[manojkalyan]

I had moved back to India in early 2009 and continue to work with the same organization in their Indian Office. I had got my incentive for 2009 paid out along with my India salary in 2010 and was not aware of a W2 being generated for 2010 (did not compute and figure out the tax being withheld in US). Which form should I file for 2010? I


In 2011, I sold some of my stocks and had taxes withheld in both India and US (since I was allotted the shares when in US and I sold it when in India). I want to claim double taxation relief in US. Should I file 1040 NR EZ and 1116 or only either of them?

[AtlantaTaxExpert]

For 2010, if you lived and worked in India and were NEVER in the United States in 2010, then ALL of the W-2 salary for 2010 is EXEMPT from U.S. income taxes. File Form 1040NR-EZ and Form 8833 claiming exempt status under the U.S.-India Tax Treaty to get a FULL refund of the federal (and state) incoime taxes withheld. The state tax exemption is because you were NEVER in the state in 2010 and, since you no longer maintain a home there, the state has NO LEGAL STANDING to tax your income.

For 2010, you theoretically are also exempt from FICA (Social Security and Medicare) taxes, but you have to sell that argument to the IRS using Form 843 and 8316. That MIGHT be a tough sell.

For 2011, the stock sales are CLEARLY exempt from U.S. taxation because you were never physically located in the U.S. even if you bought the stocks while you were in the U.S. prior to 2011. The only time it MAY be taxable is if you received the stock as part of a stock option plan. In that case, it is considered to be deferred compensation. You would need to file Forms 1040NR and 8833.

If you need professional help with this, email me at the email address in my profile if you cannot see it below.