发信人: notear (Don), 信区: TAX
标 题: F1+H1, File 1040 with standard deduction and tax treaty-from IRS reply
发信站: The unknown SPACE (Wed Apr 3 21:53:25 2002) WWW-POST
I just got the reply from IRS. I was told that I can file as a nonresident
alien even if I am not present 183 THIS year by making the first year choice.
And since I am not an resident alien until this April 15, 2001. I will file an
extension for four month to be eligible for the 183 presence days. And more
importantly, I can take the standard deduction and the $5000 tax treaty at the
same time!!! This is so great. Below is my question and IRS's reply.
I was a resident of the People's Republic of China on the date of my arrival
in the United States (nonresident alien of United States) on a F-1 visa,
which is August,1999. I am not a U.S. citizen. I was presented in the United
States solely for the purpose of my education or training until August
31,2001. On September 1,2001 I changed to H-1B visa and start working until
1) From your answer below, I think I can be considered as a resident alien
in 2001 since a) I can make the first-year choice b) I am married c) I am a
resident alien at the end of the year. So I would be required to report
worldwide income for the entire year, on my U.S. return. Then my husband can
also be treated as a resident by making the choice of nonresident spouse
treated as a resident for the entire tax year. So we (must) choose to file
2) Since 1) is right, we two can file jointly, we can take the $7600
standard deduction. (We received compensation for personal services
performed in the United States.)
3) If 2) is ok, I think that for calendar year 2001 we both are resident
aliens and received compensation during study and training. Each of us
should be exempt from U.S. income tax of up to $5,000 on the income from
personal services performed in the United Sates besides the standard
deduction for the reason listed below.
Publication 901, page 17 states that a student who is a resident of the
People’s Republic of China on the date of arrival in the United States and
who is present in the United States solely to obtaining training, education
is exempt from U.S. income tax on the income from personal services
performed in the United Sates of up to $5,000 for each tax year.
The applicable income tax treaty article is article 20(c). Its technical
explanation states “This article is excepted from the ‘saving clause’ of
paragraph 2 of the Protocol, so its benefits are available to persons who
otherwise qualify even if they become U.S. residents.”
Publication 519, page 45 thereunder state that “if you entered the United
States as a nonresident alien, but you are now a resident alien for U.S. tax
purposes, the treaty exemption will continue to apply if the tax treaty has
an exception to the treaty’s saving clause”.
Please let me know if it is ok for me to file the tax form in this way.
The Answer To Your Question Is:
Thank you for your inquiry.
You are correct. However, before you can qualify to make the first year
choice to be treated as a dual status alien, you must meet the requirements of
the substantial presence test to qualify. This means that you must be present
in the United States for a period of 183 days. You will count days of
presence in the US during 2002 and one-third of the days that you were present
in the US with your H-1 visa status during 2001. This is one-third of the
days between September 1, 2001 and December 31, 2001 plus enough days during
2002 to equal 183 days of presence. Once you have met this 183 day
requirement, you can choose to be treated as a dual status alien for 2001. As
a dual status alien, you can choose to be treated as a resident alien for the
entire tax year by filing a joint tax return with your spouse.
As resident aliens for US tax purposes, you are entitled to claim the standard
deduction. If you qualify, you can claim the benefits of the US - China
income tax treaty by attaching completed Forms 8833, Treaty-Based Return
Position Disclosure Under Section 6114 or 7701(b), to Form 1040, US Individual
Income Tax Return, when you file. If you are each entitled to claim the tax
treaty provision, you will each need to complete your own Form 8833 and both
will be attached to the tax return when you file.
For more information on these issues, please refer to Tax Publication 519, US
Tax Guide for Aliens, which is available on our web site.
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