1). CND Q&A COLUMN ON VISA/JOB/LEGAL MATTERS (No. 48)  . . . . .170 lines
2). CND Q&A COLUMN ON VISA/JOB/LEGAL MATTERS (No. 49)  . . . . .165 lines
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1) CND Q&A COLUMN ON VISA/JOB/LEGAL MATTERS (No. 48)  . . . . . 170 lines
*** CND Q&A No.43 -- No.47 will be posted to readers in future issues ***
-------------------------------------------------------------------------
From: CND Q&A Editor Bo Xiong <cnd-ep@bronze.ucs.indiana.edu>
Date: Sun, 24 Mar 91

NOTE: All discussions on this column are for readers' information only, one
      should consult his/her lawyer or proper professionals before handling
      his/her own visa/job/legal matters.

CND-US edited a comprehensive US Tax Info Series for PRCers in March, 1990,
please contact ywang@postgres.berkeley.edu / gxu@kentvm.bitnet for the series.
Additional information may be found in CND Q&A No.27-28 and No.48-49.

I. Tax Forms 1040A/1040NR and EIC
---------------------------------
Q: From ****@vtvm1.cc.vt.edu Mon Feb  4 22:02:41 1991

   1) If someone claims exemption per Sino-US Tax Treaty provision, and he/
   she makes more than $5,000, does he/she pay Federal Tax for the amount
   beyond $5,000?  2) if someone filed 1040A before (based on information
   from a 800- number; many people received contradictory answers on this,
   by the way), and it appears that he/she may be better off by following the
   Tax Treaty, can he/she use 1040NR now, assuming he/she will not pay
   anything by following the Treaty?  This is especially important when a
   person gets a job but before getting a PR.  3) someone filed 1040A and
   actually gets refund from Earned Income Credit because he/she has a child,
   is he/she going to have any problem later on? Can he/she starts to use
   1040NR now?

A: 1) If he/she cites Article 20 (C) of the tax treaty, he/she has to pay tax
   on the amount exceeding $5,000 + applicable exemptions (usually $2,050 for
   1990).
   2) Yes, he/she may switch to 1040NR in order to take the advantage of the
   Sino-US Tax Treaty as long as the person is still on J-1/F-1 status and
   HAD NOT received any EIC REFUNDS from IRS (i.e., actually got paid from
   IRS, instead of paying any net tax). See CND Q&A No.27 item I, or call US
   IRS at 1-800-829-1014 for further info.
   3) No, it will not be a problem later on if the EIC only helped you pay
   less tax instaed of getting paid from IRS.  See above 2) for using 1040NR.
   See 1040A/1040 instructions for details about EIC.

II. Any "Tricks" for Chinese Students to File US Tax Return?
------------------------------------------------------------
Some Ideas: From ****@OSUCC.BITNET   Tue Feb  5 11:48:13 1991

   In CND Q&A, I have seen a lot of Chinese keep asking the Sino-USA Tax
   Treaty about tax exemptions.  Here I would like to point out that, for
   most of us, especially those having spouse and/or child(ren) live with
   them in the USA, that treaty worths nothing.  As long as you have been
   here for more than 2 years, or your non-student spounse has been here for
   more than six months last year, you should file 1040 or 1040A or 1040EZ
   as a residence alien.  If you are single, you are allowed to get $3250
   un-itemized deduction plus $2050 exemption, totaling $5300 (greater than
   $5000 exemption from the treaty);  If you have spounse and/or child(ren),
   you can file 1040's as married file jointly, and entitle of $5350
   un-itemized deduction, plus $2050 exemption for EACH ONE OF YOUR FAMILY.
   For example, if you couple have one child, you can get $5350 deduction
   plus $2050*3=$6150 exemption, totaling $$11,500.  Moreover, if your annual
   income is lower than $18,000, and your child has been here for more than
   6 month last year, you can ask for some amount of "Earned Income Credit".
   If your last year's income is between $6,*** to $11,***, the eared income
   credit is $953 (highest).  Last year I got a $923 check from IRS.
   Conclusion: Most Chinese should forget that treaty. Please refer to the tax
   guides for 1040, 1040A, or 1040EZ.

A: Here are some points that one needs to consider seriously and carefully
   before filing US tax return per the reader's suggestion:

1. If you are a SINGLE and if you file 1040NR, you can get $5000 exemption
   PLUS the additional $2050 exemption allowed in the 1040NR, that'll be MORE
   than what you can deducte from 1040EZ and 1040A or 1040.  In addition, you
   don't need to pay tax on the interest income paid by your bank if you file
   1040NR.

