Hi,
I have a question regarding worldwide income in Maryland for state tax.
I am a German citizen on a J-1 visa for 2 years.
There's a tax treaty between Germany and the US, so I don't have to pay federal tax for 2 years as a researcher.
I get around $2000 stipend from my american employer and a $3500 stipend from a german state organization (tax free).
I moved to the US in August, so by maryland residency definition I shouldn't be a resident (not longer than 183 days).
The domicile definition is not fulfilled, as I am just here for short term and will move back to germany.
My question is now on what I have to pay state tax (and how much).
I'm pretty sure I have to pay state tax in Maryland on the income from Maryland.
For 2023, however, I shouldn't count as a resident, so I need to file tax as a non resident on the $2000 stipend?
For 2024 it might be trickier as I might count as a resident (more than 183 days).
(Edit: I also found information that the first two years are exempt in substantial presence test for J-1 visa holders. Is this correct? Then I would count as a nonresident for the whole time?)
So in short:
Do I count as a nonresident in 2023 (and 2024?) and do I therefore only have to pay state tax on the income from maryland?
Thanks!
You may be a J-1 Visa status holder and ‘exempt individual’ whose days of physical presence in the United States do not count for purposes of the Substantial Presence Test.
I do not have the information to know whether you qualify to choose between:
Contact Sprintax here who can assist you in these decisions and in Federal and State tax preparation.
See also Taxation of Alien Individuals by Immigration Status – J-1 here.