Do I have to file Form 8843 even if I fail the substantial presence test?

Question

Given the following presence in the U.S.:

• (All previous years are only short tourist trips)
• 2016: 6 days (all under VWP)
• 2017: 0 days
• 2018: 87 days (4 VWP + 83 J-1)

The presence under the J-1 visa is for paid work at a university (after which I will return to Europe and do not plan to immediately travel to the U.S. except maybe short tourist trips in the near future).

When filing the 1040NR(-EZ) tax return, will I have to file Form 8843 in order to exclude days from counting with respect to the substantial presence test as an exempt individual?

To my understanding, I would fail the substantial presence test for 2018 anyway, even if I did count the J-1 days, which means I could "save" the exemption (which I am allowed to claim only twice) for later years in case I happen to work under a J-1 visa in the U.S. again.

The statement on the IRS website is not clear to me and sounds like filing Form 8843 is not ultimately necessary:

If you exclude days of presence in the U.S. for purposes of the substantial presence test because you were an exempt individual [...], you must include Form 8843, [...], with your income tax return.

From: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

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Presume following future:

• 2019: 0 days
• 2020: 92 days (J-1, starting a 2-year postdoc in Oct)
• 2021: 365 days (J-1)
• 2022: 273 days (J-1)

If I don't have to claim exemption during my first two calendar years with J-1 presence (2018 and 2020), during which I will fail the substantial presence test anyway, I could save the J-1 exemption for 2021 and 2022 and could be taxed as a non-resident alien for these two years, too. Is this possible?

Answer 1

You are an "exempt individual" for your days (even if only 1 day) on J-1 status that year if the conditions apply to you. You cannot "choose" not to be an exempt individual to "save it" for later use. As a non-student J-1, you are an exempt individual (i.e. your days on J-1 are exempt from the Substantial Presence Test) as a "teacher or trainee" unless you have previously been an exempt individual for any part of 2 of the previous 6 calendar years.

The fact that you would also fail the Substantial Presence Test for 2018 if your days on J-1 were counted is irrelevant -- your days on J-1 in 2018 are not counted, because you are an exempt individual, and you have no choice in that. (The only case where you have a choice is if you are past the first 2 years, so that you are normally not an exempt individual, and thus your days are counted for the SPT, but you want to still be an exempt individual and have your days not counted for the SPT, you could do that by claiming Closer Connection to a Foreign Country. That doesn't apply to you because you are still in your first 2 years.) You are forced to be an "exempt individual" for your days on J-1 status in 2018 and 2020, and you will not be an "exempt individual" for your days on J-1 status in 2021 and 2022 (which means you will meet the SPT for those years and you will be a resident alien for those years), unless, as explained above, you claim Closer Connection to a Foreign Country.