[leggles]

Hi,

I have been on a J1 visa since October 2011 and not paying Social Security and Medicare taxes. I will be switching to a H1B visa under a change of status in October 2012 and will then pay these taxes.

When I file taxes for the year 2012, I will meet the substantial presence test for 2012 so I will be able to file as a resident. I am wondering if I will then be charged the year's worth of Social Security and Medicare tax? I was told this by an acquaintance who also went through this visa change. Is there any additional form I can file or to explain that I was on a J1 until October 2012?

If this is the case, should I begin paying SS and Medicare now?

Thanks.

[AtlantaTaxExpert]

You become liable for FICA (Social Security and Medicare) taxes the day your H-1B visa becomes effective. Prior to that, you are NOT liable for these taxes and should NOT pay them even if you file as a resident alien.

BTW, you will file as a resident ONLY IF you are married. If you are single, you will file as a dual-status alien.

[leggles]

Thank you. I am single.

From researching dual-status, this means that I file both 1040NR and a normal resident form, with 'dual status' written across the top of the forms? Do I need to split the details from my W2 between both forms?

Thanks again.

[AtlantaTaxExpert]

No, it is NOT that simple.

The dual-status return is NOT for amateurs; get professional help.

If you want MY help, email me at the email address in my profile (providing you cannot see my email address below).

[leggles]

Hi,

I will only have one w2 form which will contain all earnings for 2012. This will include the salary I earned on the J1 visa, plus the new salary of the H1B visa. I am planning to get professional help, but I am just wondering how things are worked out if there is only one w2 form?

Thanks!

[newacct]

Wait a minute. How do you think you meet the substantial presence test for 2012?

[leggles]

Wait a minute. How do you think you meet the substantial presence test for 2012?

Sorry, I believe I am classed as a Resident for Tax purposes because I am not exempt from the substantial presence test for 2012. Form 8843 http://www.irs.gov/pub/irs-pdf/f8843.pdf instructions state:

Exception. If you were exempt as a teacher, trainee, or student for any part of 2 of the 6 prior calendar years, you can exclude days of presence in 2012 as a teacher or trainee only if all four of the following apply.
1. You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 prior calendar years.
2. A foreign employer paid all your compensation during 2012.
3. You were present in the United States as a teacher or trainee in any of the 6 prior years.
4. A foreign employer paid all of your compensation during each of those prior 6 years you were present in the United States as a teacher or trainee.

I was on a J1 visa from October 2011 to September 30 2012 and was an intern of a US employer. So, I would be correct in that I met the Substantial Presence Test?

[newacct]

But you were NOT "exempt as a teacher, trainee, or student for any part of 2 of the 6 prior calendar years". You were exempt for 1 previous year, 2011. (Unless you were exempt for a recent previous stay in the U.S.)

Sorry, I believe I am classed as a Resident for Tax purposes because I am not exempt from the substantial presence test for 2012. Form 8843 http://www.irs.gov/pub/irs-pdf/f8843.pdf instructions state:

Exception. If you were exempt as a teacher, trainee, or student for any part of 2 of the 6 prior calendar years, you can exclude days of presence in 2012 as a teacher or trainee only if all four of the following apply.
1. You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 prior calendar years.
2. A foreign employer paid all your compensation during 2012.
3. You were present in the United States as a teacher or trainee in any of the 6 prior years.
4. A foreign employer paid all of your compensation during each of those prior 6 years you were present in the United States as a teacher or trainee.

I was on a J1 visa from October 2011 to September 30 2012 and was an intern of a US employer. So, I would be correct in that I met the Substantial Presence Test?

Basically, the rule says that teachers and trainees are generally only exempt for the first 2 calendar years, unless the special exceptions above apply (and you're saying they don't apply to you).

[leggles]

Ok, thanks for your help. It is correct that I am exempt for 1 previous year (2011). I find the tax system quite confusing still and will be seeking a professional for help in tax preparation in the coming months. Thanks again!

[newacct]

Yeah. Note that you may still be able to choose to file as dual-status, by using the first-year choice, if I remember correctly. But to do that you will have to delay filing taxes (get an extension), and then wait to file until after you meet the substantial presence test in 2013. But I am not sure if that has any benefit for you.

[AtlantaTaxExpert]

If you arrived in October 2011, then converted to H-1b in October 2012, you have the option to file dual-status, but you would have to wait until 1 June 2013 to file.

However, there is likely no tax advantage to file dual-status and, by filing as a non-resident alien, you can file as soon as you get your W-2.

If you use my services, I will prepare the return BOTH ways to be sure. Email me if you are interested.

[leggles]

Hi, I have a question about the 1040NR. There is the question 'In what country did you claim residence for tax purposes during the tax year?' I lived in the U.S. for all of 2012 although I am classed as a NR because my time on J1 visa is exempt. Can I say United States for this question or should I put my home country?

[AtlantaTaxExpert]

Put your home country.