@amartincuks87 , as you pointed out , you are exempt from paying US taxes on the first five thousand of personal service earnings (by asserting Treaty benefits article 20 paragraph a and b) for a period of five years. For clarification please also read the technical explanations available at --> https://www.irs.gov/businesses/international-businesses/latvia-tax-treaty-documents
As I read the treaty and the technical explanations, my impression is that till you change your visa status ( J to H1 ) you are safe as a student/trainee/researcher category and the article 20 is applicable. Once the adjustment is made however, you are an employee and no longer a researcher for public good. Your five years are not up till 60 months from the date of arrival and therefore should still be applicable for the year till status change occurs. What is not clear is if the US$5000 exemption needs to be pro-rated or available for the tax year ( assuming that Latvia is talking about US tax year which is a calendar year. Personally, I would feel more comfortable with a pro-ration i.e. $416.66 per moth covering the period from Jan 1st till the status adjustment date.
IMHO
pk
