Hello,
I have a question related to the non-resident alien/tax exmption problems.
I was hired in the USA, University of Arizona, on October 1th, 2009.
For the fiscal year 2009 I used the Italy/USA tax treaty, article 20:
According to this article italians working in the USA as teacher/researchers are tax exempt for the first two years.
My questions are:
1) Will I be exempt from both federal and state taxes until September 30th 2011, or I will not have exemption from one
Of these taxes already starting on January 1st 2011?
2) If I will be still working with the same employer in the USA after September 30th 2011
I will not be able to claim any exemption for the period starting on October 1st 2011. But the question is:
Will I have to pay back all the taxes which I did not pay thanks to the tax treaty for the first two years
(October 1st 2009 - September 30th 2011)?
Thanks
Freddy

This question requires some in-depth research and review of the tax treaty itself, something I will NOT do without compensation.

As the cliché goes: Time is money!

The answer to this question depends upon the facts and circumstances of this case. I do this kind of thing for a living, and can corroborate that it takes a lot of research to determine exactly how it applies to you.

My understanding is that the Italy treaty does not have a recapture provision. The treaty did change in 2010 though.