J-1 exemptions, student and research scholar

[Golgotha]

Hi,

I'm a PhD student from Belgium, enrolled in my university at home. I came in the US in 2022 for 60 days in July-Sept under a J-1 student intern visa then went back to Belgium. I returned to the US in January 2023 under a new J-1 research scholar visa and have been in the US ever since to do my PhD in Massachusetts (as a visiting PhD student). Minus time off for vacation etc, I've been in the US in 2023 for around 310 days and 340 in 2024.

When I filed last year, in 2024 for 2023, I used Sprintax, as a Non-resident, everything went fine. I'm wondering what my status is this year. From what I've understand, J-1 student have a 5 year exemption and research scholars have only 2, but does that stack? Meaning do the 2 months I spent in 2022 actually count as a year, then another in 2023 as a research scholar therefore barring me to file the 1040NR? I would hope that the extension limit of 2 years as a research scholar actually begin with the new visa but I didn't find a conclusive answer.

Thank you very much.

[DaveF1006]

No, it doesn't extend with a new visa. Your exemption period ended in 2023 so in 2024, you would need to file as a resident alien on a 1040 resident form.

[Golgotha]

@DaveF1006 

Thank you for your swift reply. Another question, even though I'm on a research scholar visa, since I'm a PhD student, would the IRS consider me as a student?

In the end, I'm trying to determine if I'm able to apply the US Belgium tax treaty, which I did last year, and is valid for two years.

I should mention that for 2022 I filed as a resident, not knowing much but I guess it doesn't really change.

I'm just hoping that I would be able to claim the second year for 2024 and not lose a whole year of tax relief because I came for two months.

Thank you.

[DaveF1006]

No. As a researcher, your exempt period is two years. even if you are pursuing a PHD degree. The exempt period is based on calendar years so your exempt period ended after 2023. 

One saving grace that I noticed in the Belgium/US tax treaty is that Article 20 1B (111) states that $2000 of US income can be exempt from income for a period of five years. This is something unique that I have never seen before.

US/Belgium Tax Treaty

[Golgotha]

@DaveF1006 

Thank you for looking into it. If I'm not mistaken, the treaty you linked is the one from 1970, the one in effect currently is the 2006 one 

https://www.irs.gov/pub/irs-trty/belgiumtt06.pdf

Last year, I was exempt under 19(2)

An individual who is a resident of a Contracting State at the beginning of his visit to the

other Contracting State and who is temporarily present in the other Contracting State for the

purpose of teaching or carrying on research at a school, college, university or other educational

or research institution shall be exempt from tax in the other Contracting State for a period not

exceeding two years from the date of the individual's arrival in that other State on the remuneration received in consideration of teaching or carrying on research. This paragraph

shall not apply to income from research if such research is undertaken not in the public interest

but primarily for the private benefit of a specific person or persons.

But since it also stipulates 2 years since the arrival, I assume that I cannot apply it for 2024, even though I didn't apply it when I didn't use it in 2022.

I found this in the technical explanation 

A person, however, who is not a U.S. citizen,

and who visits the United States as a student and remains long enough to become a

resident under U.S. law, but does not become a permanent resident (i.e., does not acquire

a green card), will be entitled to the full benefits of the Article.

But I guess since I'm not considered a student, it doesn't work and I just lost almost a full year of exemption.

Thanks

[DaveF1006]

Yes, based on Article 19(2), your exemption for teaching or research was valid for two years from your arrival. Since you didn't use it in 2022, the rule is based on arrival rather than usage. Tax year 2024 wouldn't qualify under this exemption.