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uz_air91
Returning Member

F1 to H1b Tax Return

Hi,

 

I entered US on July 30th, 2017 as an F-1 student. I started working on September 4th, 2018 on OPT. My visa status changed to H1b on October 1st, 2019. 

 

My tax consultant said I can file as a Resident Alien. However, I believe I don't meet the substantial presence test because I was considered an exempt individual before October 1st, 2019.

 

Can someone please help out with this?

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1 Best answer

Accepted Solutions
DavidS127
Expert Alumni

F1 to H1b Tax Return

If you meet the Substantial Presence Test in IRS Publication 519 during 2020, you have the option to be treated as a U.S. resident starting October 1, 2019 under the First-Year Choice.  You don't count any days of presence until your H1B visa was effective. 

 

Your file Form 1040NR for January-September (e.g., using Sprintax) and you file a separate Form 1040 for the period October-December (which you can do with TurboTax).  But, there are rules you must follow to make the First-Year Choice (including a required statement attached to your Form 1040), and you cannot file the 2019 Form 1040 until you have actually met the Substantial Presence Test in 2020.  

 

Here is the wording from the First-Year Choice section of IRS Publication 519 at this link:

 

"First-Year Choice

 

If you do not meet either the green card test or the substantial presence test for 2018 or 2019 and you did not choose to be treated as a resident for part of 2018, but you meet the substantial presence test for 2020, you can choose to be treated as a U.S. resident for part of 2019. To make this choice, you must:

  1. Be present in the United States for at least 31 days in a row in 2019, and
  2. Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2019. For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.

When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States .

 

If you make the first-year choice, your residency starting date for 2019 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. You are treated as a U.S. resident for the rest of the year. If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period."

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View solution in original post

3 Replies
DavidS127
Expert Alumni

F1 to H1b Tax Return

If you meet the Substantial Presence Test in IRS Publication 519 during 2020, you have the option to be treated as a U.S. resident starting October 1, 2019 under the First-Year Choice.  You don't count any days of presence until your H1B visa was effective. 

 

Your file Form 1040NR for January-September (e.g., using Sprintax) and you file a separate Form 1040 for the period October-December (which you can do with TurboTax).  But, there are rules you must follow to make the First-Year Choice (including a required statement attached to your Form 1040), and you cannot file the 2019 Form 1040 until you have actually met the Substantial Presence Test in 2020.  

 

Here is the wording from the First-Year Choice section of IRS Publication 519 at this link:

 

"First-Year Choice

 

If you do not meet either the green card test or the substantial presence test for 2018 or 2019 and you did not choose to be treated as a resident for part of 2018, but you meet the substantial presence test for 2020, you can choose to be treated as a U.S. resident for part of 2019. To make this choice, you must:

  1. Be present in the United States for at least 31 days in a row in 2019, and
  2. Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of 2019. For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.

When counting the days of presence in (1) and (2) above, do not count the days you were in the United States under any of the exceptions discussed earlier under Days of Presence in the United States .

 

If you make the first-year choice, your residency starting date for 2019 is the first day of the earliest 31-day period (described in (1) above) that you use to qualify for the choice. You are treated as a U.S. resident for the rest of the year. If you are present for more than one 31-day period and you satisfy condition (2) above for each of those periods, your residency starting date is the first day of the first 31-day period. If you are present for more than one 31-day period but you satisfy condition (2) above only for a later 31-day period, your residency starting date is the first day of the later 31-day period."

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
uz_air91
Returning Member

F1 to H1b Tax Return

Thank you very much for providing a detailed response. For someone like me who may file as a dual status (provided all conditions and requirements are met), would I be eligible for the stimulus check again given all other eligibility requirements for the check/payment are met? 

F1 to H1b Tax Return

"Your file Form 1040NR for January-September (e.g., using Sprintax) and you file a separate Form 1040 for the period October-December (which you can do with TurboTax).  But, there are rules you must follow to make the First-Year Choice (including a required statement attached to your Form 1040), and you cannot file the 2019 Form 1040 until you have actually met the Substantial Presence Test in 2020."

 

May I ask when I file, for example, form 1040 for Oct to Dec, the taxable income will be much lower than actual annual income (Nonresident + resident). How do I determine the taxable rate?

10%

Up to $9,875

 

12%

$9,876 to $40,125

 

22%

$40,126 to $85,525

 

24%

$85,526 to $163,300

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