Can I switch from TN to OPT to save $$?

If you're on a student visa you are exempt from FICA withholding, it's explained in publication 519 in detail.

You must put down on your W-4 that you are a non-resident alien student so they do the correct withholding (and probably mention that to their accountant) and you file Form 1040NR and Form 8843 at tax time. If they don't do the withholding correctly, there is a form you can use to claim back the FICA taxes, Form 843.

I wouldn't worry about the substantial presence test until you come to file your tax return next year. As long as you've never filed 1040 it's not really a big deal because you've consistently claimed tax treaty status.

Hey again Steven - the problem is that this potential J-1 is a "specialist" category, not a student category, and from what I've been reading about J's, I am only exempt from counting my days here under the substantial presence test for 2 of the past 6 years. Since I've already been here as an F-1 for 3 years, it seems to me that I will have to do the substantial presence test for 2008, and I will then be seen as a resident alien.

If I am right about this, unless I can claim Canada as my tax home with an 8840, I won't be exempt from FICA.

Do I make sense?

Anyway - I am jealous you're in Calgary - I am from there and really miss it!

Page 48 of publication 519 says J visa holders are exempt, so you just carry on filing 1040NR and 8843.

Let me just be clear because there is a lot of confusion in this thread - as an international student, in fact as a resident of Canada you can choose to be NEVER a resident of the US or meet the subtantial presence test because of the tax treaty, it's just a matter of filing the right paperwork, in this case it's Form 8843 but usually it would be Form 8833.

The only snag is that you could have happen to you what happened to me if you stay long enough, which is that the IRS can decide you are resident and they send you a letter saying that you have to provide proof you are still not a resident for tax purposes.

You can only file Form 8843 five times, but you can carry on filing Form 8833 forever (theoretically, gets dicey if you actually live in the US and don't maintain some sort of residential ties outside the US).

When you get to the point of filing the 8833 you just file a W-4 with your employer changing your status from non-resident alien student to non-resident alien.

Well, section 519 also says regarding J-visa holders: "You will not be an exempt individual as a teacher or trainee [in other words, a non-student, which I am] if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years."

Since I was exempt as an F-1 in preceding years, I don't think I'm still exempt. However, it sounds like you're saying it doesn't much matter as I can just file another 8843 (I've only filed 3) and claim non-resident status? Even though I do in fact live in the US?

What it says further on is essentially to the effect of, if you weren't employed and/or paid in the US while you were a student/teacher, then the time limit doesn't apply. So yes, you are still exempt. Unless you were employed in the US for two of those years and were paid there.

What they're looking for is a W-4 for more than two years with "non-resident alien student/teacher" on it. If you've never filed a W-4 with an employer, then the clock hasn't started.

If you look further back on page 6, it says you do not count days in the US if you are an exempt individual, which you are as a J-visa holder - BUT you must claim the exemption on Form 8843, as it explains on page 7.

It mentions later on that you can file Form 8840 to claim a closer connection to Canada, but if you do that you are not an exempt individual so you have to pay the withholding tax, it just means you don't meet the substantial presence test. There seems to be conflicting advice from the IRS on whether to use Form 8840 or 8833 for this, I think in this situation you could use either (because you're physically there), but check with them if you ever need to file one. There's another IRS publication in which it says to use Form 8833 for this, not Form 8840. Dunno, use 8840 wherever possible because 8833 is a pig to fill out.