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University of Connecticut Payroll Department

Taxation of Research Scholars and Professors

J-1 exchange visitors who enter the United States for the primary purpose of engaging in research or teaching will have a form DS-2019, Certificate of Eligibility for Exchange Visitor Status, indicating “Research Scholar” or “Professor” in box 4. Research Scholars/Professors are authorized to work on campus incident to their status and receive remuneration for personal services, which is considered compensation. The compensation received will be subject to both federal and Connecticut state income taxes. In order to determine how and at what rate taxes will be applied, the Payroll Department must first determine tax residency.

Step 1

In order for a Research Scholar/Professor to be considered a non-resident for tax purposes they must NOT pass the substantial presence test. The substantial presence test is used to determine tax residency by counting an individual’s days of presence in the United States. J-1 Research scholars/Professors are considered “exempt” from the substantial presence test as they do not count days of presence in the United States for the first 2 calendar years of presence. Please note that the 2 year period is not consecutive and even 1 day of presence as an “exempt” individual causes the entire calendar year to be counted. In the 3rd calendar year of presence as long as the Research Scholar/Professor is present in the US for 183 days in the third year, the individual will be considered a tax resident for that calendar year.

Step 2

If it is determined that the Research Scholar/Professor is a non-resident for tax purposes, the Payroll Department will then verify tax treaty eligibility. The United States has income tax treaties with many foreign countries. Under these treaties residents (not necessarily citizens) of the foreign country are taxed at a reduced rate, or may even be exempt from federal taxes. Each treaty is different.

For a general summary of tax treaties please click on the link below.

Tax Treaties for Research Scholars and Professors
COUNTRY ARTICLE # TIME LIMIT IMPORTANT NOTES
Bangladesh 21.1 2 years
Belgium 19.2 2 years
Bulgaria 19.2 2 years
China 19 One-time use limitation.
Czech Republic 21.5 2 years One-time use limitation.
Egypt 22 2 years
France 20 2 years One-time use limitation.
Germany 20.1 2 years
Greece XII The treaty does not have a provision for researchers. The treaty ends when an individual becomes a tax resident since there is no savings clause exception.
Hungary 17 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Iceland 21 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
India 22 2 years Individuals whose physical presence exceeds the two year benefit period will retroactively lose treaty benefit eligiblity to the beginning of the benefit period.
Indonesia 20 2 years One-time use limitation.
Israel 23 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Italy 20 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Jamaica 22 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply. One-time use limitation.
Japan 20 2 years
Korea (South) 20 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Luxemborg 21.2 2 years Individuals whose physical presence exceeds the two year benefit period will retroactively lose treaty benefit eligiblity to the beginning of the benefit period.
Netherlands 21.1 2 years Individuals whose physical presence exceeds the two year benefit period will retroactively lose treaty benefit eligiblity to the beginning of the benefit period.
Norway 15 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Pakistan XII 2 years The treaty does not have a provision for researchers. The treaty ends when an individual becomes a tax resident since there is no savings clause exception.
Philippines 21 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Poland 17 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Portugal 22 2 years One-time use limitation.
Romania 19 2 years If an individual's visit is expected to exceed two years the treaty exemption will not apply.
Slovak Republic 21.5 2 years One-time use limitation.
Slovenia 20.3 2 years
Thailand 23 2 years Individuals whose physical presence exceeds the two year benefit period will retroactively lose treaty benefit eligiblity to the beginning of the benefit period.
Trinidad 18 2 years
Tunisia 20.2 2 years
Turkey 20.2 2 years Treaty applies only to payments received outside of the United States.
United Kingdom 20.A 2 years
USSR/NIS VI.1.c 2 years This treaty applies to Armenia, Azerbaijan, Belarus, Georgia, Krygyzstan, Moldova, Tajikistan, Turmenistan, and Uzbekistan.
Venezuela 21.3 2 years

Additional Information

If it is determined, based on information provided by the Research Scholar/Professor, that they are eligible for a tax treaty the appropriate Internal Revenue Service form 8233 (Exemption from withholding on Compensation for Independent Personal Services of a Non-Resident Alien Individual) will be completed for the individuals signature. The federal tax exemption will begin in the next payroll cycle, and continue until the terms of the tax treaty agreement have been met. Once the full exemption has been met, the standard non-resident graduated withholding rate will be applied. The standard rate is single (even if married), 1 withholding allowance, and the letters NRA written next to box 6.

If the Research Scholar/Professor is not eligible for a tax treaty benefit the standard non-resident graduated withholding rate will be applied upon first payment. Please note that the State of Connecticut does not recognize federal tax treaties. Research Scholars/Professors will be taxed in accordance with their CTW4 form election.

If it is determined that the Research Scholar/Professor is a tax resident, the individual will NOT be subject to the IRS prescribed standard non-resident withholding rate. The individual may fill out the federal W-4 in a manner best suited for their personal situation. The federal W-4 form offers instructions, or the following IRS on-line withholding calculator can also provide assistance.

Upon arrival at the University of Connecticut, Research Scholars/Professors must contact Karla Desjardins to setup an appointment for assistance completing the necessary withholding forms.