Resident Alien or Dual Status Alien?

[adiiaditya]

How should I file my tax return for 2019?
I am a single man who entered US in August 2015 and my H-1B visa was approved on February 15, 2019.

Details of my stay in US:
2015 - F1 (139 days)
2016 - F1 (345 days)
2017 - F1 (344 days)
2018 - F1 (365 days)
2019 - F1 (46 days), H-1B (315 days)
2020 - H-1B (114 days as of today)

So am I a resident alien or a dual status alien?

Also if I'm a dual status alien can I file as a resident alien as I was a NR alien only for 45 days in the beginning of the year and for the rest year I was a resident alien.

[pk · Accepted solution]

@adiiaditya , assuming that this was your first F-1 entry to the USA,  you were exempt from counting days present till 12/31/2019 and therefore on-Resident Alien for the entire 2019.  However because your status was changed  ( not approved  but actually adjusted ) in Feb 2019, you would start counting days present from that day on.  This would mean that you would have met the substantial Presence Test sometime in August of 2019.  Thus you are a dual status taxpayer/person for 2019.    Your filing options are :

(1) file as dual status person --- 1040-NR covering  ONLY US sourced/connected income from Jan 1st till meeting the substantial Presence Test ( sometime in August 2019 ) AND   file 1040 covering the rest of the  year on world-wide income.  Note that TurboTax does not support form 1040-NR  ( use SprinTax, Tax Professional or similar )

(2) file as Resident Alien for Tax purposes for the whole year i.e make the first year choice.   You prepare your return using TurboTax  and report would income for the whole year -- need to make sure that you W-2 is correct  ( perhaps no FICA for the Non-Resident /OPT period ).  You will have to include a  request to the IRS to be treated as a resident for the year.

Namaste  ji

[adiiaditya]

@pk Yes this was my first F-1 entry to USA. My status was changed in Feb, 15th Feb to be precise, so I start counting resident alien status from 15th Feb?  Why May? I don’t understand the adjusted/approved you have mentioned, isn’t it that the status changes right away which is on 15th Feb?

Also going by the Substantial Presence Test for 2019, as per Feb 15th consideration won’t it be 

105 days in 2019 and 118 days in 2020, so doesn’t that make me a Resident Alien?

[pk]

@adiiaditya , sorry I got two posts mixed up  and thought I had corrected  ( missed the first instance of May ) -- see the latter part of the answer where I used 02/15 as the date  and assumed also that it was the date on which your status was adjusted ( stamp on your passport, not the letter from the USCIS).   So let me correct my errors:

You are Non-Resident all the way till August ( 183 days from 02/15/2019) and thereafter you are resident for tax purposes.  So you need to file as Dual Status  or  can request to be treated as a resident for the whole year.  Am I still missing something here ?  I have corrected my earlier reply

[adiiaditya]

Sorry @pk I'm actually confused with my scenario and had done previous research on it and couldn't get the proper answer to it so bothering you much. I had COS (Change of Status) filed for my H-1B as I was in the country itself so I didn't need the visa stamping on my passport.

So 2019 timeline should look like:

Jan 1, 2019 to Feb 14, 2019 : F-1

Feb 15, 2019 to Dec 31, 2019 : H-1B

In 2020, I'm on H-1B status and in US for days.

As per my understanding and your explanation, I'm a NONRESIDENT till Feb 14, 2019 because I was on F-1 and then I had a change of status (comes into effect right away) and became a RESIDENT for tax purpose Feb 15, 2019 onward. 

Now as per the SUBSTANTIAL PRESENCE TEST requirements:

In 2020 (current year) = 118 days (as of today)

In 2019 I have to have 1/3 days which is 315 (my H-1B status days) = 105 days 

Total = 223

So it's greater than the 183 days requirement. So shouldn't I be treated as RESIDENT for Tax Purposes?

[pk]

@adiiaditya  let me go over this again -- forget everything I said before .

1.  In 2019 you were on F-1 till the  change of status --- thus you were exempt from counting days present till 02/15/2019.  And a Non-Resident Alien

2. From 02/16/2019 you started counting days towards the substantial Presence Test--> 183 days present in the USA with all days present in 2019 plus 1/3 of the days present in 2018 and 1/6 of the days present in 2017.  In your case  you had ZERO days present in 2017, Zero in 2018 and zero till 02/15/2019.  Thus you would pass the SPT sometime in August of 2019 and become a Resident for Tax purposes .

3. Thus for 2019 you were a Non-Resident Alien  till you passed the SPT ( August 15 or thereabouts ) and then a Resident for Tax purposes.

4. For Tax filings in 2019 you do not counts days present in 2020 because you became a Resident for Tax purpose in August 2019.

 Does this make sense ?

Namaste ji

[adiiaditya]

This sounds good so I can file as a Resident Alien? Also, if not, that makes me Dual Status Alien, in which case I can request for First Year Choice Resident Alien? Am I correct?

Can you let me know the process of First Year Choice Resident Alien?

[pk]

@adiiaditya since you are a Resident at the end of the year, all you have to do is just write a note , signed / dated saying that you want to be treated as a Resident for the whole year starting Jan 1st.  This means you have to file by mail.

Good Luck

Namaste