[ellen9]

Dear,

I am a Belgian citizen, currently enrolled at a US University with a J1 student visa.

I am graduating this semester and I am applying for Academic Training since I got a job offer from a professor to do research for him. I am trying to calculate if I will be able to cover all my expenses with the pay I get from this job. During this job, I will still be here on my student visa since I can extent it for up to 18 months for "Academic Training".

I do not understand the tax treaty between the US and Belgium. I have been in the US since Augusts 2008.
From my understanding, the first $9,000 is not taxable in the US (but it is taxable in Belgium?) and everything above $9,000 is taxable in both countries (so I will be paying roughly 50% tax in Belgium + 20% in US = total of 70% tax!! ).

Will I have to pay 70% tax? It is important to know because if that is the case I cannot effort it. Or do I only file my income in the US and only pay US taxes?

I have been to the Non-resident taxation coordinator on campus, the international student advisor and the IRS office, I also called the Belgian embassy in Atlanta. None of them could help me with this issue about US taxes and Belgium taxes.


I would really appreciate your help,
Thanks,

[AtlantaTaxExpert]

Typically, income earned in the United States is NOT subject to the home country income tax.

Article 14 of the Tax Treaty so states that; extract below; note item in red.

1. Subject to the provisions of Articles 15 (Directors' Fees), 17 (Pensions, Social Security, Annuities, Alimony, and Child Support), 18 (Government Service) and 19 (Students, Trainees, Teachers and Researchers), salaries, wages, and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

BOTTOM LINE: your research income is NOT subject to Belgium taxes.

Further, you DO get a $9,000 treaty exemption on your U.S. tax return (Form 1040NR or 1040NR-EZ) under Article 19(b). Nowhere in the treaty does it say that the $9,000 is subject to Belgium taxes, so, unless you have other income from Belgium sources, there is NO Belgium income tax due at all.