[seb007]

Hi,

I am from Belgium and I arrived in the USA for research under a J-1 visa.

My wife has a J-2 visa. She will work as an independent contractor. Her job will be to give some french classes in a public school. As she is an independent contractor, can she benefit from a tax withholding (Independent personal services, Belgium/US tax treaty Article 7) and fill the form 8233?

If she can, does she have to check the box line 10 of the form 8233 ("If you are a foreign student, trainee, professor/teacher or researcher, check this box")? I would say no, because she did not come in the US for the purpose of teaching (what is needed in the additional statement). But the next question is "Description of personal services you are providing".

Thanks for any help!

[AtlantaTaxExpert]

If she is working under a J-2 visa, she IS liable for state and federal income taxes and probably FICA (Social Security and Medicare) taxes as well.

This being the case, she should NOT submit Form 8233, as she is liable for taxes and thus subject to withholding.

[wnhough]

Yes. J2 visa holders are subject to FICA Taxes because in order for an individual to be exempt from FICA tax withholding under section 3121(b)(19), he/she must be:
Nonresident foreign national , Present in the U.S. under an F1, J1, M,1 or Q1 visa, or Performing services in accordance with the primary purpose of the visa's issuance.
So, J-2 visa holders working are not eligible for the section 3121(b)(19) exemption because the purpose for their visit to the U.S. is to accompany the primary visa holder, not to work.

[seb007]

Thanks for your quick and clear replies. Then, should she fill the form W8-BEN or W8-ECI (I'd say ECI as she works in the USA)?

Thanks!

[AtlantaTaxExpert]

There is no need to file ANY type of Form W-8, because she can claim NO treaty exemption. She will be taxed just like a U.S. citizen.

[seb007]

But she still needs to file a witholding form (without exemption). She received a W-9, but she can't fill it as it is only for residents, what she isn't. The IRS website specify that both J-1 and J-2 are considered as nonresident aliens for tax purposes. I agree that she must pay taxes, but which form does she need to fill for the witholding, as it is clearly specified that W9 is only for resident?

Thank you

[AtlantaTaxExpert]

If she files NO form and is a W-2 employee, then the employer will withhold all pertinent taxes (Social Security, Medicare, plus state and federal income tax).

If she is an independent contractor, then NO taxes will be withheld and she must "settle up" with the IRS come 15 April 2011 for the 2010 tax year, and subsequently start pay quarterly estimated taxes.

In either case, filing ANY form of Form W-8 (W-8BEN, W-8ECI) is a waste of time because it will have NO EFFECT on the bottom-line requirement of paying the taxes.