I am an Italian citizen, and I am a professor in the US on a J1 visa, starting in Aug 2010. I know I qualify for the US tax exemption under the tax treaty. Does this mean that I have to pay Italian income taxes? If so, is there an option to pay US taxes instead?
Thanks for your help.

Francesca:

If you WANT to pay U.S. taxes and file a U.S. tax return, no one is going to stop you.

As to whether that will relieve you of your obligation to pay Italian taxes, I cannot say. You need to contact an Italian tax consultant and ask!

In order to qualify for the treaty benefits to be exempt from U.S. tax you must be liable to tax in Italy. As ATE says, if you choose to pay U.S. tax, this may not prevent you from being subject to tax in Italy.

Francesca71,
As per Italy and U.S. tax treaty, your income is exempt from federal income tax for up to 2 years.
If you still pay tax in U.S. I really doubt it will change your tax liability or tax treatment in Italy as authorities in Italy will refer you to tax treaty clause.
Also Italy should not tax you on the full amount you earned in the U.S. Maximum it should tax you is on the amount you saved after meeting your expenses in U.S. Check with Italy tax professional.

Thank you very much, MukatA - that makes sense and is very helpful.