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 Visit us at
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The No 1 J1 Tax Return Preparation Service - GetTax Treaty Benefits - File Form 1040NR 
J1 Taxes - J1 Researcher, Teacher, Physician Tax Return - Tax Treaty Retroactive Taxes -Form 1040NR THE J-1 VISA HOLDER WHO IS A RESEARCHER, ACADEMIC, TEACHER OR PHYSICIAN - J1 Tax Returns - RETROACTIVE TAX RETURNS
The J-1 visa holder who falls into this category can be totally exempt from all federaltaxes for a period of time which is set by treaty. However, this exemption is NOT AUTOMATIC. It must be addressed in a tax treaty, which sets the conditions thatmust be met to qualify and also sets the time limit for the tax-exempt status. While there ARE differences between the specific tax treaties, there ARE somecommonalities. These commonalities are:The J-1 visa holder must be a researcher, an academic of some type (professor,scholar, etc.) or a teacher.The J-1 visa holder must be working for either a government (federal, state or local)entity OR a college or university OR a charitable or non-profit organization.The research being conducted must be for the common good. In other words,research for a private company or corporation that stands to make a profit from theresults of the research does not count!There is a definite time limit to the tax-exempt status, which is usually two years.There is usually a retroactive tax clause (though this clause CAN be waived), with amandated return-to-home-country-and-wait period hat must be met in order to NOTinvoke the retroactive tax clause. We will discuss this retroactive clause in detaillater.It should also be noted that, in most states, the tax exemption does not apply to thestate income tax. Hence, while your income may be exempt from federal incometaxes and the FICA taxes, you must still pay the state income tax most of the time. Another provision to consider is the retroactive tax clause that is contained in many of the tax treaties. This clause declares that, if the J-1 visa holder EXCEEDS thespecified tax exemption time limit, then the tax exemption is void and all federalincome taxes become due retroactive to the date of arrival.EXAMPLE: Dr. Patel, a noted Indian professor of computer science, arrives at theUniversity of Michigan to begin a series of lectures and classes on the latestinnovations of software engineering. His J-1 visa clearly shows a two-year time limitand expires on August 19, 2008. He arrives on August 21, 2006, and he intends toconduct his lectures and classes for the full two years. Under Article 22 of the U.S.-India Tax Treaty, his $85,000 annual salary from the University of Michigan isexempt from all federal income and FICA (Social Security and Medicare) taxes,
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