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I was a researcher in J-1 status in the USA. In 2014 I filed a resident tax return. In 2015, I spent only four months in the USA, after which I left and never returned.

I did not obtain a sailing permit. My understanding is that this is not required for people in J-1 status doing authorized work.

It is not clear how I need to file for 2015. Should it be resident or dual-status?

My reasoning so far is that it should be dual-status based on this part of publication 519:

If you were a U.S. resident in 2015 but are not a U.S. resident during any part of 2016, you cease to be a U.S. resident on your residency termination date. Your residency termination date is December 31, 2015, unless you qualify for an earlier date as discussed next.

Earlier residency termination date. You may qualify for a residency termination date that is earlier than December 31. This date is:

  • The last day in 2015 that you are physically present in the United States, if you met the substantial presence test,
  • ...

You can use this date only if, for the remainder of 2015, your tax home was in a foreign country and you had a closer connection to that foreign country.

I did meet the substantial presence test for 2015. I took up employment in a different country immediately after departing the USA and I need to pay taxes there. This means the above applies, and my residency terminates on the date of my departure. This means that I was a resident for the first 4 months but not after.

But I am having an uncomfortable feeling that I am misinterpreting or missing something.

  • Why did you file a resident tax return in 2014? J-1 days are exempt. – littleadv Apr 7 '16 at 2:32
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    @littleadv I have already been a (J1) exempt individual in two years prior to that. In 2014 I passed the substantial presence test. My understanding is that I am considered a resident for the entirety of 2014 in this case. – George Apr 8 '16 at 10:46
  • Where did the "two years" limitation come from? Here's what the IRS says, in that same link you posted: "A teacher or trainee temporarily present in the United States under a “J” or “Q” visa, who substantially complies with the requirements of the visa.". No mentioning of any time limit. – littleadv Apr 8 '16 at 16:34
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    @littleadv Well, this is a good example why I hate US taxes with a passion. Reading just that part of the document doesn't settle things. Here's another part: "You will not be an exempt individual as a teacher or trainee in 2015 if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years." And there are yet other rules which could modify this, but in this case don't. – George Apr 8 '16 at 16:44
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I think you got it right.

(By the way, it's possible you might be able to be a nonresident the entire year -- since you were in the US less than 183 days in the year, even though you met the Substantial Presence Test, if you could establish Closer Connection to a Foreign Country, you could be a nonresident; though you may not qualify. In any case, it doesn't matter because there isn't much difference in your case between dual-status and nonresident the entire year -- either way you would be subject to US tax on your US income when you were in the US, and not subject to US tax on your foreign income after you have left the US.)

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