Hi
I came on feb,2008 on J1 as research scholar from Japan, where I styed the last 9 years.
I was tax exempt according to tax treaty between Japan and US.
In oct,2008, I changed into H1-b visa, Am I still eligiable to receive benefit of this tax treaty.
Thank you

On H1-B, you must pay FICA taxes and federal and state income taxes. Benefits of J1 tax treaty are not applicable.

You will file as a non-resident alien for 2008, because you have NOT met the Substantial Presence Test (SPT).

The time you were under the J-1 visa does not count towards SPT.

Further, the tax exemption cited under the tax treaty for your time as a researcher should exempt the income earned while working as a researcher provided the research was done for the public good.

Research done for a private for-profit corporation does not qualify for income tax exemption, though you ARE exempt from FICA taxes while under the J-1 visa.

The change in visa status will not impact your ability to claim the treaty exemption for the two year period.