J1 Research Scholar - 2 year tax exemption

[shil3971]

Hello,

I am a UK citizen. I arrived in the US as a J1 Scholar on December 27th 2023. I only started work/ my position as a university researcher on Janurary 8th 2024.

I counted 2024 as one of my tax exemption years and filed a 1040NR last year. Do the 5 days I spent in the US in 2023 also count towards my 2-years tax exemption as a non-resident alien? It seems crazy to lose a whole year of tax exemption for only a few days.

If 2023 does count, does that make me a resident alien for tax purposes for the whole of 2025, dating back to 01/01/2025? (I will meet the substantial presence test this year).

[pk]

@shil3971 , 

generally J-1 exemption is date based i.e. if you entered / admitted on 12/27/2023, and had a two year "exemption",  then your two year ends on 12/26/2025 -- so for intents and purposes your days of presence start on 01/01/2026 and meet the SPT for the year 2026.

Does this make sense?

[shil3971]

Well yes, but this has been my confusion. In some places it seems that the two year exemption includes any time you have spent in the US in a calender year.

See 'Example 4' here on the IRS website: 

https://www.irs.gov/individuals/international-taxpayers/tax-residency-status-examples

I've also come across a similar example explained on a different thread:

https://ttlc.intuit.com/community/college-education/discussion/j1-research-scholar-2-5-years-in-usa-... 

Very frustrating if that is the case! - a date based system seems much more reasonable.

[pk]

@shil3971 , while I understand your frustration  -- the example 4 does generally apply to you and IMHO, my comment above follows the same general principle.  

The point to note here is that for F-1 , you use whole  calendar year i.e. if you entered the USA as F-1  on say 12/20/2023,  then (irrespective of the actual date of entry in the year) your first year of exempt status is 2023 -- so five year is complete on 12/31/2027 and you start counting days present on 01/01/2028. And it is once in a life time.     For J visa, it is from date to date and the exemption ( based on actual facts and circumstances and  tax treaty considerations ) can be renewed/ re-issued.

Are you all set or is there more i can do for you ?

[shil3971]

No, thanks for your help!