F-1 to GC: Tax treaty question

[catmom 11]

I have a very strange tax situation and neither my payroll department, nor the IRS has been helpful so I figured I would post here and see if anyone has experienced anything like this: 

 

I became a permanent resident in late 2021 after being on an F-1 visa for 11 years. My country of origin has a tax treaty with the USA that exempts the first several thousand dollars of my income from federal income tax. Payroll has always just left that income out of my W-2 as if I never earned it and instead reports it in a 1042-S, which I cannot file anywhere since I have been a resident for tax purposes for a while. I have received my 2021 W-2 and it once again does not have that income on there but I am now a permanent resident and no longer eligible for the tax treaty. My question is, does my new resident status retroactively cancel my eligibility for the tax treaty, i.e. am I now somehow supposed to pay taxes on that income that I earned while I was still F-1 in 2021? 

[JeanneAdil 6,681]

If you were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be considered a U.S. resident at the beginning of the current year.

If you meet both the green card test and the substantial presence test in the same year, your residency starting date is the earlier of:

• The first day you are present in the United States during the year you pass the substantial presence test, or
• The first day you are present in the U.S. as a lawful permanent resident (green card holder).

CAUTION! If you were a U.S. resident for any part of the current year, and you were a U.S. resident during any part of the following year, you will be taxed as a U.S. resident through the end of the current year. This applies whether you have a closer connection to a foreign country during the current year, whether you are a U.S. resident under the substantial presence test, or whether you are a U.S. resident under the green card test.

 

if confusing to to a certified accountant for tax returns /  not a tax preparer like H&R block but a real certified accountant

it is worth the fee to have this done right

[catmom 11]

31 minutes ago, JeanneAdil said:

If you were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be considered a U.S. resident at the beginning of the current year.

If you meet both the green card test and the substantial presence test in the same year, your residency starting date is the earlier of:

• The first day you are present in the United States during the year you pass the substantial presence test, or
• The first day you are present in the U.S. as a lawful permanent resident (green card holder).

CAUTION! If you were a U.S. resident for any part of the current year, and you were a U.S. resident during any part of the following year, you will be taxed as a U.S. resident through the end of the current year. This applies whether you have a closer connection to a foreign country during the current year, whether you are a U.S. resident under the substantial presence test, or whether you are a U.S. resident under the green card test.

 

if confusing to to a certified accountant for tax returns /  not a tax preparer like H&R block but a real certified accountant

it is worth the fee to have this done right

I saw this too but my payroll department said that my W-2 does not need to be amended and that it is correct. To me it seems like it isn't. Would a CPA be able to reconcile that? 

[JeanneAdil 6,681]

9 minutes ago, catmom said:

I saw this too but my payroll department said that my W-2 does not need to be amended and that it is correct. To me it seems like it isn't. Would a CPA be able to reconcile that? 

should be able to but if u need to know,  call and ask one