FAQ'S

What is Recovery Rebate Credit?

The Recovery Rebate Credit is a one-time benefit for people who didn't receive the full economic stimulus payment last year and whose circumstances may have changed, making them eligible now for some or all of the unpaid portion. Generally, a credit adds to the amount of your tax refund or lowers the amount of taxes owed. Therefore, the amount you receive for the recovery rebate credit will be included as part of your refund, as shown on your tax return.

What is First-time Homebuyer Credit ?

The Housing and Economic Recovery Act of 2009 provides a new refundable tax credit for individuals who are qualified first-time homebuyers of a principal residence in the United States. The provision applies to a principal residence purchased by the taxpayer on or after April 9, 2009, and before July 1, 2009. Homebuyers who qualify are allowed a one-time credit against their income tax for the year of purchase. Unlike some past credits, this one must be repaid over a 15-year period. As a result, the new tax credit works like an interest free loan. You take the full credit in either 2009 or 2010, and then repay the credit amount in equal payments over 15 years, with no interest charges.

Higher Standard Deduction for Real Estate Taxes

Your standard deduction is increased by any state and local real estate taxes you paid in 2009, up to $500 ($1,000 if married filing jointly). The taxes must be state or local real estate taxes that would be deductible on Form 1040 (Schedule A) if you were itemizing your deductions. Taxes deductible in arriving at adjusted gross income, such as taxes on business real estate, and taxes on foreign real estate cannot be used to increase your standard deduction.

Who is a resident alien?

A resident alien is one who meets the green card test or the substantial presence test.

Green Card Test
You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during the calendar year. This is known as the �green card� test. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) has issued you an alien registration card, also known as a �green card.�

Substantial Presence Test
You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:


1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:

a. All the days you were present in the current year, and
b. 1 / 3 of the days you were present in the first year before the current year, and
c. 1 / 6 of the days you were present in the second year before the current year.

NOTE Do not count days for which you are an exempt individual like a student temporarily present in the United States under an �F,� �J,� �M,� or �Q� visa.

I am a resident alien on H1 and just got married. Can I file as a resident even though my wife is a non resident alien?

Nonresident Spouse Treated as a Resident
If, at the end of your tax year, you are married and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other spouse is a nonresident alien at the end of the year.


If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year. Generally, neither you nor your spouse can claim tax treaty benefits as a resident of a foreign country for a tax year for which the choice is in effect and you are both taxed on worldwide income. You must file a joint income tax return for the year you make the choice, but you and your spouse can file joint or separate returns in later years.

I was on F1 and then switched to H1 what forms should I use to file?

Your Residency starting date is the first calendar date that you are present in the United states on H1 for calculating to see if you meet the substantial present test.


1) If you do not meet the substantial presence test you file as Non Resident.

2) If you meet the substantial presence test and since you were on F1 before you were on H1 you file as a Dual Status Alien.

I am on F1 and had paid taxes close to $2000. Can I claim a tax credit for the tution fees I paid.

You cannot claim the education credits when filing as a nonresident.

I am a student and which education credit works out best for the money I spent on tution fees.

In most cases with lower incomes education credits work out best . Here is a table from the irs showing the comparision of the two available credits.