crosses

civilservant Ah that is good to hear thanks a lot! I got this idea from 1) the fact that for the US you are a UK tax resident. 2) My eployer tax services told me that I may still be liable to pay taxes in the UK (but I doubt they know anything about UK tax). Thanks a lot for the clarification and for the tip!

crosses

Glasgow Girl Thanks! I won't be a US tax resident for the first 2 years of my US employement since I am on a J1 scholar and the substantial presence test does not apply for 2 years, so I will not be a US tax resident for the US and I will only be taxed by the US on my US income. Again, for the US I will be a UK tax resident and for the UK I will be a non-resident for tax purposes, this is all very odd.

tht

read the IRS link:
https://www.irs.gov/individuals/taxa...ion-status-j-1

crosses

Ok, thanks a lot guys! I think my understanding is: For tax purposes I am not a UK resident anymore and for the first 2 years I am not a US resident for tax purposes either. I won't invoke the UK-US tax treaty to get a US tax rebate as I am staying for longer than two years and I am not eligibile for the rebate. I will just pay taxes in the US on my US income. I won't pay FICA for the first 2 years since I am not resident in the US for tax purposes.

tht

Unless you are self employed both an employer and employee both pay FICA, do you know what’s it’s for? If you are able to not pay it you also won’t get credit for it.

what are you trying to achieve long term, are you trying to stay in the US, return to the UK where you probably have multiple years of NI contributions or to go home / to another country ?

crosses

tht I have an idea about what FICA is and I know that if I do not pay it I won't get any credit for it. I haven't decided what to do in this regard. I plan on going back to Europe (Italy or Spain hopefully? Probably not the UK) after 3 years in the US, not sure where. I only have 2 years of NI contributions in the UK since I was a student earlier on. I will have to figure out whether to pay FICA, NI or something like that to be covered for these 2 years, or to just leave a gap. I will likely be hopping from country to country in the future (such is the burden of an early career researcher) and I am worried that moving the various NI-like contributions to wherever I will eventually retire is going to be a massive pain and subject to lots of additional taxation.

Thanks a lot for all the help and the patience so far! I essentially just arrived to the US and all these tax issues are extremely confusing.

tht

it is pretty complex, if you have accounts and investments outside the US make sure to research FBAR:
https://www.irs.gov/businesses/small...-accounts-fbar

and for the SS/NI look up:
https://www.irs.gov/individuals/inte...ion-agreements

GaleOfWind

I understand that there is an immigration meaning to the terms, but the IRS also appears to attach meaning to the terms 'resident alien' and 'nonresident alien' for their own purposes. https://www.irs.gov/individuals/taxa...ion-status-j-1 for example says:



So it seems the term 'nonresident alien' does in fact carry meaning with respect to US taxation status?

GaleOfWind

crosses Disclaimer: this is just the opinion of me, a random internet person, and I would definitely suggest that you get professional tax advice, etc etc, with that said here is my personal opinion

How would you remain resident in the UK? Since the Statutory Residency Test was introduced in the UK, it seems quite clear what if you spend under 16 days in the UK in a tax year, you are not tax resident in the UK for that tax year, no matter what. https://www.gov.uk/tax-foreign-income/residence says

So I think you don't even need to consider the employment/home/etc issues, because if you will spend under 16 days in the UK, that's enough to be non-resident for tax. I did a Google search and it seems possible to lose UK tax residency without having to acquire tax residency in some other country, eg https://www.bkl.co.uk/insights/nomads-tax-residence/ says that it's possible from the UK side.

Here you are referencing article 20A of the US-UK tax treaty I believe - I don't know how that applies or changes things for you. You also mention being resident in another European country before the UK, I don't know what their rules are, that's also something for you to consider. Again, this is just my own opinion, I would suggest that you get some professional advice on all of this, it can be a minefield to navigate! I could be wrong, or some of your personal conditions could alter things in a way I don't understand

durham_lad

FYI

Your years as a full time student will count as full years of NI contributions. Also you have the option of paying Class 2 NI contributions if you were working in the UK and then moved abroad to work. Class 2 contributions is a great deal at only £3.05/week (£158.60 for the year gets you a full year credit towards the State pension). If you delay a couple of years or more and leave gaps, you can pay up to 7 years back but that would likely be at Class 3 rates (£15.40/week or £800.80/year)