US Tax J1 - Tax residence question
Hello there,
I have a question about whether I can file US taxes claiming the UK-US tax treaty, but first I will explain my particular situation below. I was a J1 research scholar in the US from Aug 2019 to Aug 2020, paid by a US university. I am a spanish national, in 2019 I payed US taxes based on the spanish-US tax treaty which jor J1 researchers is particularly bad as there is no tax exemption - I payed taxes with no deductions both in 2019 and 2020. In 2020 though, I moved out of the US in March due to COVID, moving back to Spain for four months until July when I finally moved to the UK where I continue to live now and will for years to come. The question is whether I can claim the UK-US tax treaty for filing my US tax return in for 2020. The UK-US tax treaty allows for 2 year tax exemption which would save me some money. However, I am unsure if this could apply to me and what implications would it have in the UK tax return. Any help is appreciated. Many thanks for your answers! |
Re: US Tax J1 - Tax residence question
Originally Posted by WhatMan
(Post 12973884)
Hello there,
I have a question about whether I can file US taxes claiming the UK-US tax treaty, but first I will explain my particular situation below. I was a J1 research scholar in the US from Aug 2019 to Aug 2020, paid by a US university. I am a spanish national, in 2019 I payed US taxes based on the spanish-US tax treaty which jor J1 researchers is particularly bad as there is no tax exemption - I payed taxes with no deductions both in 2019 and 2020. In 2020 though, I moved out of the US in March due to COVID, moving back to Spain for four months until July when I finally moved to the UK where I continue to live now and will for years to come. The question is whether I can claim the UK-US tax treaty for filing my US tax return in for 2020. The UK-US tax treaty allows for 2 year tax exemption which would save me some money. However, I am unsure if this could apply to me and what implications would it have in the UK tax return. Any help is appreciated. Many thanks for your answers! I don't have a clue but perhaps this response will spur someone more knowledgeable to reply. Meanwhile...in case you haven't seen this and dived into its links...take a look: https://www.irs.gov/individuals/inte...-presence-test https://www.irs.gov/individuals/inte...s-and-trainees |
Re: US Tax J1 - Tax residence question
Originally Posted by MMcD
(Post 12974175)
Interesting conundrum....
I don't have a clue but perhaps this response will spur someone more knowledgeable to reply. Meanwhile...in case you haven't seen this and dived into its links...take a look: . A professor or teacher who visits one of the Contracting States for a periodnot exceeding two years for the purpose of teaching or engaging in research at auniversity, college or other recognised educational institution in that Contracting Stateand who was immediately before that visit a resident of the other Contracting State,shall be exempted from tax by the first-mentioned Contracting State on anyremuneration for such teaching or research for a period not exceeding two years fromthe date he first visits that State for such purpose. |
Re: US Tax J1 - Tax residence question
Originally Posted by WhatMan
(Post 12973884)
Hello there,
I have a question about whether I can file US taxes claiming the UK-US tax treaty, but first I will explain my particular situation below. I was a J1 research scholar in the US from Aug 2019 to Aug 2020, paid by a US university. I am a spanish national, in 2019 I payed US taxes based on the spanish-US tax treaty which jor J1 researchers is particularly bad as there is no tax exemption - I payed taxes with no deductions both in 2019 and 2020. In 2020 though, I moved out of the US in March due to COVID, moving back to Spain for four months until July when I finally moved to the UK where I continue to live now and will for years to come. The question is whether I can claim the UK-US tax treaty for filing my US tax return in for 2020. The UK-US tax treaty allows for 2 year tax exemption which would save me some money. However, I am unsure if this could apply to me and what implications would it have in the UK tax return. Any help is appreciated. Many thanks for your answers! |
Re: US Tax J1 - Tax residence question
Does not Article 22 of the following document extend to your situation - where there is a tax exemption for students/researchers etc
https://www.irs.gov/pub/irs-trty/spain.pdf |
Re: US Tax J1 - Tax residence question
I don't think there's any way to use the UK-US treaty, as Article 20A therein specifically requires you to be resident in the UK *at the beginning* of your US visit. Having moved there later doesn't seem to help. If anything, you might be able to use the treaty for your UK taxes for the next two years, but only if you leave the UK within two years.
But, as SanDiegogirl points out, Article 22 of the US-Spain treaty might be helpful. It's titled Student and Trainees, so your university and tax prep software might not have recognised that it might apply to you, but it seems to be worded more broadly than other "student" articles I've seen in other countries' tax treaties, so maybe you could try to claim an exemption under that, also for 2019. Art 22 paragraph 1 (a) (iii) might apply to you, if your payments from the US university could count as as "grant, allowance or award". |
Re: US Tax J1 - Tax residence question
Originally Posted by SanDiegogirl
(Post 12974278)
Does not Article 22 of the following document extend to your situation - where there is a tax exemption for students/researchers etc
Originally Posted by mt8271
(Post 12976731)
I don't think there's any way to use the UK-US treaty, as Article 20A therein specifically requires you to be resident in the UK *at the beginning* of your US visit. Having moved there later doesn't seem to help. If anything, you might be able to use the treaty for your UK taxes for the next two years, but only if you leave the UK within two years.
But, as SanDiegogirl points out, Article 22 of the US-Spain treaty might be helpful. It's titled Student and Trainees, so your university and tax prep software might not have recognised that it might apply to you, but it seems to be worded more broadly than other "student" articles I've seen in other countries' tax treaties, so maybe you could try to claim an exemption under that, also for 2019. Art 22 paragraph 1 (a) (iii) might apply to you, if your payments from the US university could count as as "grant, allowance or award". |
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