Ask Me Help Desk - 6th year on F-1, only bank interest, use 8843 or not?

Hi there,

I'm a Canadian citizen attending a medical school in the US. I first started my studies in Aug 2003, and did a four year degree, graduating in May 2007. I filed as a non-resident alien (with form 8843) all 4 of those years. The following year I did a master's degree, also on F-1.

So for calendar years 2003 (for which I was a student for only 5 months), 2004, 2005, 2006, and 2007 I filed 1040NR, being exempt as an F-1 student.

Now, if I understand correctly, I am now considered a RESIDENT alien, since it is my 6th year on an F-1?

If I only have US bank interest income from my savings account, do I still file form 8843? Reading it, it seems to be ONLY for NON-resident aliens, so I'm not sure if that applies to me. However, other places state that all F-1 student should complete it, so that's why I'm confused.

Any help would be much appreciated.

In the 6th year you are resident. So you do not file Form 8843. You will file tax return only if your income meets the filing requirement.

MukatA's interpretation is correct at first glance. You have exceeded five years and the exemption from the Substantial Presence Test expired on 31 December 2007, so, by rule, you will be a resident alien in 2008.

However, you COULD make the argument that you have a closer connection to your home country in Canada. Undergraduate work, followed by a master's degree, followed by medical school, is a scholastic endeavor that takes a LONG time finish, one that the standard five-year period allowed for under the IRC does not satisfy.

It may be likely that filing as a resident alien is BETTER for you, because it allows you to claim tuition credits and deductions that are NOT available to you as a non-resident alien.

However, in your case, you may have a choice and are NOT OBLIGATED to file as a resident alien. You would have to submit your argument for closer connection to Canada in order to continue filing as a non-resident alien.

Thank you for that excellent response, I appreciate it. It seems to me that filing as a resident alien would be more beneficial. My next question is: will I be REQUIRED to file a return for year 2008 if my only income is bank interest, and less than $500USD at that, which will most likely not even meet the threshold for required reporting?

If I do file as a resident alien, will these tuition credits be refundable?

And if not, why file any return for 2008 whatsover? I'm just worried that if I don't file anything (no 8843 or no 1040) then I may get into trouble, which I don't want.

Quote:

Originally Posted by AtlantaTaxExpert

MukatA's interpretation is correct at first glance. You have exceeded five years and the exemption from the Substantial Presence Test expired on 31 December 2007, so, by rule, you will be a resident alien in 2008.

However, you COULD make the argument that you have a closer connection to your home country in Canada. Undergraduate work, followed by a master's degree, followed by medical school, is a scholastic endeavor that takes a LONG time finish, one that the standard five-year period allowed for under the IRC does not satisfy.

It may be likely that filing as a resident alien is BETTER for you, because it allows you to claim tuition credits and deductions that are NOT available to you as a non-resident alien.

However, in your case, you may have a choice and are NOT OBLIGATED to file as a resident alien. You would have to submit your argument for closer connection to Canada in order to continue filing as a non-resident alien.

If your only income is $500 in interest, then NO tax return is required due to the low income level.

Sorry, the tuition credits are NOT refundable.

Even though you are a resident alien, mailing in JUST the Form 8843 will hurt no one and will give the IRS the information about where you are and what you are doing.

AtlantaTaxExpert,

So I am about to file Form 8843 with the IRS since I do not have any income for 2008 and am now on my 6th year on an F-1 student visa. Question 12 asks "Were you present in the United States as a teacher, trainee, or student for any part of more than 5 calendar years?" I would check yes, since I've been on a F-1 visa in 2003, 2004, 2005, 2006, 2007 and 2008. Then it asks "If you checked the Yes box on line 12, you must provide sufficient facts on an attached statement to establish that you do no intend to reside permanently in the United States."

What do I have to do here? What type of statement is required? If I don't have to file 8843 since I am now a RESIDENT alien and I do not have any income, can I just not file anything? And if I do file and include an attached explanation, will I have to provide this explanation for the next 3 years that I will be on an F-1 visa and will be filing only 8843?

Thank you in advance for your advice and help.

Quote:

Originally Posted by AtlantaTaxExpert

If your only income is $500 in interest, then NO tax return is required due to the low income level.

Sorry, the tuition credits are NOT refundable.

Even though you are a resident alien, mailing in JUST the Form 8843 will hurt no one and will give the IRS the information about where you are and what you are doing.

And relating to the above, should I consider filing Form 8840 for a "Closer connection to a foreign country" (Canada?)? Would that be helpful at all, or is 8843+explanation sufficient?

A simple statement attesting to your closer connection and providing proof of that closer connection needs to be attached to the Form 8843.