[martinam]

Hello,
I have a question related to the non-resident alien/resident alien problems. More in detail, I have a question about the two years agreement between USA and my country Italy.

I briefly describe my situation: I am an Italian citizen. I arrived in the US first time in June 2005 with a J-1 VISA and I spend 4 months there. I spend other 3 months in 2007 with a J-1 visa. Both times I was in the US supported from my Italian university. Last July 2010 I moved in the US for a 2-years post-doc, again with a J-1.
My employer said that I’m not eligible for tax exemption. I did pay SIT, FIT and WC taxes in 2010 but not SS and medicare because I was considered non-resident.
My specific question, now that I’m filling my 2010 tax return having my W2, is: counting the months that I spend in US with a J-1 visa before 2010 I’m still below the 2 years, then should I be considered tax exempt for that period? In particular, the 2 years agreement with Italy is considered 2 consecutive years after the first entry in the US with a J1, or the total of 2 years can be the sum of total months among more years?
Thanks in advance for consider my questions
martinam

[taxesforaliens]

You cannot claim a treaty exemption as a J1 scholar if you have been exempt 2 or more years of the last 6 years (not counting the current year0. You were exempt in 2005 and 2007, so you cannot claim an exemption now.

[martinam]

Thank you taxesforaliens,
So it is 2 consecutive years from the first time you enter the US with a J-1. Does it change something if both for the 4 months in 2005 and the 3 in 2007 I was paid by Italy I did not fill any tax forms?
Thanks again

[taxesforaliens]

No, that doesn't change anything.

[AtlantaTaxExpert]

I see no provision in the U.S.-Italy Tax Treaty that specifies that a previous J-1 visit or previous time as a F-1 student counting against the two-year exemption period.

That being the case, I recommend to file Form 1040NR with a Form 8833 and ask for the exemption direct from the IRS. All they can do is say NO!

If you need professional help filing your return, email me at [email protected] or [email protected].

[martinam]

Thank you AtlantaTaxExpert.
I pretty much figured out everything on the 1040 NR EZ and on 8843. In your answer you mention ask directly IRS for exemption, do you mean fill them as I'm considered exempt or refer someone at IRS or similar?
Thanks

[lmlprice]

Hi, I am a US citizen and will be teaching in Italy one week and will receive compensation. The Italian University intends to tax my earnings but do ask me if I intend to take advantage of a law/tready to avoid double taxation.

Would the provision be the Italy/USA tax treaty (how whould I state this provision)?

Is there a provision in the Italy/US tax treaty I can refer to so as not to get taxed in Italy but only in the USA?

Would this provision allow for a lower tax in Italy? Or Is this applicable only when I file my taxes in the USA.

[AtlantaTaxExpert]

Italy has first rights to tax Income earned within Italian borders.

You will declare that Income and file Form 1116 to claim the Foreign Tax Credit on
Italian taxes paid.