J1 research scholar, year 3, resident or non resident (Exempt from 183 day rule?)

Forum|Forum|5 years ago
March 21, 2021
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Hello everyone,

I arrived to the US from France in February 2018, on a J1 visa as a research scholar, from France.

I had a tax treaty for the first two years. Then I thought I was subject to the 183 day substantial presence test. Since I was more than 183 days in 2020, I thought I qualified as resident for tax purposes.

However, I have heard J1 researchers are exempt from the substantial presence test, up to 5 years.

Thus, for my 2020 taxes, I would still be considered non-resident for tax purposes?

Can someone help me clarify this?

Thank you so much.

Eridani

DaveF1006

According to this IRS link, A J-1 alien can exclude U.S. days of presence as a “student” for purposes of the Substantial Presence Test for up to five calendar years. The five-year limit is a lifetime limit that can’t be renewed but may be extended if certain conditions are met. For detail information, see Exempt Individual - Who is a Student. Generally, a J-1 alien cannot exclude U.S. day of presence as a “teacher or trainee” for more than two calendar years.

It depends on what you are classified as a researcher. If a student, there is a five-year lifetime exemption period. A teacher is only two-year.

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eridaniAuthor

Hi Dave!

Thank you for your informative reply. I was a researcher (J1 research scholar) full time from february 2018 until now. Thank you very much for the link. I see the exemption of the substantial presence requirement could apply to short-term scholars but I am a research scholar so it only applies to me for the first 2 years. Now I am considered resident alien for tax purposes.

I received 1099-MISC and 1099-NEC for my stipends (non employee compensation). I tried Turbotax and it recommended I file as self-employed. I calculated the total federal taxes to be about 24%. Is this normal?

I am wondering if I should file with Sprintax instead.

linaj20201

You should not file Sprintax. You can use TurboTax to file.

You are exempt for two years. Therefore, you are considered as a nonresident for both 2018 and 2019. Starting from January 1, 2020, if you stayed more than 183 days in the US, you are considered as a resident for tax purposes and will be filing a Form 1040.

When you received 1099-MISC and 1099-NEC, IRS will treat you as self employed. Besides your regular income tax ( based on your taxable income), you need to pay an additional self employed taxes of 15.3%. (12.4% for social security for old-age, survivors, and disability insurance and 2.9% for Medicare for hospital insurance). It will show on line 4 of Schedule 2 and line 23 of the Form 1040. Without seeing your tax return, I would not know what your total tax rate will be.

If you follow through the steps in the TurboTax program, the program will calculate your taxes correctly. I am attaching the 2020 Form 1040 tax table for your reference. https://www.irs.gov/pub/irs-pdf/i1040tt.pdf