Hi
I know there is a treaty between USA and India that if you are on J1 visa your income is exempted for federal taxes for first two year.

Suppose a persone with J1 visa stays in US and take tax treaty benefits for first two years? Which means he did not pay federal taxes for two years.
Now if he continue to stay in third year, my question is

In the third, will he pay the taxes on the income that he made on third year or he is supposed to pay back the taxes which he did not pay for the two years because of tax treaty between USA.

Thanks for help

For what purpose your J-1 visa was issued?