turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Regarding the Tax Exemption

I am an Indian citizen staying in the US as a J1 visa holder since August-2024. I filed my taxes in January for the yrar 2024. If I wish to invoke tax exemption under the US-India treaty, can I do it for my second year. And will the federal taxes paid for tax year 2025 can be refunded ?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

4 Replies
pk
Level 15
Level 15

Regarding the Tax Exemption

@adityain2003 , Namaste ji

 

1.  What are you doing here in the USA ---   I ask because J visa based  exemption  ( article 22 of US-India tax treaty ) is applicable ONLY to  Profs./ Researchers etc. and with some conditions on type of research. 

2. Generally this exemptions from US tax including application of "savings clause" is pretty much based on a two year term starting from the day the J-1 holder enters the US.   From the language in the treaty and the technical explanation thereof, one probably cannot pick and choose which part of the two years to ask for exemption.

 

My ref. for this is  US-India Tax Treaty -->  PUB3434 (REV. 7-1999)

Technical Explanation of the Convention and Protocol Between the United States of America and the Re...

 

Is there more I can do for you ?   You can either add  to this thread or if you wish private answers you can PM me -- just NO PII ( Personally Identifiable Information).

 

Namaste ji

 

pk

 

Regarding the Tax Exemption

Thank you for your reply. I am a post doc researcher

pk
Level 15
Level 15

Regarding the Tax Exemption

@adityain2003 , thank you for your answer to my questions.  Namaste Aditya ji

 

(a) absent any contravening facts, from your post you appear to be a Non-Resident Alien (NRA).  Therefore  you need to file your return on form 1040-NR ( not  supported by TurboTax --- need to use some service like SprinTax, your own school Foreign Student office  etc.).

(b) If above is true and you have filed a form 1040, then you need to amend your return.  This would mean filing a return using 1040-NR, a note explaining  ( and including a copy of your original return--1040) that you had used the wrong form. On this 1040-NR, you have to recognize the  US sourced income and then exclude this income with a comment  such as  " Exclude  Per Article 22 of US-India tax treaty".

(c) Note that this exemption from tax is valid for two years from the date of entry and  if your plan  ( or high likelihood) of extension of stay past two years, then you are better off allowing the taxation  of the income to proceed i.e. not assert article 22  conditions/benefits.  This is because  there is a claw back condition if  employment/stay goes beyond 2 yrs.  ( IMHO India uses  "may" rather than "will" while US technical explanation kind of recognizes the "may" but does not quite clarify. Also I have not come across any case history one way or the other).

 

Is there more I can do for you ?

Regarding the Tax Exemption

Thank you PK ji. Namaste

 

This is a big help

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question