I am Hungarian and in the US since 2016 on an F1 visa. I have been suggested that due to a tax treaty I could file taxes as a resident for tax purposes. Is this true?

[KarenJ2]

Yes, According to Publication 901,

Hungary

An individual who is a resident of Hungary immediately before arrival in the United States and is here for full­time education or training is exempt from U.S. income tax on payments received from outside the United States for the individual's maintenance, education, or training.

The full time student or trainee may instead choose to be treated as a resident alien of the United States for U.S. income tax purposes. Once made, the choice applies for the entire period that the individual remains qualified for exemption as a full time student or trainee and may not be changed unless permission is obtained from the U.S. competent authority.

Publication 901  page 21, for more information.

You will probably need to attach Form 8833 (Treaty Based Return Position Disclosure) to your return.  TurboTax does not support this form but you can find it on the IRS website.

[mirjamsz]

Thank you, it is great to have this information!

[KurtL1]

Since you arrived in the United States in 2016 on a F-1 Visa, you are unable to count the days  present in the U.S. for part of five calendar years toward the  Substantial Presence Test.

You are considered a Nonresident Alien for Tax purposes in 2019 and you must file a Form 1040-NR. 

The treaty says that you are exempt from taxation and not that you are a Resident Alien.

When you file the Form 1040-NR you can exclude the income from taxation and you must attach a Form 8833 stating the Treaty Article supporting your exemption.

[Vin_Fisch]

I am in a similar situation, however the two replies differ and I don’t know what to do.  Which one is right? Thank you. 

[DaveF1006]

According to the IRS, you will not be an exempt individual as a student if you have been exempt as a teacher, trainee, student, Exchange Visitor, or Cultural Exchange Visitor on an "F, " "J, " "M, " or "Q " visa for any part of more than 5 calendar years.

If you arrived in 2016 and resided in the US for the entire 2021 tax year, you are a resident alien that has complied with the substantial presence test. Your exempt years were from 2016-2020.

Keep in mind, the above replies in this thread were made in 2020.  The year 2021 is a brand new year.

@Vin_Fisch 

[Vin_Fisch]

Dear Dave,

I appreciate your reply. Furthermore, due to the tax treaty I cannot qualify as a resident for tax purposes? The reason why I am asking is because I have got this advise while I was filling;"

• We are reviewing your income against the applicable tax treaty exemptions.
• You have the right under US and HUNGARY file your tax return as a resident of US which will allow you to use all deductions, tax credits and benefits available for US residents, however you will be taxed on your worldwide income for the tax year. Would you like to use these tax treaty benefits?".

If I select no, I will owe even tough they withed the "maximum" amount of taxes from my paychecks. I have not been in the States for five years and I worked a part time job that I gained authorization due economic hardship. 

[DaveF1006]

To clarify, have you received a 1042-S or W2 from your US employer?

@Vin_Fisch

[Vin_Fisch]

I was provided with a W2 form and my total income was under $9,000.00  

[DaveF1006]

Yes, I would file as a non-resident to receive back the taxes that were withheld from your W2. Turbo Tax does not handle 1040NR but our affiliate at  sprintax.com handles all non-resident returns. Please contact them for additional information but feel free to contact us anytime as well.

@Vin_Fisch

[nagytamas]

Hi @DaveF1006,

I am an F1 VISA student from Hungary, which forms do I have to fill out if I came to the U.S. in 2020 August. Thank you for your help!

[LoganathanB]

You have to file 1040 NR. You are considered a nonresident for five calendar years if you are on an F1 visa.