I am a postdoc under a J1 research scholar visa. I arrived in the U.S. in September 2022 and was considered a non-resident alien for tax purposes in 2022 and 2023. Starting in 2024, I am considered a resident alien because I have completed two tax years in the country.
I have been benefiting from a tax exemption for two years under the U.S.-India tax treaty. My questions are as follows:
Tax Exemption Period:
Does the two-year tax exemption period refer to two tax years (2022 and 2023) or a continuous 24-month period from my arrival in the U.S.?
Form 1042-S for 2024:
I received Form 1042-S with Income Code 19 for the tax year 2024, indicating scholarship or fellowship grants. This form was issued because I applied for a tax treaty benefit. Consequently, I received two tax forms from my employer: one W-2 and one 1042-S.
The details on Form 1042-S are as follows:
Box 3a: Exemption Code 04 (indicating treaty exemption)
Box 4a: Exemption Code 16 (indicating FATCA exemption)
Box 3b and 4b: Tax rate of 0.00%
Could you please confirm whether the income reported on Form 1042-S for 2024 is indeed tax-exempt?
Thank you very much for your assistance.
Best regards,
Kubandiran Kolanji
