[bill0610]

Hi,

I study for 5 years in USA for F1 visa and plan to start another job in USA as J1 visa. My place of birth is Hong Kong. It is part of China now. Am I eligible for tax treaty and exempt from tax for 2 years?

Thank you,

Bill

[AtlantaTaxExpert]

Bill:

Sorry, but the two-year tax exemption does NOT apply if the J-1 was preceded by five years or more of F-1 visa status.

You MAY be eligible for the China Tax Treaty, which gives you a $5,000 tax exemption. Depends on the timing of when you first arrived in the U.S.

[MukatA]

1. F1 and/or J1 visa are nonresidents for 5 years. After 5 years they are presumed to be resident for tax purpose. That means after 5 years they must pay FICA taxes.

2. Even during the 5 years, income from personal services performed in the United States is taxable.

During these years (as nonresident) you are not allowed standard deduction, and can only have personal exemption.

3. Students in F-1 status are subject to all other taxes that may apply: federal, state and local.
The F-1 visa holder must file Form 8843 (Statement for Exempt Individuals and Individuals with a Medical Condition) either with your tax return (Form 1040NR/1040NR-EZ), or by itself if you do not have to file a tax return.

[The Texas Tax Expert]

The treaty between the US and China does not apply to Hong Kong. Hong Kong signs its own treaties.

[MukatA]

Yes, the treaty between the U.S. and China does not apply to Hong Kong.

This is what I have found: To date, Hong Kong has no comprehensive double tax treaties with most countries in the world. Tax relief arrangements have been made only in respect of international shipping and aircraft income. It has been announced, however, that comprehensive double tax treaties will be negotiated and concluded with selected countries in the near future.
It means that during first 5 years of F1 visa, a Hong Kong resident can't deduct even $5,000. They can't use Form 8843.

[AtlantaTaxExpert]

The Form 8843 is an INFORMATION return that ALL J-1 and F-1 visa holders must file (even if they do NOT file a tax return), regardless of their country of origin.

[MukatA]

Yes, all J-1 and F-1 visa holders must file Form 8843

[The Texas Tax Expert]

IF you have already exceeded the exempt period (which appears to be the case in your situation), then you are a resident and you do not need to file a Form 8843.

[AtlantaTaxExpert]

Agree with TTE. If you file as a resident alien (Form 1040/1040A/1040EZ), then Form 8843 is NOT required.