[kondor]

Hi,
I am currently on J-1 from Israel. Under tax-treaty I am not paying taxes for my first two years.
I know that for some countries, there is a retroactive loss of benefits, if the two-year time limit in the U.S. is exceeded.
Is there such loss provision for Israel?

And if yes, if I change my status from J1 to H1B before end of my two-years (I am NOT subject to 2-year Foreign Residency Requirement) - will I still need to retroactively repay taxes?

Thank you

[AtlantaTaxExpert]

No, there is NO retroactive tax provision in the U.S.-Israel Tax Treaty for J-1 visa holders who are teachers are researchers.

However, not all J-1 visa holders are teachers and researchers. They can be students, apprentices, trainees or interns. If so, they are NOT tax-exempt.

[kondor]

No, there is NO retroactive tax provision in the U.S.-Israel Tax Treaty for J-1 visa holders who are teachers are researchers.

However, not all J-1 visa holders are teachers and researchers. They can be students, apprentices, trainees or interns. If so, they are NOT tax-exempt.

Thank you. I am a researcher.
And can you please then tell if there is any benefit of staying on J1 vs H1b past tax-exempt period (except the ability of dependents to receive work permit on J2 vs H4)?

[AtlantaTaxExpert]

Other than work permit, there IS no benefit to stay on J-1 status.

Once you hit the two-year point on the J-1 visa, you become a resident for tax purposes.