topic China Tax treaty F1 OPT in Deductions & credits

China Tax treaty F1 OPT

ashs — Sun, 04 Apr 2021 23:20:50 GMT

Hi, I've been claiming the US-China tax treaty as an F-1 student since 2015. I'm now a resident alien. In 2020, I graduated and obtained F-1 OPT status and am currently in the middle of applying for OPT STEM extension (2021). I now work for a company, no longer with a research institute. Do I still qualify for treaty 20(c) for 2020 taxes as an F-1 OPT individual, and for 2021 when I'm using the OPT STEM extension status?

I'm a little confused about the qualification requirements for being able to claim the treaty. Time, status, occupation, and etc - any information is helpful. Thank you!

Re: China Tax treaty F1 OPT

pk — Mon, 05 Apr 2021 04:38:35 GMT

@ashs , as far as I remember, China uses the term "reasonable period" rather than a fixed number of years as to how long you can avail of the exclusion of the first $5000 from US taxes. All it requires is that you are a student /trainee and NOT be a resident of the USA i.e. temporary presence. The fact that US tax authority looks at you as a resident for tax purposes does NOT negate you immigration status as a temporary residing in the USA under F-1 visa. So in my view you should be able to use the $5000 exclusion in 2020 and 2021, as long as you have not applied for Green Card or similar steps or are no longer a student/researcher/trainee.

Is there more I can do for you ?

Re: China Tax treaty F1 OPT

ashs — Tue, 06 Apr 2021 02:14:08 GMT

Thank you very much!! This is very helpful.

Additional question since you mentioned green card filing - if I apply for the green card in 2021, when I file for 2021 taxes in 2022, would I still qualify for the treaty? Thank you!

Re: China Tax treaty F1 OPT

pk — Tue, 06 Apr 2021 02:36:28 GMT

@ashs till the day your visa status is changed to permanent resident, in the eyes of both China ( I assume ) and the USA you are a temporary resident/ Non-Resident Alien. Thus the article 20(c) still applies but one would think that once you have applied (i.e. taken steps ) you have decided/ declared your intention to settle down in the USA and thus probably violated the requirements/intents of article 20(c) -- which assumes that you are in the USA temporarily. That IMHO -- others may disagree.

BTW -- I have confirmed that there is no totalization agreement between US & China and thus my comments about FICA stands as is.

Good Luck

Re: China Tax treaty F1 OPT

ashs — Wed, 07 Apr 2021 17:46:18 GMT

Thank you very much!!