2. If You are eligible to cite Article 19 or Article 20 (b) of the Sino-US
   Tax Treaty, you are exempted from federal tax for upto three years in the
   aggregate if you are an individual specified in Article 19, and you pay no
   tax for as long as you are a student, no matter how much you are paid.

3. If you can file 1040A/1040 (see item III-8) and have several dependents
   (wife, kids, parents) and they all have SS# (not necessarily live with you
   all the time), you might be able to pay less tax.  See tax form 1040A or
   1040 instructions.

3. If you get money back from US IRS by using 1040** other than 1040NR
   because of low income, you may have trouble when you apply for PR since
   you have been PUBLIC CHARGE in this country, see China Spring July 1990 --
   Jan. 1991 for details (CS phone #: 718-429-6777), and see above item I.

4. Finally, everyone who has income in the US must file US tax return even if
   you are fully exempted from any taxes, i.e., one has to tell US IRS why
   he/she does not pay taxes by filing 1040NR.	In some states, public/state
   universities issue a zero income W-2 to PRC TA's/RA's/Visiting Scholars,
   so they might not need to file any tax return.  And, one has to take care
   of his/her state/local tax matters since many ststes do not honor Sino-US
   Tax Treaty.

III. A Comprehensive Tax Scenario
---------------------------------
Q: From ***@uahcs2.cs.uah.edu Mon Feb 11 12:45:57 1991

Jan. 1990 - Dec. 1990 is Sarah second year in the U.S., she is on F1 status.
During this time, she works half year on pre-completion practical training
and half year on post-completion practical training. The company she works
for is a U.S. owned computer corporation. She got married in June 1990, her
husband is on a H1 status. Sarah bought a computer for her work and study
costing approximately 7,000$ in March 1990. Together, they started mortgaging
a small house by Oct.1990.  (Brief answers following each questions - editor)

1. Sarah can choose to file 1040NR form separately from her husband who choose
   to file 1040. Or is she required to file together either using 1040NR or
   1040 ?
A: From the context of your questions, it's assumed that Sarah is a PRC
   citizen.  Based on this asumption, they have to file 1040A/1040 IF they
   choose file jointly, otherwise, thye may file 1040NR and 1040 separately.

2. If Sarah file using 1040NR form, she can still use the 5,000 exemption
   on the Sino-US Tax treaty.
A: She must file 1040NR to cite the tax treaty.

3. Other than item 2, Can Sarah deduct parts or full cost of her computer as
   continuing education expense? if parts, can she deducts let's say 1/2 or
   3/4?
A: In form 1040NR, there are some stringent restrictions on the deduction of
   educational expenses (see CND-US Tax Packages for details), see US IRS Pub.
   508 for how to compute the ductable amount on the educational expenses.

4. Can her husband deduct the full interest expense of the morgage on his
   tax return since Sarah can not deduct on it.
A: Yes, if he files 1040A/1040, see form 1040A/1040 instructions for details.

5. Assuming Sarah was single (instead of married), can she still deduct the
   computer as an continuing education cost other than the 5000 exemption
   even if she is no longer enrolled but working on the practical training
   status?
A: See above 3 for the deduction.  She is eligible for the $5,000 exemption
   if she is on F-1 status during the training.

6. If both Sarah and her husband have tax refund from the year 1989, do they
   have to report them as income in 1990.
A: Yes, if the refunds came from their local/state tax authority.

7. If the case is Sarah is not on practical training status, but working as
   student with off-campus job, how do questions 1,2,3,4,5 and 6 applies?
A: Income NOT related to her education/training is fully taxable.  The rest
   of the above 1-6 still applies.

8. By the income tax return Jan.1-Dec.31,1991, it is Sarah's third year in
   the U.S. on F1 status, Can she elect to use the resident form 1040 then?
   Assuming she stayed in U.S. two full years without leaving.
A: Yes, she can, see the cover page of 1040NR instruction for details.

9. Assuming that Sarah changed to H1 status instead in the middle of the
   year 1990, can she still choose to use the 1040NR form? half of the year
   she was a F1 practical trainee and half as H1 but working for the same
   company, how can she deduct the 5,000 from her gross income? Can she
   deduct 1/4 of the computer cost as continuing ed expense ? Let assume
   and annual income of 26k for Sarah as practical trainee, how do we 
   deduct the 5000 exemption ?
A: See CND Q&A No.27 item I for details.

