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nkhadge · Dec 11, 2007, 10:27 AM

I recently became Permanent Resident. I am still working under H1B. How would that affect my tax bracket from H1B to GC if I use my EAD number? If someone could give me a clear picture of how it works, I would appreciate it.

AtlantaTaxExpert · Dec 11, 2007, 02:01 PM

This is a question that should be posted on the LAW Forum under immigration law, because, In my opinion, if you have a Green Card, then your EAD number is irrelevant.

That said, your tax bracket should NOT change, because resident aliens are taxed EXACTLY the same as U.S. citizens. They can claim the same credits and deductions, and pay taxes at the same tax rates.

The ONLY exception that I know of is that tax returns with an ITIN (instead of a SSN) on it are NOT eligible for the Earned Income Credit.

MukatA · Dec 12, 2007, 01:03 AM

H1-B visa holder, if in the U.S. for 183 days or more, normally files as resident alien Form 1040EZ/1040A/1040. As a permanent resident, you still file 1040EZ/1040A/1040. And as AtlantaTaxExpert said now you will use SSN and not ITIN, and may even get EIC.

AtlantaTaxExpert · Dec 12, 2007, 09:19 AM

MukatA:

A holder of a H-1 or H-1B visa for more than 183 days will NOT normally file as a resident alien.

In fact, if a visa holder is single and is a non-resident alien for EVEN ONE DAY, he/she can NOT file as a resident alien. They must file a dual-status tax return.

MukatA · Dec 13, 2007, 06:23 AM

I was under the impression that you can file dual status tax return only in the year you arrive in the U.S. or the year you leave the U.S.

AtlantaTaxExpert · Dec 13, 2007, 08:40 AM

A person who is converting from a F-1/J-1 visa to H-1/H-1B is, for all intents and purposes, arriving in country for the first time. That is because their days under the J-1/F-1 visa are "exempt" from the Substantial Presence Test (SPT).

Further, if they convert before 1 July, they WILL meet the SPT, which means the MUST file a dual-status return.

If they convert AFTER 1 July, they will NOT meet SPT, which means they CAN report dual-status, but are NOT required to. They can report as a non-resident alien, which is a MUCH simpler way to report and normally results in paying the SAME amount in taxes, and it allows them to file as soon after 1 Januaty as possible.

If you file dual-status and have not MET SPT, you must wait to meet SPT before you can file dual-status.

Clear as mud, right? These little facts-of-life are not clearly explained by IRS Pub 519, so relying on that pub exclusively for all of the answers will lead you to make some incorrect conclusions.