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In 2015 I was on F1 (STEM Extension) till 30 September 2015. After that I switched to H1B status. I am a nonresident alien for tax purposes as I din't pass the substantial presence test. I am an Indian citizen.

Can I claim the standard deduction? Do I have to file 2 forms for different status? How exactly does it work? Please advise. Thanks.

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Prachi - While most non-resident aliens are not allowed to claim the standard deduction here are some exceptions:

  1. Students from India under Article 21
  2. Business Apprentices from India under Article 21

IRS Law under Article 21:

ARTICLE 21

Payments Received by Students and Apprentices

  1. A student or business apprentice who is or was a resident of one of the Contracting States immediately before visiting the other Contracting State and who is present in that other State principally for the purpose of his education or training shall be exempt from tax in that other State, on payments which arise outside that other State for the purposes of his maintenance, education or training.
  2. In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a student or business apprentice described in paragraph 1 shall, in addition, be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the State which he is visiting.
  3. The benefits of this Article shall extend only for such period of time as may be reasonable or customarily required to complete the education or training undertaken.
  4. For the purposes of this Article, an individual shall be deemed to be a resident of a Contracting State if he is resident in that Contracting State in the taxable year in which he visits the other Contracting State or in the immediately proceeding taxable year.

This falls under the U.S.A.-India Tax Treaty.

Sources:

I hope this helps. So, yes, I do believe you would be able to claim the standard deduction, although it's always good to check with a tax adviser.

  • Thanks for your reply .I am from india and was a student on F-1 Visa till Sept 30 2015. So can i claim standard deduction for those 9 months? – Prachi Shah Feb 25 '16 at 18:20
  • Not sure how to edit this block so that scrolling right/down isn't needed. – DukeLuke Feb 25 '16 at 20:06
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    @lucasdavis500 Don't use code blocks - they really have no purpose on Personal Finance & Money. Use quote blocks. – Joe Feb 25 '16 at 21:23
  • I would note - I am very confused by your early sentence ("You cannot claim...") combined with your last sentence ("I do believe you would be able to claim..."). I suppose you are saying he qualifies for an exemption, but I would change the first sentence to be specific to that ("While you cannot claim ..., there are some circumstances under which you can, which you may fall into") or something like that. – Joe Feb 25 '16 at 21:25
  • Initially I didn't think it were possible, then I listed the exemptions. Later Prachi stated she was a student so I changed my response, but didn't catch that. Also, thanks for the formatting advice. – DukeLuke Feb 26 '16 at 18:34

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