J1 Research Scholar entering 3rd year - Resident or Non-resident tax filing status?
I've been working as a research scholar in the USA since January 2022 on a J1 non-immigrant visa. For my first two years (2022 and 2023), I wasn't paying any FICA taxes because I was considered a non-resident alien. I filed 1040NR-EZ forms for my federal taxes during those years. Starting January 2024, my employer began withholding FICA taxes from my paychecks. I understand this is because I'm expected to pass the Substantial Presence Test around July 2024, which would make me a Resident Alien for tax purposes. From what I've read, FICA taxes are withheld from the beginning of the year someone becomes a Resident Alien (and if I left before passing the SPT, I could potentially get those FICA taxes refunded). I've been reading IRS Publication 519, which seems to indicate that if I become a Resident Alien partway through the year, I have two options: a) file part of my 2024 taxes as a Resident and part as a Non-resident, or b) file all of my 2024 taxes as a Resident using the First-year election. Since non-residents don't get a standard deduction on a 1040NR, it would be much more beneficial for me to file a 1040 for all of my 2024 taxes. And if I'm filing a resident 1040 for federal, I believe I can also file my state taxes (Minnesota) as a resident, which would give me a state standard deduction too. Am I understanding this correctly? I've visited two tax preparation offices in my area, but they both said "We don't know, we don't work with non-permanent residents." Some colleagues told me "You're an exchange student on a J1 visa who doesn't pay FICA taxes because you're not a resident, so you need to file a 1040NR." But I'm definitely employed as a research scholar on a max 5-year visa, and I'm definitely now paying FICA taxes, so I'm skeptical that I still need to file as a non-resident. Thanks for any guidance!
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StarStrider
Yes, you're understanding the situation correctly! This is a common transition point for J1 research scholars. Once you meet the Substantial Presence Test (SPT) around July 2024, you'll be considered a tax resident for 2024. You absolutely have the option to use the First-year election and file your entire 2024 as a resident alien using Form 1040. This is typically more beneficial as you mentioned, since you'd get the full standard deduction. To do this, you'd file Form 1040 with a statement attached explaining your First-year election choice. The fact that your employer started withholding FICA taxes (Social Security and Medicare) from January 2024 aligns with this understanding - they're anticipating your resident status for the full tax year. For Minnesota state taxes, yes, you can generally follow your federal filing status. If you're a resident for federal purposes, you would file as a resident for state purposes too. Your colleagues are confusing J1 students with J1 research scholars. Different visa categories have different tax treatments, and as a research scholar who's been here for over 2 years, your status has changed.
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Yuki Sato
•This is really helpful, thanks! One question - do I need to do anything special to make this "First-year election" or is it just as simple as filing a 1040 instead of a 1040NR? And what exactly should the statement say that I need to attach?
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StarStrider
•You'll need to attach a signed statement to your Form 1040. The statement should include: your name, address, identification number (SSN or ITIN), that you're making the First-year election under section 7701(b)(4), that you were not a resident in 2023, that you are a resident under the Substantial Presence Test in 2024, the date your residency begins under the SPT, and that you're a resident for the entire year 2024. For the SPT calculation, make sure to count days properly - you'll need to show that you meet the 183-day requirement (counting current year plus 1/3 of previous year plus 1/6 of year before that). This will determine your exact residency start date.
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Carmen Ruiz
I went through the exact same situation last year! After years of confusion with my J1 research scholar status, I finally found an amazing tool that specializes in these tricky situations. I used https://taxr.ai to analyze my documents and calculate my Substantial Presence Test. It flagged exactly when I transitioned from non-resident to resident status and guided me through making the First-year election. What I love is that you can upload your previous years' tax forms and visa documentation, and it analyzes everything to determine your correct filing status. It even generated that special statement you need to attach to your Form 1040 for the First-year election. Saved me hours of headaches trying to figure out the rules myself.
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Andre Lefebvre
•Does it handle state taxes too? I'm in California on a J1 and totally confused about whether I should file as resident or non-resident for state when my federal status changes mid-year.
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Zoe Alexopoulos
•I'm skeptical about these online tools. How accurate was it really? I've heard horror stories about international researchers getting audited because of incorrect advice. Did you have any issues with your return?
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Carmen Ruiz
•Yes, it does handle state taxes! The tool recognizes that state residency rules often follow federal residency determination, so it provides guidance specific to your state. For California, it has special sections because CA has some unique rules for researchers. I was skeptical too at first, but it was surprisingly accurate. I had previously consulted with an international tax specialist who charged me $400, and the taxr.ai guidance matched exactly what they told me. The documentation it generated was thorough and IRS-compliant. I filed in February and got my refund without any issues or audit notices. What impressed me was how it flagged certain treaty benefits that even the tax specialist missed.
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Zoe Alexopoulos
Just wanted to update everyone - I tried taxr.ai after posting my skeptical comment, and I'm genuinely impressed. As a J1 researcher from Brazil in my 3rd year, I've been absolutely confused about my tax status. The system analyzed my visa documents and previous returns, then walked me through exactly which test applies to my situation. It turns out I qualified for a special exemption under my country's tax treaty that I had no idea about! It saved me over $1,200 and generated all the necessary forms and statements. The most helpful part was the explanation of why FICA taxes were now being withheld and documentation confirming my correct status for both federal and state returns. For anyone in research positions on J1 visas approaching that crucial third year transition, I highly recommend it. Totally worth it for the peace of mind alone.
