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I am an (international) professor at a university (UMASS) since Fall 2012 (on J1 visa). Before that I was a student on F-1 visa for almost 10 years. I am a Russian citizen. For the past 4 years I was filing as resident and suddenly (since January 2013) the employer started withholding as if I was a non-resident. I tried to talk to the employer and explained that since I was on F-1 visa before J1. Specifically, I indicated to the employer that the form 8843 (usually filed by a non-resident with a tax return) on line 8 explicitly says that a person who was on F-1 visa before J1 for at least 2 years in the past 6 years cannot be an exempt person (and as consequence I should be a resident by the substantial present test). The employer was unwilling to listen and to change anything. In the end of the year the employer will send 1042S to IRS which will indicate that I was exempt. I, on the other hand, will file as a resident, since I believe that I am right. Thus, there will be a “discrepancy” between what I say and what the employer says. I am not sure what to do about it. I would be glad if you can comment.
Expatriate / Inpatriate
Foreign National Resident Employee
Form 1042-S
International
Non-Resident
Russia
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Tax Professional Answers
Gary Carter, PhD, MT, CPA
The rule under Sec. 7701(b)(5) of the Code says that a J-1 visa holder is treated as an "exempt individual" (a nonresident) for two calendar years, only if the individual was not an exempt individual (a nonresident) for at least two of the previous six calendar years. So you are a resident in 2013 if you were treated as a nonresident F-1 student in 2007 and 2008. If the last year you were a nonresident F-1 was 2007, the university is correct. If you are correct, the employer is not collecting social security and Medicare tax from your wages because of its mistake. If audited, and it is determined that you are subject to social security tax, the IRS will look to the employer for payment. However, the university does have the right to seek recoupment from you. If you believe you should be treated as a resident, I suggest that you try to get a written statement from the university stating that you are not subject to social security and Medicare tax.
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