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Level 2

First-Year Choice and Amendment Question

Hello, 

 

I am a J1 Teacher. I started working in the USA on the 1st August 2018. I'm compensated by a US school. 

I filed a 1040NR (Non-resident) tax return for 2018, and the same for 2019 (I completed this at the end of January 2020). 


My questions is two fold: 

 

I pass the substantial presence test. Does that mean I qualify for First Year Choice. I'm technically now a resident for tax purposes but that won't be until I file my 2020 tax return.

 

Because I've submitted a 1040NR for 2019, and if I'm eligible for First Year Choice, can I go ahead an submit an amended Tax Return using 1040X to ensure that I'm treated as a tax resident for this current year? 

1 Best answer

Accepted Solutions
Expert Alumni

First-Year Choice and Amendment Question

You don't have any countable days of presence in 2019, which is a requirement for First-Year Choice.  You days in the U.S. on your J1 teaching visa aren't "countable" as a day of presence until your third year (i.e., 2020).

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10 Replies
Employee Tax Expert

First-Year Choice and Amendment Question

Are you on the J-visa for both 2018 and 2019?  If you are on J-visa for both 2018 and 2019, you are considered as a nonresident and should file Form 1040-NR.  The First year choice is not relevant. 

 

From January 1st, 2020, you would start counting your days.  If you meet the 183 days for SPT Substantial Presence Test, you will be considered as a US resident for tax purposes and will file a Form 1040 for the tax year 2020.

 

 

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Level 2

First-Year Choice and Amendment Question

Yes J1 for 2018 and 2019. 

 

Why is the first year choice not relevant?

 

From what I've read, it looks like I can file 1040 now for 2019, using the first year choice. If I've read this document correctly https://www.irs.gov/publications/p519

It states:

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.

 

When I read this it looks that I can opt for first-year choice already... 

Expert Alumni

First-Year Choice and Amendment Question

You don't have any countable days of presence in 2019, which is a requirement for First-Year Choice.  You days in the U.S. on your J1 teaching visa aren't "countable" as a day of presence until your third year (i.e., 2020).

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Level 2

First-Year Choice and Amendment Question

Ok I think I'm starting to get my head round it! 

Level 1

First-Year Choice and Amendment Question

I'm on the same boat and I don't understand why one cannot qualify 183 days are fulfilled in 2020.

This year's deadline is July 15th and one can fulfill 183 days even no days are counted from 2018 and 2019 and still can make the first-year choice for 2019.

Am I wrong?

Level 2

First-Year Choice and Amendment Question

Yes that's true, if I waited until the deadline I could file as a resident surely? 

 

On the 4th July I'm classed as a resident for tax purposes, does that mean that I can file as a resident for 2019? 

 

Thoughts?

Level 2

First-Year Choice and Amendment Question

Keep me posted on what you find out. If the tax deadline is July 15th, and I'm a resident by the 4th July, surely I can opt opt for first year choice? 

 

Let me know if you figure it out 🙂 

Level 1

First-Year Choice and Amendment Question

Sure.

Here is an example that I found on the web.

Example 1: A J-1, non-student, foreign visitor enters the U.S. on December 15, 2012. So, 2012 is the “first calendar year”, even though the foreigner was only present for 16 days during 2012. 2013 is the “second calendar year”. This individual would begin counting days present in the U.S. on 1/1/2014 and would become a resident on July 2, 2014. The full 183 days in the current calendar year are required for residency because there are no countable days in the prior two years.

https://finance.uw.edu/globalsupport/sites/default/files/Substantial-Presence-Text-Examples.pdf

Level 2

First-Year Choice and Amendment Question

So does that mean that I can only file for non-resident for 2019, and I can file resident taxes for 2020? 

Employee Tax Expert

First-Year Choice and Amendment Question

Yes. For 2020 you can file as a resident alien.

 

Resident aliens are treated the same as U.S. citizens for income tax purposes. If you are a U.S. resident alien, you use the same forms and mailing addresses as U.S. citizens. You can use the same filing statuses available to U.S. citizens. You can claim the same deductions allowed to U.S. citizens if you are a resident alien for the entire tax year.

 

Learn more at Resident Aliens

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