10. How about those hushand and wife in F1 and F2, both working. Do they have
   to file separately (1040NR) or jointly? can they both deduct 5000 a exemp-
   tion? - if the F2 is working off-campus and also a student.
A: PRCers cannot file 1040NR jointly. F2ers cannot claim exemption of their
   off-campus income, but can cite Sino-US Tax Treaty to deduct their
   on-campus income if they are alos student.

***  Send your question to  cnd-ep@bronze.ucs.indiana.edu
***  Contact gxu@kentvm.bitnet for the back issues of CND-US

-------------------------------------------------------------------------
2). CND Q&A COLUMN ON VISA/JOB/LEGAL MATTERS (No. 49)  . . . . .165 lines
*** CND Q&A No.43 -- No.47 will be posted to readers in future issues ***
-------------------------------------------------------------------------
From: CND Q&A Editor Bo Xiong <cnd-ep@bronze.ucs.indiana.edu>
Date: Sun, 24 Mar 91

NOTE: All discussions on this column are for readers' information only, one
      should consult his/her lawyer or proper professionals before handling
      his/her own visa/job/legal matters.

CND-US edited a comprehensive US Tax Info Series for PRCers in March, 1990,
please contact ywang@postgres.berkeley.edu / gxu@kentvm.bitnet for the series.
Additional information may be found in CND Q&A No.27-28 and No.48-49.

****** April 15 of Each Year Is the Deadline for Filing US Tax Return ******

I. Can H-4er Cite Sino-US Tax Treaty?
-------------------------------------
Q: From ****@math.gatech.edu Thu Feb 21 21:05:30 1991

   I cam here two years ago to join my husband.  I had a J-2 visa and
   transfered to H-4 recently.	Now I'm working in an University as a research
   lab technician.  Am I eligible for SINO-US tax treaty (Article 19)?

A: Most probably not, the Article 19 is self-explaining. You may call IRS at
   1-800-829-1040 for further info.

II. Can One Get Withheld FICA (SS Tax) Refunded?
------------------------------------------------
Q: From ***@VTVM2.BITNET  Sat, 16 Feb 91 23:13:35 EST

   In CND Q&A No.27, it was siad that a Chinese national leaving the U.S.
   permanently can get back what they paid for social security taxes.  I
   subsequently called an IRS office asking about this. The reply they gave
   me was that there is no such a provision. I would appreciate any further
   infomation on this matter, particularly IRS publications.

A: Some Chinese J-1ers did so successfully, here is an answer to the question
   by someone else on the network:
   - - - - - - - - - - - - - - - -
   >From mlab3@kuhub.cc.ukans.edu   Date: 11 Feb 91 00:57:53 CST
   Subject: Re: Do we foreigners need to pay social security tax?

   If you are a F-1 student and have work permit. The answer is no, you don't
   have to pay the social security tax.  First you can contact your employer
   to ask not to withhold your social security tax.  If they can't do that for
   you you can file tax return at the end of the year using form 843 and your
   W-2 form,also attact a copy of I-94.  Please refer US IRS publication 519
   for more details.
   - - - - - - - - - - - - - - - -

   We have some contradictious information on this subject, see item IV below.

III.  Any Tax Benifits for F-2ers?
----------------------------------
Q: From ***@ucicl.eng.uci.edu Thu Mar 14 14:55:05 1991

  1) My wife is a F-2er covered by Bush's excuetive order.  Does she need
  to pay the social security tax if she works?	If yes, are we covered
  by the social security benefits? 2) Could she change her visa status to H-1,
  any benefits?

A: 1) See previous item and next item.
   2) Very unlikely until she retires in the US except in some special
   circumstances (check with your local social security authority).
   3) She may, if her employer sponsors her and she qualifies.	Not much
   benifit regarding taxes, but may be helpful in PR application.

IV. Is One Suject to FICA Working under Bush's Executive Order?
---------------------------------------------------------------
Q: From ****@math.princeton.edu Mon Mar 18 12:34:35 1991

   Under tax law, payment from employment due to economic necessity for F-1/
   J-1 holder (e.g. full time work during vacation with the permission of the
   school) is not subject to social security tax.  What about payment from
   employment due to the Presidental Order?  i.e. F-1 holder work under Bush's
   order should pay social security tax?

