Ask Experts Questions for FREE Help !
Ask
    lovemiracle's Avatar
    lovemiracle Posts: 2, Reputation: 1
    New Member
     
    #1

    Jul 13, 2008, 05:42 PM
    Tax exemption for a Chinese J-1 visa in a company
    Dear Tax Experts:

    I came to US with J-1 visa from China for a training program sponsored by AIPT in April. I am working as a visiting scholar in a company and my status is single and have no dependants. I filled out W-4 to state I am a non-resident alien when I began my training.

    The payroll of the company withheld Federal and state taxes, and also SUI/SDI tax every months. I did some research and found out that according the US-China treaty, I am exempt from these taxes. I told payroll manager last month but they had no idea or no experience of these conditions.

    So, my question is, am I exempt from these taxes? If yes, how can I or the payroll do next?

    Thank you so much
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #2

    Jul 13, 2008, 08:06 PM
    Are you a trainee or a researcher? This makes a big difference.

    Everyone on J1 is exempt from residency and Social Security and Medicare Taxes for two year. You will get exemption as per tax treaty. Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

    For researcher: Your U.S. Tax Return: U.S. Tax Treaties for Professors, Teachers and Researchers
    lovemiracle's Avatar
    lovemiracle Posts: 2, Reputation: 1
    New Member
     
    #3

    Jul 14, 2008, 07:43 AM
    Hi, MukatA,

    How can I define a trainee or a researcher? From my DS-2019 form or according my work title?

    Thank you so much



    Quote Originally Posted by MukatA
    Are you a trainee or a researcher? This makes a big difference.

    Everyone on J1 is exempt from residency and Social Security and Medicare Taxes for two year. You will get exemption as per tax treaty. Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

    For researcher: Your U.S. Tax Return: U.S. Tax Treaties for Professors, Teachers and Researchers
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #4

    Jul 14, 2008, 10:28 AM
    LoveMiracle:

    Based on your original posting, you are a trainee, because even if you are doing research, research done for a for-profit company does NOT qualify for total tax exemption.

    The BAD News is that you MUST pay federal and state income taxes, as well as SDI/SUI. Note that even if you were exempt from the federal income taxes, the state income taxes would STILL be due because most states do NOT recognize the various tax treaties between the U.S. and other countries.

    The GOOD News is that you are exempt from FICA (Social Security and Medicare) taxs for the first two calendar years you entered the U.S. Unfortunately, ANY part of the first calendar year counts as a full year, so this exemption is good for 2008 and 2009.

    BOTTOM LINE: It looks like your payroll department is withholding the taxes correctly.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Chinese Company real or fake [ 11 Answers ]

Does anyone know if this chinese company and website is real or fake. Im a dropshipper that wants to buy brand name laptops and this site have them and say that they are real. They have sent through email some paperwork but I cannot read any of it. The website is Cbeiec.com Please let me know...

Tax exemption? A chinese got J1 visa from Canada to enter you.S [ 1 Answers ]

I am a Chinese, but I got my J1 exchange scholar visa to enter U. S from Canada (I have been living in canada for 6 years but am NOT an immigration in canada). The tax people said that my tax would be based on the canadian policy. Is that true? Am I eligible to tax exemption? Thank you.

J-1 visa tax exemption, change status to H-1B visa? [ 5 Answers ]

Hello, I'm from Thailand and holding J-1 visa. For J-1 visa I can exempt tax for 2 years. I'm wondering how's tax payment after 2 years in two different status. 1. If I extend J-1 visa, do I need to pay tax back for the first two years? 2. If I change to H-1B, do I need to pay tax back...

Tax for first year H-1b visa holder: chinese citizen [ 1 Answers ]

Dear Expert: I came to US in 2005 with F-1 visa. I got my OPT in October 2006 and got my H-1b visa February 2007. Now which form should I file? IRS mailed me a 1040 NR form but when I was using a free software online, it generatee a 1040 form for me. I emailed that company about my situation,...

Tax Exemption for E-3 Visa [ 3 Answers ]

Hi, I am an Australian working and living in Manhattan on an E-3 visa. I believe I'm entitled to some tax exemptions however I am not sure what I am exempt from. Does anyone know? Any help would be greatly appreciated! Thanks!


View more questions Search