As an new Assistant Professor (Indian Citizen) am I exempt from paying income taxes for two years (US India Tax Treaty Article 22 Question)?

[sanketk86]

Details:
1. Graduated from PhD in May; begun Professor position in July.
2. My H1B Visa is valid from mid 2017 to mid 2020
3. I do not pass the Substantial Presence Test (for e.g. as a graduate student I was treated as a U.S. Resident for Tax Purposes).
4. As a non-resident alien, my "home" country is India.

Since my visa is for 3 years, and the "Maximum Presence" is 2 years, am I immediately excluded from this Treaty?
If not, and I am exempt from with-holding, will I have to retroactively pay back the taxes?

[bine22]

did you do your PhD in the US or somewhere else? If in the US on what visa and when did you come to the US? On H1B you are not eligible for the tax treaty for professors/teachers-students etc.

[sanketk86]

I did my PhD in the US on an F1 visa (2011 to 2017), prior to that I was in the US on an F1 (2005 to 2009) and then a H1B (2009 - 2011). I entered the US on my current H1B July 2017.

[bine22 · Accepted solution]

1. You do meet the Substantial Presence Test, so you would file as resident alien. However, as I said in the comment, H1B visa holders are not eligible to claim the treaty exemption for scholars/professors/teachers/students etc.

[sanketk86]

Thank you. Does the treaty exemption then only apply to those who are here in a capacity of researcher/teacher on a J-1 visa for a limited amount of time (below 2 years)?

[bine22]

that is correct, the treaty exemption for scholars/students etc. applies only to J1 or F1 visa holders

[reeps-civil382]

but Glacier does allow tax exemption for H1B visa and Article 22 never discuss visa type.

[bine22]

Every treaty is different. which one are you refering to?

[reeps-civil382]

India-US tax treaty, Article 22

[bine22]

I would assume that GLacier is making a mistake, that treaty is for people with a scholar/teacher visa (J, M, Q).

[reeps-civil382]

Thank you. Would it possible to cite any existing material on visa type? It be helpful for others who are struggling with this question.