[Betatheta9]

Hi,

I am a citizen of Belgium and as such, I am entitled to a tax exemption of up to $9000/year. Currently, I'm a Purdue student, however I am doing an internship in GA. Now I have a few questions about the treaty.

I asked my financial advisor at Purdue and well, I know for a fact I'll get a full tax refund on my federal taxes. However, my advisor was unsure whether Georgia followed the federal lead on tax exemptions or not. So my first question is, will I get a tax refund on my Georgia taxes?

Something that surprised me was the fact that I had to pay FICA OASDI and Medicare. My financial advisor agreed I should not have to pay those since I am a student. I tried arguing with my firm, but no to avail. But nonetheless, my second question is can I get a return of FICA?

My third question (and this is not that important as it doesn't make a difference either way) is does the $9000 exemption include both federal and state taxes? With that I mean, do I get a $9000 tax exemption on my federal taxes AND a $9000 exemption on my state taxes?

[MukatA]

You did not tell what visa you are holding.
1. Every one on J1 is exempt from residency (and FICA taxes) for two years.
2. Every one on F1 is exempt from residency (and FICA taxes) for two years.
Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

I am not sure if the exemption amount is $9000. Read IRS publcation 901: Tax Treaties, page 19, col. 1 for Belgium at Internal Revenue Service.

States do not follow federal tax treaties.

[Betatheta9]

Sorry about that, I am a F-1 student.
And yes, the exemption amount is indeed $9000. I checked it on IRS publication 901.

So if states do not follow federal tax treaties, does that mean I won't get any refunds for the taxes I paid to the state of Georgia?

[MukatA]

In my answer about I made a mistake: F1 student is exempt for residency for 5-years.
For personal services, your deduction is $2,000. It is not $9,000. Please recheck.
You will file your 2008 tax return before April 15, 2009. If you have a refund, you will get the refund.

[AtlantaTaxExpert]

Betatheta9:

Georgia does NOT honor the treaty exemptions. That is not unusual; few states do.

You are considered a Georgia resident or non-resident based on your status as a visiting student from out-of-state. The fact that you are an international student is irrelevant.

More than likely, your student status make you a non-resident of Georgia.

However, you STILL must pay state income taxes on income earned within Georgia's state borders, which means filing Form 500 or 500-EZ just like every other Georgian.

BTW, if you are a F-1 student attending a U.S. college, your treaty exemption IS $2,000, NOT $9,000.

[Betatheta9]

Nope, my treaty exemption is $9000, not $2000. Admitted it was $2000 before, but the amount has been changed quite recently. If you don't believe, I suggest you take a look at the US-Belgian tax treaty (latest version, from 2006). Article 19, section b clearly states $9000.

I might have misinterpreted the $9000, but again, I advise you to take a look at section 19 and tell me I am wrong

Have a Good Day

BetaTheta9

[MukatA]

You may be right. My answer was based on IRS publication 901 (rev June 2007): Tax Treaties, and on the tax returns, we quote article number from the publication.

[AtlantaTaxExpert]

I just double-checked the treay itself and saw NO MENTION of any exemption in the amount of $9,000 (see link below).

http://www.irs.gov/pub/irs-trty/belgium.pdf

Based on the information provided, your exemption IS $2,000.