[franceska82]

Hi,
In March I'm going to start a Postdoc fellowship in Colorado. I have some question about the payment of taxes. I read in previous posts that for J1-students (who I am) there is an exemption.. so I'll not pay the taxes in USA. But in Italy? I pay the taxes for a USA salary? Moreover, from the based salary (before taxes), established in the contract there is typically about 10-15% tax that is automatically deducted from each month's pay check, are these taxes different from the taxes object of exemption? Could I have many information about the taxes and their processing?
Thank you,
Kind regards,
Francesca

[AtlantaTaxExpert]

Francesca:

You MAY or MAY NOT be eligible for a complete tax exemption of your fellowship income. It depends on HOW the institution in Colorado views your J-1 visa.

If you are considered to be a student, you likely WILL have to pay income taxes to both the IRS and the state of Colorado on at least part of the fellowship income, because the total tax exemption under the treaty applies ONLY to income which originates OUTSIDE of the United States.

If they view you as a researcher, then the fellowship income is considered to be completely tax-exempt for the period specified in the U.S.-Italy Tax Treaty.

You need to contact your sponsoring organization and ASK how they view your J-1 visa.

Regardless of whether you are a student or a researcher, you are exempt from FICA (Social Security and Medicare) taxes for 2011 and 2012.