cekaata
Mar 17, 2011, 10:36 AM
Hello,
I entered the US in Sep 2009 with a J1 visa (category specialist) and I switched to H1B in August 2010. During both periods I was working (and still am) as a researcher at the University of Chicago.
For 2009, I did not claim the exemption that the tax treaty US-Italy (http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/italy.pdf) provides for teaching and research activity (art 20) since I received a low income and was almost under the regular tax allowance anyway.
For 2010, I'm considering claiming tax exemption based on the treaty, that is for 2 years. Please note that based on the substantial presence test I'm still a nonresident alien for 2010 (since for most of the year I was under J1), but the treaty has an exemption to the saving clause so the exemption does apply even if I become a resident (as I will in 2011).
My questions are:
- do the 2 exemption years have to be the FIRST 2 years or could I claim them later? My understanding is that they are the first 2 years but I'd like a confirm
- in case they have to be the first 2 years, when do they start in my case? September 2009 or August 2010? The online tax preparation program that I'm using (CINTAX) is suggesting me that I can claim exemption starting from August 2010 but again I'm not sure.
- if the 2 years do start from August 2010 and I claim the exemption for fiscal 2010, am I using one of the 2 exempt years or just 5 months (Aug-Dec)?
- the treaty says that the exemption applies to "a professor or teacher who makes a temporary visit to a Contracting State for a period that is not expected to exceed two years for the purpose of teaching or conducting research". My current visa is for 3 years (as usual in H1B) so the period I'm staying here actually is expected to exceed 2 years. Can I still claim the exemption? And if I do and I stay the third year (when the exemption is over) am I risking that the IRS will want the taxes back?
Thank you for any help or suggestion you may have.
Best,
Cecilia
I entered the US in Sep 2009 with a J1 visa (category specialist) and I switched to H1B in August 2010. During both periods I was working (and still am) as a researcher at the University of Chicago.
For 2009, I did not claim the exemption that the tax treaty US-Italy (http://www.treasury.gov/resource-center/tax-policy/treaties/Documents/italy.pdf) provides for teaching and research activity (art 20) since I received a low income and was almost under the regular tax allowance anyway.
For 2010, I'm considering claiming tax exemption based on the treaty, that is for 2 years. Please note that based on the substantial presence test I'm still a nonresident alien for 2010 (since for most of the year I was under J1), but the treaty has an exemption to the saving clause so the exemption does apply even if I become a resident (as I will in 2011).
My questions are:
- do the 2 exemption years have to be the FIRST 2 years or could I claim them later? My understanding is that they are the first 2 years but I'd like a confirm
- in case they have to be the first 2 years, when do they start in my case? September 2009 or August 2010? The online tax preparation program that I'm using (CINTAX) is suggesting me that I can claim exemption starting from August 2010 but again I'm not sure.
- if the 2 years do start from August 2010 and I claim the exemption for fiscal 2010, am I using one of the 2 exempt years or just 5 months (Aug-Dec)?
- the treaty says that the exemption applies to "a professor or teacher who makes a temporary visit to a Contracting State for a period that is not expected to exceed two years for the purpose of teaching or conducting research". My current visa is for 3 years (as usual in H1B) so the period I'm staying here actually is expected to exceed 2 years. Can I still claim the exemption? And if I do and I stay the third year (when the exemption is over) am I risking that the IRS will want the taxes back?
Thank you for any help or suggestion you may have.
Best,
Cecilia