Common: F1-OPT-H1B, tax treaty, FICA refund

[louise]

Hello,
I am hoping you could give me some information about my situation. (I do believe there are others out there who are similarly situated.)

I was on F1 from August 2007 until September 2009.
OPT from June 2008 to June 2009. Then still F1 during the cap gap period of July 2009-Sept. 2009.
In October 2009, I changed status to H1B.

Questions:
1. Should I file as non-resident? Or am I considered resident for tax purposes?
2. For tax year 2009, I was on F1 from Jan. 2009 - Sept. 2009, am I eligible for Philippines tax treaty (I think it is $3,000. At least that was what was exempt from tax while I was still on assistantship at the University.)
3. My employer withheld Social Security in 2008 and 2009. I have not yet claimed a refund. Can I still ask my employer for a refund of FICA withheld in 2008? Or am I limited to asking for FICA withheld only in 2009?
4. If my employer does not give me a refund for 2008 and/or 2009, can I ask the IRS for a refund?

I would really appreciate your help!

[Atlanta Tax Guru]

Louise:

1) If you are married, you can file jointly with your husband and you both CHOSE to be treated as resident aliens. This will allow you to claim the $11,400 joint standard deduction plus two $3,650 personal exemption (for yourself and your husband). It does NOT matter if he is in the U.S, or not.

To apply for an ITIN, you need to complete Form W-7 for your husband. You need to make a photocopy of his passport, then get photocopy notarized. This can be done at your local bank in most states in the U.S.

The downside is that:

• You must wait until 1 June 2010 to meet the Substantial Presence Test before you can file for Tax Year 2009.
• you must declare ALL 2009 world-wide income (husband's home country income, if applicable). There is an offset available by either claiming the Foreign Tax Credit (Form 1116) or to claim the Foreign Earned Income Exclusion (Form 2555).

Even with the downside, this is probably the best way for you to file.

2) If you are single, you file Forms 1040NR-EZ and 8843 ONE LAST TIME, filing as a non-resident alien. This return can be filed immediately with the $3,000 treaty exemption you mentioned.

3) The IRS requires you seek the refund with the employer FIRST, because it is faster that way, and the employer gets a refund as well.

4) If the employer refuses, get a letter from the employer stating how much was withheld for each year in question. Youcan then file Form 843 and 8316, plus some other support douments, to get a refund direct from the IRS.

[louise]

Thanks Atlanta Tax Guru. I really appreciate your prompt response. I am single, by the way, and will filing by myself in New York.

As a follow-up:
1. Can I ask my employer for refund of FICA for both years 2008 and 2009?
2. Will my 2009 W2 have to be revised if employer refunds FICA withheld, before I could file my 1040NR EZ?
3. Would I need two Form W2s? (a)Jan-Sept 2009, no FICA withheld since I was on F1;(b) Oct-Dec 2009 with FICA withheld since I am already on H-1B.
4. What service/software do you offer or could recommend? (I used CINTAX before, which was provided by the school.)

[Atlanta Tax Guru]

1) Yes; Form 941 can be amended as far back as 2006.

2) They MAY modify the Form W-2, but it will NOT affect the filing of your Form 1040NR-EZ. In other words, you can file the Form 1040NR-EZ even though you know the W-2 is being modified, because the modifications will NOT affect Boxes 1 and 2 of the W-2.

3) Some companies produce TWO W-2s; one for the OPT and one for the H-1B period, but it is not necessary. Either way, we can handle multiple W-2s.

4) You can use our software for the Forms 1040NR-EZ and 8843, or you can use our paid tax service.

Email me at taxexpert@visataxes.com for a fee quote.

[galois]

Hi Atlanta Tax Guru,

Your reply to louise was a great help for me. It answered almost all my questions. I just want to make sure that I understand them correctly. To begin, let me describe my situation, which is a bit different from louise's:

I'm married. I'm still on F1 visa and this is my 4th year in the US. My wife is on H1B visa. She came to the US at the same time with me, stayed on F1 visa for 2 year, then change it to OPT and finally to H1B in Oct/2009.

If I understand your answers correctly, if we are to file our tax now, we have no choice but to file our tax separately as non-resident alien. Is that correct?

If we are to file as non-residents, how does my wife claim the refund for the FICA tax she has to pay in the last 3 months of 2009?

Can we wait until June to file tax? Isn't that against the law?

Thanks a lot!

[Visa Taxes Expert]

International Student Taxes F1 OPT - FICA Taxes Refund

In your case, you are a F1 student, hence Non Resident.

In case of your spouse, since she change to H1B only in October, based on Substantial Presence Test, she is also a Non Resident.

So you can file your taxes separate,

You need to file Form 1040NR-EZ and Form 8843.

Your spouse needs to file Form 1040NR-EZ (no need to file Form 8843)

Now for her time in OPT, she need not pay FICA Taxes, if her employer had deducted FICA Taxes, she can get a refund by filing Form 843.

We can prepare both your federal and state tax returns.

Contact us for a quote at taxexpert@visataxes.com

[youngprincess]

I have the same situation as louise and I'm from the Philippines as well. I was an F-1 until Sept 2009 and H-1B from October 2009. And I have a few additional questions:

1) I've never used the tax treaty before, so where do I apply the $3000 exemption? Do I subtract that from Line 7 of the 1040NR EZ?

2) Where in the tax return do u specify that you changed from F-1 to H-1B? Coz in pg. 2, it only asks in E, what type of visa did u have at the last tax day. Then in F, have you ever changed your visa type. So my answer in E would be H1-B, then yes in F.

[Administrator]

You need to file Form 1040NR, Form 8843 one last time.

We do not offer line by line instructions in the forum.

For our tax services, please email taxexpert@visataxes.com for a quote.