A: From: Ginny Stark <ISOSTARK@OREGON.BITNET>  Fri, 15 Feb 91 10:29:00 PST
   Subject:	 SOCIAL SECURITY TAX FOR CHINESE F2

   Because of the presidential directive, Chinese students with F-2 status
   are allowed to work.  Does anyone know if they are subject to FICA?	This
   hasn't come up before that I know of since, normally, F-2s are not
   permitted to work.

   I am assuming that they ARE subject to FICA (social security), following
   the J-1/J-2 example where J-1s are not, but J-2s are.

   Also, according to IRS publication 519, China is not one of the countries
   with whom we have an international social security agreement, so there
   seems to be no way for them to get back what's been paid in, if, in fact,
   they are subject to social security.  Comments?  -- GINNY STARK

V. F-2 Wife Files 1040 with F-1 Husband as Dependent
----------------------------------------------------
Q: From ****@orstvm.ucs.orst.edu Fri Mar  1 11:41:07 1991

   1) A F1-student stayed in the U. S. for less than 5 years, but his wife
   on F2 has been here over one year.  Usually they have two options to file
   the tax return.  They can file separately or jointly.  The question is
   that if they file jointly, if the student puts himself as his wife's
   dependent, can he still take advantage of China-US treaty, can he still
   deduct at least $5,000 from the family's gross income?  In this case,
   the wife will file 1040 as a resident alien.
   2) A J1-student has graduated and got a post-doc position.  Is his income
   taxable because he has stayed here over 5 years,   or isn't because he
   became a researcher for less than 3 years?  If he has changed his visa form
   J to H, what difference does it make?

A: 1) First of all, his wife is not eligible to file tax return as resident
   alien since she is not a student nor has stayed in the US in 1988 (see
   1040NR instruction cover page for details).	Even though she is eligible,
   her husband cannot claim any benifit of Sino-US Tax Treaty if they jointly
   file 1040A/1040 no matter who is the principal person.
   2) If the researcher has not claimed any benifit or claimed but less than
   three years in aggregate by citing article 19 of the tax treaty, he may
   claim the benifit of article 19 for the balance of the three years no mater
   how many years he has stayed here.  See CND-US Tax Packages and CND Q&A
   No.27-28 for other questions.

VI. Where to File State Taxe Returns after Working in Several States
--------------------------------------------------------------------
Q: From ****@cucevx.civil.columbia.edu Wed Mar 20 17:40:21 1991

   Last year, I worked in New Jersey Jan. - June and in Hawaii July-August on
   J-1 visa, and studied in New York Sep. - Dec. on F-1 visa.  1) where should
   I send my state tax form and what kind of state tax form should I use?
   2) Do I have to pay federal tax?

A: 1) You might be subject to state taxes of every state you worked/lived
   last year, you can get state tax forms from those state tax authorities
   and turn in your tax forms to them.
   2) It depends on your particular situation, see CND Q&A No.27-28, No.58-59
   for details.

VII. H-1er's Employer Only Withholds FICA
-----------------------------------------
Q: From sun@RCF.RSMAS.MIAMI.EDU (Man Sun)

   I started working on November 1 1990 as a postdoc. My visa is H-1. Now the
   question is if I should pay any tax. At the moment the employer withholds
   about $200 a month to pay FICA. Could anybody tell me what this FICA is and
   if I should pay it at all. I know I do not have to pay income tax. But as
   regards to FICA, the information I got is quite confusing. One said I
   should pay, the other said I shouldn't.  What do you think?

A: FICA is social security tax, it's erroneous that your employer does not
   withhold federal and state taxes from your pay check since you are on H-1.
   You may encouter difficulties in final immigraton interview if you have
   not paid any federal taxes by then.	As for FICA, see other items in this
   CND Q&A issue.

VIII. Form W-2 (Salary Report) Lost
-----------------------------------
Q: From ***@vm.cis.smu.edu Wed Mar 13 04:27:56 1991

   I held a temporary job for a very short time, the company said they mailed
   the w-2 form to me several weeks ago, but I still have not received it.
   They agreed to look for it for me. Can I ask them to duplicate a copy of
   the w-2 form ? If not, how can I file for tax return?

A: Per IRS code, the employer must issue you a new W-2 if the original one
   is lost.  Without it, you cannot complete your tax return.

***  Send your question to  cnd-ep@bronze.ucs.indiana.edu
***  Contact gxu@kentvm.bitnet for the back issues of CND-US

