[IJMacleod]

Hi,

I contacted the IRS about the question but they've had to go do some research.

My contract started on January 1st 2008 and I left the USA on December 11th 2009. However, I entered the USA on my J-1 research visa on December 28th 2007.

My employer has counted those 4 days of 2007 as part of the two-year substantial presence exemption for J-1 researchers. I wasn't aware that I should have filed Form 8843 for those four days.

In 2008 I filed the 1040NR-EZ. My two questions are:

a) should I file the 1040NR-EZ again for 2009, despite my employer's insistence that I'm a resident alien for 2009.

b) how do I get my FICA taxes back for 2009? My employer won't release them. Should I file Form 843 just now?

Many thanks!

Iain

[MukatA]

What is your citizenship? We need to go through the tax treaty.

[IJMacleod]

I'm British.

I've gone through the tax treaty and that hasn't been the problem. From what I can determine, the tax treaty benefits seem to be from the date I enter (12/28/07) to the date I leave (12/11/09), and as long as I didn't stay longer than 12/28/09, I wouldn't have violated the two-year stay.

My employer hasn't withheld Federal or State income tax because of this. My main problem lies with my FICA taxes, with my status as a non-resident being determined by the substantial presence test. Being a J-1 researcher, I got two years exemption, but according to my employer, as I was on US soil for 4 days in 2007 before starting my job, I was present for the tax year 2007, and that counts as one of the two years of exemption.

I'm thinking that I should have filed Form 8843 during the 2008 tax return season, but as I had no W2 and no income in 2007 (and only being in the USA for 4 days) I hadn't realised it was necessary.

So I'm trying to find out if I can make 2008 and 2009 my two years of exemption for the substantial presence test and get my FICA taxes back.

Thanks for your help.
Iain

[MukatA]

No you will not get FICA taxes for 2009.

[IJMacleod]

Um... any explanation as to why? Can I not retroactively submit the Form 8843. If I had submitted that then 2007 would have had no impact on the substantial presence test.

[IJMacleod]

What about the Closer Connection Exception?

[MukatA]

May be you should send an email to AtlantaTaxExpert and get his opinion.

[IJMacleod]

I will do - thank you for your help.

[Five Rings]

Your employer is incorrect. Your two year period begins on the date of your arrival in the US. The Technical Explanation to the US/UK treaty is quite plain on this matter:
Article 20A (Teachers)
Paragraph 1
Paragraph 1 of Article 20A provides that a professor or teacher who visits one of the Contracting States for a period not exceeding two years, for the purpose of teaching or engaging in research at a university, college, or other recognized educational institution in that Contracting State, and who is immediately before that visit a resident of the other Contracting State, will be exempted from tax by the first-mentioned Contracting State on any remuneration for such teaching or research for a period not exceeding two years from the date he first visits that State for the purpose of teaching or engaging in research. Since this two year period is determined from the date he first visits the Contracting State, periodic vacations outside the first-mentioned Contracting State, or a brief return to the other Contracting State will not toll the running of the two year period. Like the existing Convention, if the two-year period beginning from the date of his arrival is exceeded, the exemption will be lost retroactively. Thus, if a person comes to a Contracting State for the purpose of teaching and stays for a period in excess of two years, the exemption will not apply for the first two years.
A person who meets the qualifications for this exemption may again claim its benefits if he first re-establishes his residence in the other Contracting State. In such case, the person claiming these benefits on a subsequent occasion must first satisfy the competent authority of the first-mentioned Contracting State that he had become a resident of the other State for a substantial period (normally at least one year).