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Jamal Anderson
If you're struggling to get answers from the IRS about your J1 visa tax status, you should try Claimyr (https://claimyr.com). I was in your exact situation - my university's international office gave me conflicting information, and I couldn't get through to the IRS for weeks. Claimyr got me connected to an actual IRS agent in less than 15 minutes who specialized in international taxpayer issues. I explained my J1 research scholar situation and got a definitive answer about my residency status and how to handle the First-year election properly. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c After three years of filing uncertainty and stress, it was such a relief to finally talk to someone at the IRS who could answer my specific questions about the Substantial Presence Test calculation for my particular situation.
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Mei Wong
•Wait, how does this even work? I thought it was impossible to reach the IRS. Is this some kind of scam or do they actually get you through to real IRS agents?
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QuantumQuasar
•Yeah right. I've been trying to reach the IRS for TWO MONTHS about my J1 tax issues. There's no way this actually works. The IRS phone system is designed to be impossible. If this actually worked, everyone would be using it.
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Jamal Anderson
•It works by using a callback system that navigates the IRS phone tree and waits on hold for you. When an actual IRS agent picks up, Claimyr calls you and connects you directly to that agent. It's completely legitimate - they're just using technology to handle the hold time instead of you having to do it yourself. The IRS phone system isn't impossible, it's just extremely time-consuming with very long hold times. Claimyr waits on hold so you don't have to. I was skeptical too until I tried it. The agent I spoke with was definitely a real IRS employee who accessed my tax records and provided official guidance on my J1 research scholar status.
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QuantumQuasar
I need to publicly eat my words. After posting my skeptical comment, I was desperate enough to try Claimyr for my J1 tax situation, and I'm completely shocked. I got connected to an IRS tax law specialist in about 20 minutes. The IRS agent confirmed I was correctly understanding Publication 519 regarding the First-year election, and she walked me through exactly how to calculate my Substantial Presence Test days as a J1 research scholar. She even explained how my previous years counted differently toward the SPT calculation because of my specific visa category. The agent also sent me the exact IRS forms I needed and confirmed I should attach a specific statement to my return explaining my First-year election. This was information I couldn't get from my university's international office or from tax preparers. I'm still in disbelief that I actually spoke to a human at the IRS after months of frustration.
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Liam McGuire
Have you checked with your university's international student office? Many universities have special tax preparation resources specifically for J1 visa holders. My university offered free access to Sprintax, which is designed for non-resident tax filing and handles these transition cases pretty well.
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Ethan Clark
•I did check with them initially, but they only provide general guidance and specifically said they can't give tax advice. They did offer Glacier Tax Prep software, but it doesn't seem sophisticated enough to handle my specific situation with the transition from non-resident to resident status mid-year and the First-year election option. They basically just handed me some IRS publications and wished me luck.
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Liam McGuire
•That's disappointing but unfortunately common. Many university international offices are worried about liability so they avoid giving specific tax advice. Glacier is okay for simple cases but you're right that it struggles with complex situations like yours. Since you're in Minnesota, you might want to check if they have a VITA (Volunteer Income Tax Assistance) program with volunteers trained in non-resident taxation. Some university law schools also have tax clinics that can help international scholars. Otherwise, it might be worth consulting with a tax professional who specializes in international taxation, especially since this is a transition year that will affect how you file going forward.
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Amara Eze
Quick tip from someone who went through this: make sure you're calculating your SPT days correctly! As a J1 research scholar, your first 2 years in the US are exempt from counting toward the SPT (that's why you were non-resident in 2022-2023). Starting in your third year (2024), those days start counting. The formula is: all days present in current year (2024) + 1/3 of days present in first preceding year (2023) + 1/6 of days present in second preceding year (2022). When this total exceeds 183, you've met the SPT. But wait! Since you were exempt from counting days in 2022-2023 due to your J1 research scholar status, you're essentially starting fresh in 2024. So you'd need to be physically present in the US for 183 days in 2024 to meet the SPT, which would be around early July if you've been here continuously.
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Giovanni Greco
•Not quite right. The exemption for J1 research scholars means those days don't count toward SPT, but the calculation is a bit more nuanced. Once you hit your 3rd year, you start counting days, but the lookback period still applies - it's just that the previous years contribute 0 days because they were exempt. The IRS has a calculator on their website that helps with this determination. The main thing to remember is that the transition typically happens around day 183 of your third calendar year in the US (assuming continuous presence).
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Amara Eze
•You're right about the nuance - I oversimplified. The exempt days from previous years are treated as if you weren't present in the US for those days. So in the SPT calculation, those days contribute 0 to the formula. So for someone who entered in January 2022, was present all of 2022 and 2023, but those days were exempt, then in 2024 they'd need to accumulate 183 actual physical presence days to meet the SPT threshold. This is why most J1 research scholars transition to resident status in early July of their third year. The IRS calculator is definitely helpful, but it's important to indicate your exempt status for those previous years when using it.
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