Nepal_ko_lato, Yes, the residency test doesn't apply to F1 student for five years. I don't have time to explore it further, however, I have heard unconfirmed information that a Nepali student had a back-n-forth case with IRS in filing 1040 (resident) after two years. I will get in tough with that gentleman when I have time. For J1 visa holders, the 'exempt individual' clause is removed after two years. This one is pretty much informative: - http://www.payroll.ucla.edu/alien/b1taxres.asp