[merc08]

Hi,

I am a citizen of the UK working in a university in London as a professor and researcher.
I spent the year 2007 - 2008 on H1b visa in Massachusetts and returned back to the UK in early 2008. I was able to claim an exemption from federal income tax under my country's tax treaty with the U.S. (Article 20).
Now, if I return to the US again on another H1B / J1 visa to work for 9-10 months at another US university, will I be able to once again claim an exemption from federal income tax as I did in 2007-2008? i.e. are there any restrictions on the number of times one can claim this exemption?

Thanks!

[MukatA]

On J1 visa for researcher or professor, there is no federal income tax for two years.

On H1-B you must pay SS tax, Medicare Tax and income taxes.
Your U.S. Tax Return: The U.S. Visas

[merc08]

On J1 visa for researcher or professor, there is no federal income tax for two years.

On H1-B you must pay SS tax, Medicare Tax and income taxes.
Your U.S. Tax Return: The U.S. Visas

Thanks a lot for your prompt response.
What I would like to know is whether there are any restrictions on the number of times a person can claim the federal tax exemption? (I may visit the US every 2-4 years for periods of 6-9 months, each time on a new J visa). Hence am wondering if I will be able to claim this exemption in the future too?

[MukatA]

Normally for J1 researcher each period is separate that is you will get exemption for your second J1.

For J1 researcher/professor from U.K. a J1 period stay must not exceed 2 years otherwise exemption is lost for entire period.
Read IRS Publication 901: Tax Treaties.

[Five Rings]

The quick answer is, as a teacher or researcher you may take this treaty exemption only once. Additionally, there is a six year lookback rule. The law is quite complex here.

See: Foreign Students and Scholars

[MukatA]

Five Rings:
Please read IRS Publication 901: Tax Treaties, page 15, Professors, Teachers and Researchers; para 2.
Also the word "exemption" means exemption from federal income tax.

[Five Rings]

Dear MuskatA,
Yes, what else would exemption mean under the circumstances. Shall we parse each sentence as if we were lawyers in tax court? I thought this was to be an effort to help the questioner. Save your lecturing for the amateurs.

Thank you for your reference to the publication; edifying.

Refer to the Tech. Explanation of the UK treaty
http://www.ustreas.gov/offices/tax-p...ry/teus-uk.pdf,
Pub. 519, and to foreign students and scholars.

This individual is no longer an exempt individual and becomes resident by substantial presence under the lookback rule.

Counting Years of Exemption (See Pub 678-FS)
Chart 1B, page 1-5

The professor must at least satisfy the competent authority as to closer connection if he wishes to dodge the bullet..

[merc08]

Dear MuskatA and Five Rings,
https://www.askmehelpdesk.com/newreply.php
Thanks for your inputs. I did look up all various docs, pub 901, teus-uk.pdf as well as Pub 678-FS. It appears that the word 'exempt' has 2 meanings - 1. Exempt from federal/state/FICA taxes 2. Exemption for the substantial presence test (in order to determine residency status).
It's the exemption from taxes bit that I am interested in (regardless of whether the person is an exempt individual for purposes of the substantial presence test - SPT) and the treaty only mentions that the person needs to be a resident in his home country prior to his short visit to the other country (to claim the tax benefit).
I think that, whether the person is exempt from the SPT, it appears that he will still be eligible to claim the federal tax exemption so long as he was clearly a resident in this home country prior to his arrival in the USA.

Once again, thank you very much. I appreciate.

[merc08]

Also, in publication p901, I just read through the similar tax treaty for professors, teachers and researchers that the US has with France, just like it does with the UK.
Under the France section, its clearly mentioned that 'an individual may claim this benefit only once'. While the same hasn't been mentioned for the UK.
So a resident from the UK can claim this benefit again, as long as he was resident in the UK prior to his arrival in the US.

[MukatA]

Dear MuskatA,
Yes, what else would exemption mean under the circumstances. Shall we parse each sentence as if we were lawyers in tax court? I thought this was to be an effort to help the questioner. Save your lecturing for the amateurs.

Thank you for your reference to the publication; edifying.

Refer to the Tech. Explanation of the UK treaty
http://www.ustreas.gov/offices/tax-p...ry/teus-uk.pdf,
Pub. 519, and to foreign students and scholars.

This individual is no longer an exempt individual and becomes resident by substantial presence under the lookback rule.

Counting Years of Exemption (See Pub 678-FS)
Chart 1B, page 1-5

The professor must at least satisfy the competent authority as to closer connection if he wishes to dodge the bullet..

Please make sure to spell my username correctly.
Also, when I explained the word "exempt", I never had in my mind that I am explaining to an amateur. From your very first post on this forum, any one can guess that you know a lot about taxes. I am sure, much more than what I know about taxes.

[Five Rings]

First, my apologies to the distinguished MukatA for misspelling his username. How careless of me.

Second, and speaking of careless, the UK treaty does exclude the word "...may take this benefit only once"

As Merc08 points out the French treaty has this caution as does the Portuguese. I had just finished such a situation for a Portuguese professor teaching at MIT.

It all goes to show that while there is a family resemblance between all US treaties there are important differences. Then there is that little bit at the end of para. 1 of the TE which directs the person to satisfy the competent authority as to the re-establishment of his UK residence. See: Competent Authority Assistance or contact the IRS attaché in London Tel: [44] (207) 894-0476

I comfort myself with the old chinese expression that "even monkeys fall from trees"