floridaman

Hello all,

I've recently moved from the UK to the US on a J1 visa (as a researcher/teacher). I am currently paying federal tax but I believe I am actually exempt under a tax treaty. The exemption lasts for 2 years, so if I stay for 2 years and one day I have to pay back all the tax.

My question is, if I carry on paying taxes can I claim this back in 2 years time?

This seems like a safer option than not paying the taxes as it is possible I will stay for longer than 2 years and have to pay a large sum of money.

Many thanks for any help, very much appreciated!

David

Steve_

Surprised how often this question comes up.

You're not exempt from federal income tax, but you are exempt from FICA. You state this on your W-4 when you start work, on the dotted line after question 6 put "non-resident alien teacher".

You remain resident in the UK for tax purposes as you are a non-resident alien. Which means you pay tax on that income in the UK and claim a foreign tax credit in the UK.

Every year you have to file a 1040NR and an 8843.

More information in IRS publication 519. It does mention the use of 8233 to avoid withholding, but assuming they calculate the withholding correctly (i.e. excluding FICA) it's not really necessary. You can claim the FICA back on Form 843 if they over withhold.

I'm not actually sure this is a tax treaty exemption anymore, I think it's just a general exemption in the internal revenue code for foreign teachers, it used to be Article 20 of the treaty but I think it's been scrapped.

It does also depend on where the money comes from, I'm assuming your employer is the school and they're the ones paying you. Payment can be weird for teachers, grants from x place to teach in y place, so it can get complex.

floridaman

Thank you Steve! Much appreciated as this is quite confusing to a newbie.