Dual Status Return - first year choice

[ptax255]

Hi, I am working on a client that was an F-1 and switch to H1-B in October with W-2 wages the whole year. Under first year choice he can file a dual status return, NR for Jan - Sept and Resident for Oct - Dec. Are the tax tables and % for dual status the same? If splitting the income in the two different returns, that would fall in lower brackets respectively. Too good to be true. Am I missing something?

[itonewbie]

What you described is a dual-status resident alien return with the 1040NR return being only a statement.

US-ECI for the year along with other worldwide income received during the resident period are subject to US tax based on the usual progressive tax rates under §1 whereas US-source FDAP received during the NR period is subject to US tax under §871, unless the taxpayer is eligible for and claims the relevant treaty benefits.

You don't, therefore, apply the tax table separately to income received during the resident vis-a-vis nonresident period.

[ptax255]

Thank you. That makes sense!