Hello,

I am trying to figure out a complicated situation. I am a German citizen who came to the US in 2011 as an F1 student. I was on F1 (incl. OPT) up until September 2014, then changed to an H1B visa in October 2014, which I picked up in Germany. In 2009, I was already here as an F-1 student for a semester - I left the US on January 1, 2010 and did not come back until Summer 2011 (for a completely different program/degree)

1) I used the German tax treaty for my income in 2011/2012. I know this is good for 4 years and if I stay longer than 4 years, I have to pay taxes retroactively. This would be my 4th year and I am wondering if I have to pay back taxes for the two years? The IRS says this tax treaty is specifically for students, but since late 2014 I am not a student anymore. Is this applicable to my situation? If so, how would I go about paying back the taxes? (I didn't make a lot of money in the two years, ~$9,000). The retroactive clause that was removed seems to be only for J1 visas.

2) Also in 2014, I got married to a US citizen, and we filed our tax return jointly a few weeks ago, electing that I be treated a resident. I was under the impression that I was still a non-resident for 2014, thinking that the 5 years began counting in 2011. I just realized a few days ago that apparently the 5 years start counting the first time someone ever enters the country with an F1 visa. So for me, that would be 2009. It seems like I passed the substantial presence test for 2014 because I was here for one day in 2010 since I left the country early morning the day after NYE 2009! Am I seeing this correctly?

Since I filed as a resident for 2014 anyway, I don't think this would be a huge problem. Unfortunately my employer didn't withhold FICA taxes from Jan - Oct 2014 and it now looks like they should have. How do I fix this situation (do I need to fix it?)

Thanks already in advance for reading my convoluted story. Appreciate any input!

If you did not claim the treaty exemption on tax returns for 2009 and 2010, you SHOULD be okay, because the IRS will not count it against you until 2011.

Thank you AtlantaTaxExpert.

I didn't claim the treaty before 2011. In fact, I didn't even file a return before 2011 (I was a naïve exchange student with no income whatsoever). Wouldn't the IRS start counting in 2011 and this year, 2015, would be the fourth year?

Do you have an opinion on my second question about FICA?

Thanks so much!

You became liable for FICA taxes on 1 January 2014. You need to notify your employer of that fact in writing (email is good for this), then let them figure out how to fix the problem.

Thanks so much for your swift replies. I will talk to my employer about this. Since I already filed for 2014 (currently waiting for the refund), could the IRS reject my return?

As for the tax treaty - do you think I need to amend my 2011/2012 returns since 2011+4 years is 2015?

Thank you!

No, the FICA issue is NOT linked to the annual tax return.

I also do not think any amendments are needed.