Dual Status - Substantial Presence Test

[kh310]

Hi,

I am an F-1 Student on OPT, and I have been present in the US for more than 5 years. I have questions about my 2021 returns as this is the year when my 5 calendar years ended. Please see below a full description of my current situation, and advise on how to file my return for 2021.

• F1 Visa - Entered the United States for the first time as a student on F1 visa on 03/21/2016.
• Currently still in the country on F1 OPT.
• As a result, I would pass the Substantial Presence Test for part of 2021.

Firstly:

My first question is, what is the 5 calendar years rule? Does it mean that:

a) the exempt period ends on 03/21/2021, which would be 5 years from the date of initial arrival? Meaning that I would pass the Substantial Presence Test on Sep. 19, 2021?

Or

b) should I count the end of my exempt period as the end of 2020, i.e. exempt for the years 2016-2021, and start counting days of presence from 01/01/2021 onwards? In this case, Substantial Presence Test would be passed on July 2, 2021.

Which of these dates would my non-resident status end?

Second:

I was misinformed about my change of status year, believing it to be the date 5 years from initial arrival were up, i.e. 21 March, 2021. I had conveyed this to my employer, having him not withhold Social Security tax until March 21, and then start withholding it from that day on for the remainder of the year. As a result, I have two separate form W-2's from the same employer, one from Jan-March 2021 with no withholding of Social Security taxes (as non-residents are exempt, and as I believed this to be the period where my non-resident status ends), and the other W-2 from March 22-December 2021 which shows SS tax withheld (resident status). Is the period of withholding correct in these W-2's?

Third:

Do I have to report only the period of income for the particular status on the relevant form 1040, i.e. only income during non-resident status on form 1040NR, and income during resident status on form 1040?

Fourth:

Will my wife, who is on F-2 dependent status, and who arrived for the first time in 2021, also have her status changed? Does the status of my spouse change the same time as mine does?

Please review these details, and advise me on how to complete filing my returns. Thank you for your time and help.

[LoganathanB · Accepted solution]

1. It is five calendar years and your exemption period ended at the end of the year 2020.

2. The withholding of Social Security and Medicare taxes should be from  January 2021. It may not be possible to correct it as we are already in 2022 but you can check with your employer.

3.  No, You are a resident as of the end of 2021 and you report all your income in Form 1040 tax return.

4. You can elect to treat your spouse as a resident and file jointly.

Nonresident Spouse

[kh310]

Got it, thank you.

For point 2, if I ask my employer to fix the Social Security and Medicare taxes that should have been withheld, will I have to file an amended return once they correct it? Or will I have the option to pay the amount due myself when I file my Form 1040?

[LoganathanB]

There are no income tax consequences if FICA taxes were not withheld. You need not file an amended tax return. It is the employer's responsibility to withhold FICA taxes and they will have to add an equal amount and remit it to the treasury and file a return. 

You as an employee will not be able to remit it.