Hi,
I’m currently working as a post doctoral researcher at a university in the states. I’m currently exempt from federal income tax as well as FICA tax as per the US-UK tax treaty article 20a. I’m likely to extend my contract with the university past the 2 year mark and therefore will be extending past the 2 year exemption from the tax treaty. My question has a few parts and I would be helpful if any experts could help.
1) Once past the 2 year mark for the tax treaty, will the IRS look to recover the unpaid income tax? Other posts on this topic have cited that the tax treaties use the term “May recover” when discussing this situation, and I’ve not been able to find anything solid on what constitutes a situation/scenario in which the IRS would actively look to recover the unpaid income tax.
2) non-resident aliens on J1 visas are exempt from FICA taxes for a period of two years. It seems that if I stay past the 2 year exemption that my filing status will change to resident alien (as per the substantial presence test). My question is whether or not I will be liable for FICA taxes for the first two years during which period I was initially exempt? In addition, can anyone clear up whether I will be liable for FICA taxes going forward past the two year mark, given that I am ordinarily a permanent resident of another country and covered by the social security system of that country
3) I’ve seen some people talk about certificates of exemption from the workers original country of residence stating that they are covered/pay into a social security system of their country of permanent residence (issued by HMRC of the UK in my case). If I am not exempt from FICA taxes in the US as per question 2, is there any situation in which this certificate of exemption may apply in my case?
4) Finally, if I am liable for back dated federal and FICA taxes for the initial period of two years in the US, how do I determine how much tax I am liable for and how do I pay it?
If anyone can help with this, I would be grateful.
Thanks in advance,
Danny
