Hi,

I arrived from Belgium in the US under a J1 visa, with my wife (J-2) in November 2009. For 2009 and 2010, I was considered as a nonresident alien, and filled forms 8843 and 1040nr-ez.

Given my days of presence in the US and because it is my 3rd year, I think that I must now fill the form as a resident alien:
2011: 204
2010: 334
2009: 57

However, I believe that there is a saving clause exemption (US/Belgium treaty) that exempts me from Federal taxes (not FICA) until November 2011 (I leaved USA in August 2011).

Am I right?

As a resident alien, I can now fill jointly with my wife (which is an independent contractor, but not exempted as a J2). Hence, I think that we need to fill form 1040EZ plus all the schedules she needs as an independent contractor. Is it right?

Which additional form should I fill to claim the tax treaty?

Is it preferable to use separate tax returns - 1 for my wife and 1 for me?

Thanks!
Sébastien

I believe you ARE correct, but to know for sure would require I research the tax treaty with Belgium, and, atthis time of year, I simply do NOT have the time do that research without compensation.

If you want my professional help, double-click on my title above and scroll down to my profile/signature. You will find my email address and websites there.

This is from IRS publication 901. Tax Treaties.
"An individual who is a resident of Belgium at the beginning of the visit to the United States and who is temporarily in the United States to teach or carry on research at a school, college, university or other educational or research institution is exempt from U.S. income tax for a period not exceeding 2 years from the date of arrival in the United States on income received for teaching or carrying on research."

If you are a teacher or researcher, you are exempt in 2011.

Thank you for your answers. I'll try to do it by myself, and I'll contact you if I need professional help.

Any idea which form needs to be filled to claim tax treaty benefits?

Sébastien

I believe you would fill Form 8833 to claim the treaty, and enter the exempted income as a negative on "other income" on 1040.

I will read about this form. Thank you!

You will file nonresident tax return and form 8843. It is not 8833. http://taxipay.blogspot.com/2008/03/us-tax-filing-requirements-for-non.html

I cannot file as a nonresident because 2011 is my third year as a trainee (not student), and my days of presence in the US make me a resident alien for tax purposes. Hence, 8843 is not for me.

Sébastien

Seb007:

Read the extract that MukatA provided: It is two years from date of arrival, which means your exemption would extend into a third year (2011) based on the timeline you provided.

The extract is for tax exemption but not for the substatial presence test.

Exempt Individuals: Teachers and Trainees (http://www.irs.gov/businesses/small/international/article/0,,id=96320,00.html)
"You will not be an exempt individual as a teacher or trainee if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years"

Hence, if I am right, I am not exempt from the substantial presence test, and I have to file as a resident alien.

But I am exempt from paying taxes because of the US/Belgium tax treaty.

I found a text here that confirms the use of form 8833:
U.S. Tax Solutions for resident alien and nonresident alien foreign nationals (http://www.form1040nr.com/taxtreaties.php)
"However, most tax treaties contain an exception to the "saving clause" provision for individuals who claim tax treaty benefits as students, trainees, teachers and researchers. Therefore, if you are no longer an exempt individual, income you receive as an F, J, M or Q visa holder might be exempt from U.S. taxation under the treaty with your home country, even if you are classified as a resident for U.S. tax purposes."

"As a resident, you will file Form 1040, Form 1040A or Form 1040-EZ, whichever applies to you. Attach Form 8833 to explain the treaty benefit being claimed as well as the reliance on an exception to the saving clause."

Also (but they don't indicate to use form 8833):
http://www.irs.gov/businesses/small/international/article/0,,id=106254,00.html
"Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on income from a scholarship or fellowship grant. A student (including a trainee or business apprentice) or researcher who has become a resident alien for U.S. tax purposes may be able to claim benefits under a tax treaty that apply to reduce or eliminate U.S. tax on scholarship or fellowship grant income. Most treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for scholarship or fellowship grant income even after the recipient has otherwise become a U.S. resident alien for tax purposes."

The tax treaty over-rides the general rule that J-1 visa holders are resident aliens after two years in country.

The Form 8833 is used to explain the exception and to cite the treaty that allows you to claim tax exemption. It IS rather complicated, which is why most person in your circumstance gets someone like me to prepare the return.

If you want my professional help, double-click on my title above and scroll down to my profile/signature. You will find my email address and websites there.

Hi,

I just read about the dual residency rule.

As I left US in August, can I claim dual residency and file the nonresident form?

http://www.irs.gov/businesses/small/...=96433,00.html
"Nonresident at End of Year
You must file Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents if you are a dual-status taxpayer who gives up residence in the United States during the year and who is not a U.S. resident on the last day of the tax year. Write "Dual-Status Return" across the top of the return. Attach a statement to your return to show the income for the part of the year you are a resident. You can use Form 1040, U.S. Individual Income Tax Return as the statement, but be sure to mark "Dual-Status Statement" across the top."

That would be the most simple, especially since I got some wages in France after leaving US, and I will need to declare it for French taxes.

Filing dual-status IS an option, but it should be modeled BOTH ways before deciding.

Note that the dual-status return is NOT for amateurs; get professional help with someone who has experience filing dual-status returns.

Maybe you can help me with my problem: Can you please let me know if on your DS-2019 form (you got it when starting your 'j1 visa), you got it for 2years? 3 years? More? Less?
I am asking that because it may affect the tax treaty.

Most of the time, the DS-2019 tells you little about whether you can claim treaty exemptions or not.

The Ds-2019 tells what was the expected duration of my stay according to my empoyers. I understood that if its more than 2 years, that may cause a problem. Then, I need to prove that I did not expect to stay longer, regardless of my employers' expectations. Is that true?

Tax-wise, whether you expected to stay beyond two years or not is not relevant. If you stay beyond two years and there is a retroactive tax provision in the tax treaty, the tax is due, regardless of whether you expected to stay beyond two years or not.