2016: I came to the U.S as a Research Scholar on J1 visa and paid taxes using 1040NR. I stayed for 104 days.
2017: Didn't leave USA and paid taxes using 1040NR. Stayed 365 days
2018: Passed substantial presence test (J1 scholar) and paid taxes using 1040. Stayed 365 days.
2019: My J1 status came to an end on July 10 and I returned back to my foreign country. I stayed for 190 days.
2020: I returned to U.S on H1B status on March 10.
There was a gap when I had no connection with USA since my J1 status and I-94 expired on July 10, 2019 and returned to USA with new visa and I-94, starting from March 10, 2020.
Qs. For the gap from July 2019 to February 2020 when I had no legal US status or connection, and was living and working in foreign country, Do I still need to pay taxes on my foreign income while submitting 2019 return?
@drkamranrajput , based on the details in your post, you were a resident for tax purposes prior to your departure; your visa expired and therefore became a "non-US person ". Thus for the period you were back in your home country ( India? ) i.e. your departure from the USA and till you were readmitted back into USA with a work visa you would be a Non-Resident Alien and therefore taxed ONLY on US sourced /connected income by the US. If you had no US income in the USA during this period there is no reason for you to file a return. However since you were a resident for tax purposes when you left US shores , you need to file a a form 1040 covering the period Jan 1st through the day you left the US shores ( and visa cancelled ).
A point to remember that now that you are back in USA, you are a resident alien for tax purposes right away because on day 1 you after your entry you would have 184 days ( 1/3 of 2019= 63 , plus 1/6 of 2018=121 plus all days in 2020 ) and you were a resident alien before you left.
IRS will generally argue that your residency permeated through the gap days and you have to show ( if challenged ) that you had no connection to the US -- closer connection to your home country ( family connections, banking, employment etc. etc. )
Good Luck
Is there more I can help you with ?
@drkamranrajput , based on the details in your post, you were a resident for tax purposes prior to your departure; your visa expired and therefore became a "non-US person ". Thus for the period you were back in your home country ( India? ) i.e. your departure from the USA and till you were readmitted back into USA with a work visa you would be a Non-Resident Alien and therefore taxed ONLY on US sourced /connected income by the US. If you had no US income in the USA during this period there is no reason for you to file a return. However since you were a resident for tax purposes when you left US shores , you need to file a a form 1040 covering the period Jan 1st through the day you left the US shores ( and visa cancelled ).
A point to remember that now that you are back in USA, you are a resident alien for tax purposes right away because on day 1 you after your entry you would have 184 days ( 1/3 of 2019= 63 , plus 1/6 of 2018=121 plus all days in 2020 ) and you were a resident alien before you left.
IRS will generally argue that your residency permeated through the gap days and you have to show ( if challenged ) that you had no connection to the US -- closer connection to your home country ( family connections, banking, employment etc. etc. )
Good Luck
Is there more I can help you with ?
Thank you so much "@pk " for your to the point and very logical response based on correct facts I provided! I am thankful to you for your expertise on this matter! Really appreciated!
Did it work or you had to do dual-status? it seems we have to do both 1040NR + 1040 as we become nonresident aliens once we left the US.
@sudimax , do you need help on this ? please tell me more about your situation -- when did you come in , with what visa, from which country, when did you leave the USA, did you have a "sailing permit" , did you have any income from US sources after the departure date etc etc??
Thanks @pk for your interest in helping me.. here I have created a new thread, could you reply to that?https://ttlc.intuit.com/community/taxes/discussion/tax-return-for-resident-alien-left-us-in-the-middle-of-the-year/01/2184090#M786179