Discussion:Non resident or resident alien?

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Discussion Forum Index --> Tax Questions --> Non resident or resident alien?

CTurner555 (talk|edits) said:

4 April 2006
My first foreign client (Ohio taxpayer). I've read IRS pubs., and would like verification. The taxpayer is a J-1 Exchange visitor, citizen of Guyana, resident of Jamaica; attending medical university. J-1 dated from 6/24/04 to 6/30/06, category alien physician. 2004 W-2 shows fica, medicare and withholdings. 2005 W-2's - 2 - neither show fica or medicare taxable, although the Ohio one is a state institution which wouldn't anyway, and the other is in Missouri; don't believe it is a state institution.

From what I have read, I should file a 1040NR. Input on whether I should/could file 1040 as a resident alien?

Why I took this on in early April for the first time......?

Thank you.

Riley2 (talk|edits) said:

4 April 2006
The substantial presence test would [not] apply here. Any day in which your client is present in the U.S. under a J visa is an exempt day. Since he appears to be an exempt individual for the entire 2006 calendar year, he would file a 1040NR and pay taxes on his U.S. source income only, including stock gains and losses.

CTurner555 (talk|edits) said:

4 April 2006
Thank you for clarifying Riley2; that is what I thought. On to another project!

Dhtax (talk|edits) said:

14 April 2006
A student on a J1 visa is exempt for 5 calendar years, but a "teacher or trainee" on a J1 is only exempt for 2 calendar years (actually "2 of the preceding six"). I find it's not always easy to say whether they are a "student" or a "trainee", especially if they are not in a degree program, or if they switch from being a student to being a trainee (eg practical training after an MBA). If he's a "trainee", then he is exempt in 2004 and 2005 (yes, file the 1040NR) but he may be filing as a resident for 2006.

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