Hello,

My fiancé is an Indian citizen on a J1 visa. From June 05 to Aug 05, he was working on a research project (not amounting to a degree) in Virginia. From Sep 05 till date, he is working on his Masters thesis research on the same J1 visa but in a university in Massachusetts. His J1 status will terminate in July 06.

I believe that he should be filing the foll:
1) 1040NR-EZ for federal taxes, 8843 for exempt status and 843 for refund of taxes withheld in error
2) Virginia state tax
3) Massachusetts state tax

Questions :
1) Are Indian citizens on J1 visas exempt from federal taxes ?
2) They are definitely exempt from SS and Medicare taxes, right ?
3) Can they claim standard deduction of $5000 available for students from India ?
4) Are there any other exemptions or benefits that J1 visa holders with the above profile could claim ?

Thank you so much,

Regards,
Bhavna

Bhavna:

You need to download IRS Pub 901 to review the provisions for India. I believe that his income IS exempt from taxes (federal income, SS and Medicare) because he is doing research, but I am not positive.

It is likely neither Virginia nor Massachusetts recognizes that exemption, however, so he may have to file state income tax returns.

The university human resources department for each university can give him a definite answer.