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tax_confused · Jan 28, 2010, 06:40 PM

Hello tax-community!

I have read the definition 100 times but I still cannot figure out if I am a resident or a dual-status alien. Here is my situation:

From Oct. 1 2007 to Sept. 30 2008 I worked as a research scholar under J1 visa.

On Oct. 1 2008 I changed my status from J1 to H1B. Since then, I have the H1B status.

What complicates my situation is that I traveled to my home country between Dec. 13 2008 and Jan. 16 2009.

In 2007 and 2008 I did not comply with the substantial presence test, so I filed as a non-resident alien. 2009 is the first time I comply with the substantial presence test. Does the fact that I was not in the US on Jan. 1 2009 make me a dual-status alien?

MukatA · Jan 29, 2010, 01:25 AM

When did you enter the U.S.
Unless you have completed two years on J1 that is you entered the U.S. in 2008, you will file nonresident tax return for 2009.
On J1 everyone is exempt from residency for two years. Your U.S. Tax Return: The U.S. Visas

tax_confused · Jan 29, 2010, 08:49 AM

Let me explain:

I first entered the US in Sept. 2007. I was on J1 for (parts of) two years:
- Sep. 2007- Dec. 31 2007
- Jan. 1 2008 - Sep. 30 2008

My status changed on Oct 2008 from J1 to H1B. I did not leave the country at that point (which is totally legal).
I left the country on Dec. 13 2008 for vacation.
I re-entered in the US on Jan. 16 2009.

Do you still think I am a non-resident for 2009?

MukatA · Jan 30, 2010, 04:25 AM

You changed to H1-B in October 2008 so you are resident for 2009.
In my previous posting I missed that you changed to H1-B in October 2008.

IntlTax · Jan 30, 2010, 05:29 AM

Yes. I believe you are dual status for 2009 with your residency start date on Jan. 19th.

AtlantaTaxExpert · Feb 17, 2010, 02:53 PM

I have to respectfully disagree with IntlTax. The H-1B status started on 1 October 2008, so the OP was in H-1B status for ALL of 2009. He met the Substantial Presence Test in 2009, and therefore would file as a resident alien for 2009.

He COULD file as a dual-status alien for 2008 under First Year Choice by waiting until 1 June 2009 to file his 2008 return, but there is probably NOTHING to be gained tax-wise by doing this, so he would file as a non-resident alien for 2008.

IntlTax · Feb 18, 2010, 08:05 AM

The following is an excerpt from Page 8 of IRS Publication 519:

First Year of Residency

If you are a U.S. resident for the calendar year, but you were not a U.S. resident at any time during the preceding calendar year, you are a U.S. resident only for the part of the calendar year that begins on the residency starting date. You are a nonresident alien for the part of the year before that date.

Residency starting date under substantial presence test. If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year. * * *

* * *

Residency during the preceding year. If you were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be considered a U.S. resident at the beginning of the current year. This applies whether you are a resident under the substantial presence test or green card test.

ATE, how do you read a residency starting date of January 1, 2009 out of this language?

tax_confused · Mar 1, 2010, 01:23 PM

If the experts cannot decide, my situation must be really confusing...

ATE, any update after IT's response?

AtlantaTaxExpert · Apr 26, 2010, 12:48 PM

Sorry for the late answer; it has been a BUSY tax season!

I read that his H-1B status started on 1 October 2008. The temporary departure from the country from 13 Dec 08 through 18 Jan 09 does not affect his residency status at the beginning of 2009 because he WAS resident from 1 Oct through 12 Dec 08.

This being the case, he should file as a resident alien for 2009 under Continuous Presence.

IntlTax · Apr 26, 2010, 02:14 PM

I don't disagree that the H1-B status started on oct. 1, 2008. However, residency did not start on that date. The OP was a nonresident for 2008.

Treas. Reg. 301.7701(b)-4(a)(1) provides in part:

An alien individual who was not a United States resident during the preceding calendar year and who is a United States resident for the current year will begin to be a resident for tax purposes on the alien's residency starting date. The residency starting date for an alien who meets the substantial presence test is the first day during the calendar year on which the individual is present in the United States.

The OP was not a United States resident during the preceding calendar year (2008) and was a United States resident for the current year (2009) under the substantial presence test. Consequently, he will begin to be a resident for tax purposes on the first day during the calendar year (2009) on which the individual is present in the United States. The first day of presence in the U.S. was January 19th. How could he have been a resident on January 18th, 2009 prior to his residency starting date?

There are way too many inaccuracies on this bulletin board for me to correct even a small portion of them. The emphasis seems to be on the quantity of answers much more than on the quality of answers.

mack20007 · Apr 27, 2010, 03:15 AM

I agree with IntlTax, this gentlemen residency start date is no doubt, Jan.16th 2009 Per pub 519, under residency start date, it's the first day he's physically present under the sub pres test.

It would be Jan 1, 2009 if he had a residency time in 2008, but he doesn't.

Your correct Atlanta he resided in the US from Oct. through Dec. of 2008, but that does not make him a "resident for tax purposes", which can only be met through the sub. Presc. Test, 183 days, or the green card test. What basis are you determining him to be a resident in 2008?

The fact that he has and H1B visa doesn't "make" him a resident, no document does, he has to meet the sub pres test-183 days.

The questioner, tax-confused, actually already knows this, as he states, he filed as a NRA for 2008. His question is what's my residency start date in 2009.

I agree with Intltax on this his residency start date is Jan 16, 2009

mack20007 · Apr 27, 2010, 03:23 AM

I agree with IntlTax, this gentlemen residency start date is no doubt, Jan.16th 2009 Per pub 519, under residency start date, it's the first day he's physically present under the sub pres test.

It would be Jan 1, 2009 if he had a residency time in 2008, but he doesn't.

Your correct Atlanta he resided in the US from Oct. through Dec. of 2008, but that does not make him a "resident for tax purposes", which can only be met through the sub. Presc. Test, 183 days, or the green card test. What basis are you determining him to be a resident in 2008?

The fact that he has and H1B visa doesn't "make" him a resident, no document does, he has to meet the sub pres test-183 days.

The questioner, tax-confused, actually already knows this, as he states, he filed as a NRA for 2008. His question is what's my residency start date in 2009.

I agree with Intltax on this his residency start date is Jan 16, 2009

AtlantaTaxExpert · Apr 27, 2010, 01:02 PM

Okay, assuming what you are saying is true, then the ONLY way for the OP to file as a resident in 2009, he would have to amend his 2008 return and file dual-status under First Year Choice for 2008 in order to qualify to file as a resident for 2009?

All because he took a vacation to India, even though he was under the H-1B visa since 1 October 2008?

While I am all for dispassionate, accurate advice in accordnace with the tax law, it seems that, in this case, the client has clearly met the Substantial Presence Test for 2009 and should, by all intent of the tax law, be allowed to file as a resident alien.