[fuzi]

Hi,

I came to US in April 1st, 2006, working in a state university as postdoc, and holding J1 visa until now. I became Resident alien from Jan. 1st, 2008, and the payroll office started to withhold the FICA tax, which is reasible and I can understand. According to the US-China treaty, there is three-year exemption for the Chinese scholar, but what I can't undstand is, the payroll started to withhold the federal and state tax from Jan 1st, 2009, I think the withhold should start at April 1st, 2009, when there is three-year period for me to stay in US but not a three calendar year, what do you think? Thanks

Another question about 2008 tax return, my wife also came here in Oct. 2006, and started to work in 2007, and last year we file the tax return separately. This year we want to file the 2008 tax jointly, do you think it is a good idea? Because I have tax exemption, How can we file the tax together, and I can get the expemtion and she get the standard deduction? Thanks for your time, looking forward to your kind reply!

[AtlantaTaxExpert]

The treaty exemption is for three years "in the aggregate", which means three calendar years. Hence, your treaty exemption ended on 31 December 2008.

If you file jointly with your wife, In my opinion you LOSE the treaty exemption. You should file separately for 2008.

Your wife can file Married Filing Separately and claim your personal exemption, however. Since, by treaty, you have NO taxable income within the U.S.

[beanman]

@AtlantaTaxExpert,

>If you file jointly with your wife, In my opinion you LOSE the treaty exemption. You should file separately for 2008.


I'm curious as to why filing jointly should affect the treaty exemption, as the status of the spouse has not changed.
Thanks for your advice!

[AtlantaTaxExpert]

Back in 2009, that IS what I believed.

I have since revised my assessment. He could have filed jointly and still claim the treaty exemption for 2008.

[beanman]

@AtlantaTaxExpert,
He could have filed jointly and still claim the treaty exemption for 2008.

Thanks for your quick reply and expert opinion. Good to know.
While we're on the topic, do you still maintain that the three years in the aggregate are calendar years? I have heard different views on this (three years from the date of arrival) and am curious as to your opinion.
Thanks!

[AtlantaTaxExpert]

It IS calendar years. If it was meant to be three years as in 36 consecutive months, the wording would have said three years from the date of arrival.

[beanman]

@AtlantaTaxExpert,
It IS calendar years. If it was meant to be three years as in 36 consecutive months, the wording would have said three years from the date of arrival.

Thanks for explaining your reasoning. For what it's worth, I believe that it could not say three years "from the date of arrival", since this would (mistakenly) exclude cases where someone took a break and went back to China for a year, etc. The term "in the aggregate" means the years need not be consecutive.

[AtlantaTaxExpert]

The words "from the date of arrival" can be found in multiple other tax treaties for tax exemptions for scholars, researchers and teachers.