[seymar]

Hello,
I have a question about the tax treaty.
I'm a young physics researcher with a post-doc position at Texas A&M University (J1 visa). I'll start to work on November for 2 years.
I would like to have some informations about the tax treaty with Italy. Shell I pay taxes? In Texas or in Italy? What shell I exactly do?
Thanks for your help

Paola

[AtlantaTaxExpert]

Paola:

For sure, you are exempt from federal income taxes and FICA (Social Security and Medicare) taxes for 2009 and 2010. Texas has NO state income tax. I cannot comment for sure on whether Italy will tax your post-doc pay, but I doubt it.

Since the tax treaty does not specify that the two-year period starts from date of arrival, your exemption period will be for ONLY 2009 and 2010. Starting on 1 January 2011, you become liable for federal income and FICA taxes as a resident alien.

There is no retroactive tax provision in the treaty, so if you stay beyond the two-year period, you do not loss the tax exemption after taking it.

Tax-wise, it would be best if you could delay coming to Texas A&M until early January 2010 in order to make your exempt years for 2010 and 2011.

[seymar]

Thank you very much for your help!
I've one more question about your answer: you suggest me to delay my coming to Texas at the beginning of January 2010 to be exempt from federal taxes for 2010 and 2011. But shell I move to Texas necessary in 2010, or is it enough if I get my first salary in 2010? For the exemption, do they look at my arrival date in the States? Or at the date of my first salary?
Thanks for your help!
Best regards
Paola

[AtlantaTaxExpert]

The tax exemption is based on your physical arrival, so if you get off the plane anytime in 2009, it burns the entire year.

[seymar]

Thank you very much for your help!
Cheers
Paola

[AtlantaTaxExpert]

Glad to help!