J1 research scholar funded by foreign entity year 4

[davidson_p]

Hi,

I am a J1 research scholar visa holder. I came to the US for the first time in the summer of 2018 and have been here during most of the time since. I am fully paid by a university in Sweden, and I have no income from any US source whatsoever. Do I count as tax exempt or should I pay US taxes? I do pay taxes in Sweden. 

[Vanessa A]

Yes, you would have passed the substantial presence test seeing that you are past your third year here.  Your first 2 years as a  J-1 Research visa holder would have been exempt.  But if you had183 days here in the third year, you are no longer considered exempt and are treated as a US Resident for tax purposes. 

 Therefore you must file your taxes as a US resident would be required to file.  This also means you must include income from all sources around the world.  

[davidson_p]

Hi,

Thanks for the reply.

So in 2018 I had about 100 days here.

In 2019 pretty much the entire year.

In 2020 I actually just had slightly less than 183 days here - 173 in total.

In 2021 I was here pretty much all year.

Does that make me a resident for tax purposes? Does being paid solely by a foreign source do nothing for me here? Does that mean I will have to pay income tax in both Sweden and in the US?

[davidson_p]

It should also be mentioned that I have been paid by the Swedish university my entire time here. I have not at any point been paid a single cent by any US source.

[Vanessa A]

Yes, because 2021, was past your third year and you were present for the full year, you would be a US resident for tax purposes.

Being paid by a Swedish source does help you some, as you can take a credit for foreign taxes paid so you are not double taxed.  You still must file and report the income and may still have top pay in some, but the amount will be reduced by the credit. 

[davidson_p]

Thank you so much for that reply!

Have I understood it correctly that I can pretty much reduce what I will have to pay here with what I have already paid in Sweden?

[DaveF1006]

It depends. Tax rates differ between countries so don't expect a big reduction in tax due, if it doesn't happen. Paying taxes in another country will reduce your tax burden in this country though because of the foreign tax credit. To claim a foreign tax credit.

1. Click on federal> Deductions and Credits at the top of the screen.
2. Scroll down to Estimates and Other Taxes Paid 
3. Select Foreign Taxes and then select start

@davidson_p