURS!

Get professional help from a tax pro with dual-status experience

Thanks. It does seem to be a lot more confusing than I originally thought. Especially since I also had other income (stock, dividends, etc). It will be a nightmare splitting everything.

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