Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 04-11-2012, 09:53 AM
Junior Member
 
Join Date: Apr 2012
Posts: 1
Tax treaty on multiple J1

Hello,

I hope someone can help me out. In 2011 I did an unpaid internship in the US on a J-1 short term scholar. I went home, graduated, got myself a part-time job. In 2012 (186 days after my return) I came back as a PhD trainee on a J-1 research scholar visa. This time I'm getting paid by the hospital. After consulting the tax determination person, I was told the following: "you did not re-establish residency in your home country from your previous visit to the states, making you ineligible for treaty benefits (as mentioned in the tax treaty between the Netherlands and the US)".

This is what I found about re-establishing residency: Re-establish Residency Clause - "If following the period in which a person claimed student benefits, that person resumes residence and physical presence in his original home country of residence before returning to the United States as a teacher, he may claim the benefits as a teacher." Note: IRS considers re-establishing residency as at least a full year (365 consecutive days) before being eligible to use the tax treaty benefits again.

Now I was wondering if this is correct, I didn't claim any benefits last year, because I didn't get paid (I haven't filled in any tax forms for that year).

Here is the tax treaty between NL and US: http://www.irs.gov/pub/irs-trty/nether.pdf page 42 would apply to me. Or page 47 (table 1) from Publication 901: http://www.irs.gov/pub/irs-pdf/p901.pdf

This is the bit applicable:
. An individual who immediately before visiting one of the States is a resident of the other State and is temporarily present in the first-mentioned State for a period not exceeding three years for the purpose of study, research or training solely as a recipient of a grant, allowance or award from a scientific, educational, religious or charitable organization or under a technical assistance program entered into by one of the States, a political subdivision or a local authority thereof shall be exempt from tax in the first-mentioned State on:
a) the amount of such grant, allowance or award; etc.
3. An individual may not claim the benefits of this Article or Article 21 (Professors and Teachers) if, during the immediately preceding period, the individual claimed the benefits of such other Article.

I assume the problem is that they claim I wasn't a "resident of the other state"? But is this correct? I'm pretty bumped that the treaty was applicable when I didn't need it (didn't get paid), but now I do get paid and therefore want to exercise this treaty, I can't!

Many thanks for any advice!



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How to get full refund on J1 visa thru tax treaty raga Estimated Taxes 1 04-02-2012 10:23 PM
K-1s from multiple states ghhansen S-Corporation 1 04-15-2011 09:19 AM
Multiple States...Which W2s go to which state? ksapp82 North Carolina 5 02-12-2010 08:55 PM
multiple states timh Filing Requirements 2 01-22-2010 10:30 AM
Multiple unfiled years and a NOD UGHtaxes Income 0 08-21-2009 08:45 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.