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    sgrig's Avatar
    sgrig Posts: 8, Reputation: 1
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    #1

    Mar 19, 2013, 06:17 AM
    Part year US-Germany tax treaty
    Hi,

    Since 2010 I've been in the US on a J-1 visa, working at US university, and I was eligible for the US-Germany tax treaty, so I didn't have to pay any federal taxes. However, the tax treaty is only valid for 2 years since the date of my arrival (August 2010), so as I understand I should have paid taxes since August 2012. However my university didn't withhold any taxes for the whole of 2012.

    So my question is, how do I file the 2012 tax return? My W-2 form has an empty box 1 (wages), and all of my income is reported on 1042-S. For 2012 I already pass the substantial presence test, so I can file as a resident alien (the US-Germany tax treaty does have an exception to the saving clause), so where do I specify the tax-exempt amount on form 1040? (In previous years I filed form 1040NR)

    Also, I first entered the US on my visa at the beginning of August 2010, but then returned to Germany, and re-entered at the end of August, just before my official start of employment on Sep 1 2010. So I'm wondering, from which date do I count the 2 year tax treaty period?

    Thanks a lot in advance for any advice!
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #2

    Mar 19, 2013, 06:57 AM
    Are you married?
    sgrig's Avatar
    sgrig Posts: 8, Reputation: 1
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    #3

    Mar 19, 2013, 06:58 AM
    Quote Originally Posted by AtlantaTaxExpert View Post
    Are you married??
    No, not yet. Why does this matter?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #4

    Mar 19, 2013, 07:11 AM
    Because you were exempt from the Substantial Presence Test while under the J-1 visa, so you will file a dual-status return for 2012.

    If you were married, you could file a joint return and choose to be treated as residents for all of 2012.
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    sgrig Posts: 8, Reputation: 1
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    #5

    Mar 19, 2013, 07:53 AM
    Oh right. Under the substantial presence test I was exempt for two calendar years (2010, 2011), so I assumed that since I was in the US for more than 183 days in 2012, I would file as a resident alien for 2012. Is that not so?

    However in any case, thanks to the tax treaty saving clause exception this shouldn't affect my tax treaty eligibility, right? So I guess my question was what is the correct way to split my income into the tax-exempt part (under the tax treaty) and the taxable part?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #6

    Mar 19, 2013, 09:58 AM
    Yes, that split is the reason for the dual-status return.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #7

    Mar 19, 2013, 10:00 AM
    BTW, the dual-status return is NOT FOR AMATEURS!

    Get professional help from a tax pro with dual-status experience
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    sgrig Posts: 8, Reputation: 1
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    #8

    Mar 19, 2013, 10:03 AM
    Thanks. It does seem to be a lot more confusing than I originally thought. Especially since I also had other income (stock, dividends, etc). It will be a nightmare splitting everything.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
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    #9

    Mar 20, 2013, 06:50 AM
    If you want MY professional hekp, email me at fhe enail address in my profile.
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