Hi
This is my case:

I came to California from lebanon in summer 2005 on F1 student visa. My OPT began Feb2nd 2007. I worked from July07 till now in an engineering company. My status was F1 (and OPT) till feb1st 2008, J1 afterwards as a trainee for supposibly 18 months. However I started my green card process right after I got my J1 (through the company). Now my status is "pending lawful permanent resident" since I filed the "adjustment of status" form 485 that immigration received on July 11 2008.

I talked to IRS and they said as long as my green card didn't come yet, I am considered as J1, and should file form 1040 NR for 2008. I filed 1040 NR for 2007 because during 2007 I was on OPT. however in 2008 my status changed from F1 to J1 to "pending lawful permanent resident"

Can you tell me what form to file this year?
Thanks
Raffi

Raffi:

There is NO tax treaty between the U.S. and Lebanon, so the normal two-year duration on the J-1 visa applies.

Since you were on a F-1 visa from 2005, you spent three years (2005 through 2007) on F-1 status. That F-1 time counts against your J-1 visa. For this reason, it is my opinion that you should be considered a resident alien for 2008 and should file Form 1040, 1040A or 1040EZ.

You cannot argue closer connection to your home country because you are applying for a green card.

You mean the time I spent on F1 counts as J1time? Are you sure? Is there a paragraph in pub 519 that states that?

I asked IRS and they said I am still considered as a non resident.

Atlanta expert,
I think you are right. This is what pub519 says:

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.

The key word here is student. I cannot be exempt if I have J1 (teacher or trainee) if I was exempt as a student (F1) for more than 2 years.

Now my question is: I got the J1 in February, so did I become a resident in February? Does this mean I have to file for a dual status ?

Also one more question:
Am I elligible this year for a recovery rebate credit of 600$ since I became resident this year?

Yes, you should be eligible for the full $600 Recovery Rebate Credit if you file as a resident alien.