Hi,

Since 2010 I've been in the US on a J-1 visa, working at US university, and I was eligible for the US-Germany tax treaty, so I didn't have to pay any federal taxes. However, the tax treaty is only valid for 2 years since the date of my arrival (August 2010), so as I understand I should have paid taxes since August 2012. However my university didn't withhold any taxes for the whole of 2012.

So my question is, how do I file the 2012 tax return? My W-2 form has an empty box 1 (wages), and all of my income is reported on 1042-S. For 2012 I already pass the substantial presence test, so I can file as a resident alien (the US-Germany tax treaty does have an exception to the saving clause), so where do I specify the tax-exempt amount on form 1040? (In previous years I filed form 1040NR)

Also, I first entered the US on my visa at the beginning of August 2010, but then returned to Germany, and re-entered at the end of August, just before my official start of employment on Sep 1 2010. So I'm wondering, from which date do I count the 2 year tax treaty period?

Thanks a lot in advance for any advice!

Are you married?

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Originally Posted by AtlantaTaxExpert

Are you married??

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No, not yet. Why does this matter?

Because you were exempt from the Substantial Presence Test while under the J-1 visa, so you will file a dual-status return for 2012.

If you were married, you could file a joint return and choose to be treated as residents for all of 2012.

Oh right. Under the substantial presence test I was exempt for two calendar years (2010, 2011), so I assumed that since I was in the US for more than 183 days in 2012, I would file as a resident alien for 2012. Is that not so?

However in any case, thanks to the tax treaty saving clause exception this shouldn't affect my tax treaty eligibility, right? So I guess my question was what is the correct way to split my income into the tax-exempt part (under the tax treaty) and the taxable part?

Yes, that split is the reason for the dual-status return.

BTW, the dual-status return is NOT FOR AMATEURS!

Get professional help from a tax pro with dual-status experience

Thanks. It does seem to be a lot more confusing than I originally thought. Especially since I also had other income (stock, dividends, etc). It will be a nightmare splitting everything.

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