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ml1023 · Feb 20, 2007, 02:28 PM

HI,
I've been reading some of the postings, but still confused.
I was on F1 from June 2002 to Dec 2005.
I was on OPT from DEC 2005 to Oct 2006, and H1 from OCT 2006 and on.
I'm a Chinese citizen, married and my wife is on H4.
I filed 1040nr last year.
Can I file as a resident (married file jointly) for 2006? I get very little benefit if file as non-resident.

Also I paid for my wife's tuition, could I get the education credit?

Thanks

AtlantaTaxExpert · Feb 20, 2007, 11:37 PM

Yes, you can file jointly with your wife as resident aliens, but you must wait until June to file. You WILL be able to claim the education credit.

taxsearcher · Feb 21, 2007, 06:08 AM

Also note that if you elect to be residents, the social security tax would apply to the OPT earnings (unless there is another exemption under which they qualify).

AtlantaTaxExpert · Feb 21, 2007, 10:58 AM

What TaxSearcher says is true.

ml1023 · Feb 21, 2007, 12:28 PM

Thanks for your answers

Could you guys elaborate on the social security and medicare issue.

My company didn't withheld my social security and medicare for the time I was in OPT status. Does that mean I have to pay it if I elect to file as residents?

Thanks

AtlantaTaxExpert · Feb 22, 2007, 11:40 AM

Perhaps.

You would have the legal obligation to inform your employer that you have chosen to file as a resident alien for 2006. This technically would make you liable for Social Security and Medicare taxes for 2006 as well.

However, your employer may NOT want to revisit that issue, because he would have to amend his last filing for Form 941 and pay the taxes for you for the entire year, then collect your share of these taxes. He would be subject to some significant fines and late-payment penalties from the IRS.

Tell your employer that you are filing as a resident alien for 2006. I suspect that he would simply implement the Social Security and Medicare withholdings retroactive to 1 January 2007, and leave it at that. While that may not be the technically correct way to handle the problem, that is NOT your concern.