Hi, I'm a South Korean woman working in the US.
I came as a J-1 trainee in mid-2017 and I claimed the J1 exemption in the Tax Return I filed in March 2018. I got a refund.

On November 30, 2018, my petition for H1B was approved.
I flew to Korea in February this year and got a new Visa H1B on my passport, with Issue Date February 20, 2019.

While I was a J1 holder, my employer was NOT withholding Medicare and Social Security. They were withholding Federal and State taxes only.
In December 2018 (right after the H1B petition approval) they started withholding Medicare and SS as well.

I think I am entitled to a fed/state tax refund for the time I was on J1 last year, is that right? This is my first question.

If the answer is yes, is the refund calculated from 1/1/18 to 11/30/18 (date of petition approval) or to 12/31/18 (since my actual Visa has an issue date of Feb 2019)?

Thank you very much for any advice you can give me!

I assume you are talking about the teacher's 2-year exemption.

To answer your question, you became liable for FICA tax withholding on the date your H-1B visa was approved, so your employer WAS correct in starting those withholding in December 2019.

You WILL file as a non-resident alien for 2018, filing Forms 1040NR, 8833 (to claim the exemption) and 8843 one last time. You ARE allowed to claim the tax exemption from 1 January to 29 November 2018, and get a refund on that basis.

How the state taxes your 2018 income depends on the state. Some states, like California, does NOT honor tax treaties, but most states do honor the treaty.

If you want help filing this return, I AM available and I prepare these types of returns every day. You can contact me at my email address in my profile.

Atlanta Tax Expert

Your salary earned from 30 November 2018 to 31 December 2018 is fully taxable

Thank you very much.
My state is NY.
I am not a teacher, I was a trainee in a science lab. It is my understanding that every J1 holder who is a trainee can claim the exception for up to 2 years (and until they are on J1). Is that right?

Also, and this is a different question. I did not have health insurance until December 1, 2018. I had a travel insurance that I purchased on my own in Korea (and that expired in July 2018).The tax return is asking me to answer if I had "qualified health coverage" in 2018, and for how long. I don't know how to answer this question.I have a form 1095-C that says, at box 14, 1H for January to November, then 1E. And in fact, I wasn't offered employer's paid insurance till December last year.
For those 11 months on J1, was I required to purchase a health insurance through the marketplace? Or my J1 status, which exempted me from Social Security and Medicare payments, also exempted me from health insurance?

Thank you very much.

For the medical insurance, you were NOT required to have any coverage until December 2018 because you were a non-resident alien. You just have to determine what exemption code to claim.

If you were not a teacher, then your exemption for both 2017 and 2018 are limited.

For 2017, the exemption only covers, at most, $10,000.

For 2018, the exemption only covers $2,000.

So what do I answer to this question? "Did everyone in your tax household have qualified health insurance for ALL 12 months of 2018"? I guess no.
I looked into my last year return, and found form 8965 where I claimed a full year health insurance exemption, code C. (don't know what that means).
The exemption you talk about in the 2nd part of your answer is related to Federal Tax, right? My total gross income in 2018 was $ 29,997.
Also, can I be considered a non-resident for NY state as well? Last year I filed form IT-203, claimed the standard deduction and ended up having a NY taxable income of $ 2500. I don't think I filed any 8833 /8843, unless my employer did that? Are they supposed to file it for me?
Thank you very much and sorry, this is so confusing.

The answer to the health question is NO, and you again use the exemption code of "C".

Yes, the exemptions I spoke of is for FEDERAL taxes, but New York will also honor those exemptions. You ARE a non-resident for 11 months, and a resident for December.

The Forms 8833 and 8843 are forms YOU are supposed to file.

Again, you may want to consider letting ME file your 2018 return for you.

Thank you again for your help. At this point, with a bit of luck, a bit of your help :)and some patience, I think I may make it.

I went through forms 8833 and 8843.
Form 8833 at box 1b is asking me the Articles (?)
Box 2, the IRC provisions overruled or modified by the treaty-based return position.
Box 4, even more enigmatic.
Instructions on this form aren't very clear to me.

What do I enter.. Thank you so much for your help!

Attachment 49147

Sorry, but now you are actually asking me to help you prepare the return without compensation, and there I draw the line.

Based on your previous posts, my fee would be about $275. All you would need to do is send me the tax data forms and answer some questions, and I would have the return done and efiled in a few days.