J-1 Tax Exemption
#1
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J-1 Tax Exemption
I have recently been accepted to start as a post-doc over in the US. I was told I would enter the US on a J-1 visa. Now I have had a read online and as I am from the UK I can claim tax exempt status. Now a lot of the information I have read online is drenched in jargon and as someone with zero experience and knowledge of the US taxation system I can't make heads or tails of it! I used this website: <<<SNIP>>>. to estimate my take home pay each month, and on the website it mentions multiple taxes. (social security, medicare etc.) Now I have two main questions:
1. Which taxes would I be exempt from, as I understand it I would only have to pay local state taxes, is that correct?
2. The tax exemption is for 2 years - my contract with the university here is for 1 year with a renewable second, and assuming it all goes well I would like to stay the full two years. Now does the 2 year tax exemption go from when I start my position (i.e. November to November) meaning I can claim tax exempt status, or would it go on the US fiscal year (October to October I believe?), meaning I will have to pay the tax.
Sorry if this has been asked before, I did try a google search but I couldn't make heads or tails of what people were saying. I would really appreciate any help/advice that anyone can give!
1. Which taxes would I be exempt from, as I understand it I would only have to pay local state taxes, is that correct?
2. The tax exemption is for 2 years - my contract with the university here is for 1 year with a renewable second, and assuming it all goes well I would like to stay the full two years. Now does the 2 year tax exemption go from when I start my position (i.e. November to November) meaning I can claim tax exempt status, or would it go on the US fiscal year (October to October I believe?), meaning I will have to pay the tax.
Sorry if this has been asked before, I did try a google search but I couldn't make heads or tails of what people were saying. I would really appreciate any help/advice that anyone can give!
Last edited by Jerseygirl; Aug 1st 2016 at 5:52 pm. Reason: Link removed
#2
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Re: J-1 Tax Exemption
Hopefully a moderator will move this thread over there! Good luck to you!
Ian
#3
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Joined: Aug 2016
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Re: J-1 Tax Exemption
I know that you believe this to be immigration-related, but it's really not. It's a tax issue related to your status... not to your actual visa. The tax experts hang out in the general USA forum.
Hopefully a moderator will move this thread over there! Good luck to you!
Ian
Hopefully a moderator will move this thread over there! Good luck to you!
Ian
#4
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Joined: Jul 2012
Posts: 574
Re: J-1 Tax Exemption
J-1s are exempt from social security and medicare taxes for as long as the status lasts. Beware, unless you inform HR, they may take these from your check anyway bucease they wouldn't know any better.
Federal and state taxes will be taken from your paycheck. If eligible for a tax treaty benefit, you would claim this with your tax return.
Federal and state taxes will be taken from your paycheck. If eligible for a tax treaty benefit, you would claim this with your tax return.
#5
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Posts: 1,157
Re: J-1 Tax Exemption
Congratulations!
From personal experience, academic careers have only a nodding relationship to best laid plans (my 9 month postdoc became 8 years and a green card!). I say forgo the tax treaty and avoid the potential headache of hitting 2 years, having a job to stay, but not wanting/being in a position to deal with the tax issues. Search for posts by caleyjag for an account of just such a sticky situation.
Think of it as the price of having the freedom to choose the best employment on offer in 2 years' time. Given it's an academic salary, it's not like there's that much tax they can take out anyway
Think of it as the price of having the freedom to choose the best employment on offer in 2 years' time. Given it's an academic salary, it's not like there's that much tax they can take out anyway
#6
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Joined: May 2011
Location: Planet Earth
Posts: 80
Re: J-1 Tax Exemption
You can also request for taxes not to be withheld in the first place which is probably preferable if you're sure you won't stay for more than 2 years.
#7
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Re: J-1 Tax Exemption
2. For the US-UK treaty for scholars regarding income tax, it's 24 months from the date of entry to the US (not from the date you start working but from date of entry, which can be 30 days before).
For the exemption from social security, it's as long as you're classified as a non-resident alien (which generally speaking is going to be the first two calendar years). So if you enter in November 2016 and stay for two years, you'll be exempt from social security in 2016 and 2017 but you'll have to pay social security for the period from January to November 2018.