I've been following this thread closely as someone in a very similar situation - US-Hungarian dual citizen, born in US, never lived in Hungary, all income US-sourced. The consensus here seems reassuring that the treaty termination shouldn't create new filing obligations for us. One thing I wanted to add based on my research: Hungary's tax law actually has specific provisions for "non-resident Hungarian citizens" that generally exempt them from Hungarian tax obligations unless they have Hungarian income or spend significant time there. This is codified in their domestic tax law, not just the treaty, so it should remain in effect after termination. I also contacted a Hungarian tax advisor who confirmed that Hungary doesn't have the same "citizenship-based taxation" approach as the US. They're primarily interested in people who are actually conducting economic activity in Hungary or using Hungarian resources/infrastructure. That said, I'm definitely going to follow the advice here about getting written confirmation from the Hungarian consulate, just to have official documentation. Better to be overly cautious with international tax matters! Has anyone found any official IRS guidance specifically about the US-Hungary treaty termination and its impact on dual citizens? I've seen general guidance about treaty terminations but nothing Hungary-specific yet.

I've been researching this exact issue and found some helpful information about the transition timeline. The US-Hungary tax treaty termination takes effect January 1, 2025, with no phase-out period - it's a clean break. The treaty notification was given in 2024, providing the required one-year notice period. What's interesting is that I found IRS Publication 901 has been updated to reflect upcoming treaty terminations, though it doesn't get into specific scenarios like dual citizens with no Hungarian income. The publication does confirm that when treaties terminate, you fall back on each country's domestic tax laws. For those looking for official US guidance, I'd recommend checking Form 8833 instructions, which deals with treaty-based return positions. While it's mainly for claiming treaty benefits, it might provide insight into reporting requirements when treaties no longer exist. I'm also planning to contact both the Hungarian consulate and IRS as others have suggested. Given how many dual citizens this affects, it would be great if someone could compile the official responses we get and share them back with this community.

3 Has anyone used the IRS Free File program when transitioning from 1040-NR to 1040? I'm in the same boat and wondering if any of those services handle this state refund situation correctly.

I went through this exact situation two years ago when I transitioned from H-1B to green card status. The key thing to understand is that your state refund is taxable to the extent you received a federal tax benefit from deducting those state taxes on your 1040-NR. Since you were required to itemize on the 1040-NR (no standard deduction available), you almost certainly did receive a tax benefit from the state tax deduction. However, the amount that's taxable might not be the full refund amount if you hit the $10,000 SALT deduction cap. You'll need to do what's called the "tax benefit rule" calculation. Look at your 2023 return and see how much state tax you actually deducted. If it was limited by the SALT cap, then only the portion that provided a benefit is taxable when you receive the refund. The change from nonresident to resident status doesn't affect the taxability of the refund - what matters is whether you got a federal tax benefit in the year you took the deduction. Report the taxable portion on Schedule 1, Line 1 of your 2024 Form 1040.

Does anyone know if we need to wait for the 1095-C before filing taxes? I usually file in February to get my refund faster, but my employer is always late sending these forms.

Great question! As someone who used to toss these forms too, I learned the hard way that you should definitely keep your Form 1095-C. While you don't need to attach it to your tax return, it's crucial documentation that proves you had qualifying health coverage. The form serves a few key purposes: it shows the IRS that your employer offered you affordable coverage that meets ACA requirements, which can affect your eligibility for premium tax credits if you ever shop for marketplace insurance. It also provides proof of coverage dates, which is important for your records and could be needed if you're ever audited. Even though the federal penalty for not having coverage is currently zero, some states still have their own individual mandates. Plus, if there's ever a discrepancy about your coverage or if you need to prove you had insurance for any reason, this form is your official documentation. My advice: keep it with your other tax documents for at least 3 years (the standard IRS audit window). It's one of those "better safe than sorry" situations where having it and not needing it is way better than needing it and not having it!

This has been such an educational thread! As someone who just started at a company that grants RSUs, I was completely confused about how the tax burden would be split. Reading through everyone's experiences has been incredibly reassuring - especially confirming that employers must pay their 7.65% FICA portion and can't pass that cost to employees. One question I haven't seen addressed: what happens if you leave the company before all your RSUs vest? Do any unvested shares that get forfeited affect your FICA tax situation for that year, or is it purely based on what actually vests? Also really appreciate all the tool recommendations - taxr.ai and Claimyr both sound like they could save me a lot of confusion. It's refreshing to see actual solutions rather than just generic advice to "consult a tax professional." Sometimes you need specific answers to specific equity compensation questions that general tax advice doesn't cover. Thanks to everyone who shared their real-world experiences. This kind of practical knowledge from people who've actually been through multiple RSU vesting cycles is incredibly valuable for newcomers like me trying to understand what to expect!

This thread has been incredibly helpful! I'm in a similar situation as many others here - first RSU grant vesting soon and was really worried about getting hit with unexpected FICA taxes. It's such a relief to learn that my employer has to pay their 7.65% portion just like with regular salary. One thing I'm curious about that I haven't seen discussed much - how does the timing of RSU vesting affect quarterly estimated tax payments? My RSUs vest in uneven amounts throughout the year (bigger chunks in Q2 and Q4), so I'm wondering if I should adjust my estimated payments accordingly or if the withholding from each vesting event will be sufficient. Also, I work for a startup that's been talking about going public in the next year or two. For those who mentioned dealing with pre-IPO to post-IPO transitions, are there any special considerations I should be thinking about now while we're still private? I assume the FICA treatment stays the same, but wondering if there are other tax planning opportunities I should consider. Thanks to everyone who shared the tool recommendations - definitely going to check out taxr.ai to model my specific situation. It's amazing how much more confident I feel about my RSU taxation after reading through all these real-world experiences!

This happened to me. Last year. With a pension 1099-R. I panicked. Then calmed down. Filed the amendment. Paid the extra tax. No penalties. IRS was fine with it. Self-correction looks better. Than waiting for them to catch it. They will catch it. Eventually.

Adding to what others have said - the timing really matters here. Since your return is already accepted, you're correct that you should wait for it to fully process before filing the 1040-X. The IRS systems need to complete processing your original return first, otherwise the amendment might get confused in their system. One thing to watch for: if your 1099-R had federal taxes withheld, you might actually end up with an additional refund from the amendment! I've seen this happen when people think they're going to owe more but the withholding covers it and then some. Check box 4 on your 1099-R to see if there was any federal withholding. The medical bills pressure is real, but rushing the amendment before your original processes could actually slow things down more. Better to do it right the first time on the amendment.