shrianne

Hi all,

I was hoping someone might be able to offer advice if they have been in a similar position.

We have been in the US for most of 2015 on J1 (scholar) and J2 visas. My husband (the J1) is exempt from paying US social security/medicare taxes if we stay for up to 2 years. His job offer and visa is for 2 years, but the job offer has always had a strong possibility of being extended to 3 years.

I know that on the J1 scholar visa, if you don't pay the taxes but end up staying longer than 2 years, you have to then pay all the tax that you didn't pay over that period, with interest. As we were likely to stay beyond 2 years, we were advised just to pay the taxes to avoid a big upfront sum at the end, so he paid them for 2015, and is also continuing to in 2016.

However now it is looking less like the job may be extended so we *might* be coming back after 2 years after all, but it's still not certain.

We are about to complete our first tax return, and we are torn on whether he files to claim the tax back or not for 2015.

My question is - if he does not claim it back in this tax return - will we get it all back when we leave? Or when we file 2016's tax return can we only claim back the tax paid in 2016 - is the tax paid in 2015 lost forever unless we claim it back in this return?

I hope this makes sense! Thank you

AdobePinon

Not sure you can claim it back, but you might pm caleyjag - he did a lot of digging on j1 tax issues a few years ago.

shrianne

Thanks for your reply! I did search and come across his posts before I posted, but he didn't pay tax so had the opposite issue - he had to pay it all back. I'm more wondering if it's possible to claim paid tax back for 2 years rather than just the year you do the tax return for.

Looks like I might have to call the IRS for clarification!

Thanks!

tbm

This is slightly inaccurate. There are two different exemptions from tax:

1) The J-1 (but not the J-2) is exempt from social security/medicare as long as they are non-resident. In practice, this means for the first two calendar years.

2) There's a tax treaty with the UK to exempt J-1 scholars from federal tax if they stay for less than 2 years. (24 months, not calendar years!)

So if you decide to stay for more than two years, your husband would still be exempt from social security/medicare for two calendar years.

As to your specific question, I don't know the answer. However, I don't see a reason why you would not be able to file an amended tax return to request a tax refund. You'd file form 1040X along with a new 1040NR/NR-EZ.

The 1040X instructions contain this sentence regarding the filing deadline: "Generally, for a credit or refund, you must file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later."

bewildering

Did you pay withholdings? I have a vague recollection of having to sign a form to prevent withholdings. I thought you had to sign a form saying you were using the treaty? Do you have an HR department?

As pointed out, medicare and social security (payroll taxes) are a different issue entirely to federal income tax.

Also, the IRS has 82,000 employees to cover the whole of the USA. No one you speak to will have a clue about the UK-USA tax treaty (I tried to read the damn thing 10 years ago).