Quick tip from someone who went through this: make sure you're calculating your SPT days correctly! As a J1 research scholar, your first 2 years in the US are exempt from counting toward the SPT (that's why you were non-resident in 2022-2023). Starting in your third year (2024), those days start counting. The formula is: all days present in current year (2024) + 1/3 of days present in first preceding year (2023) + 1/6 of days present in second preceding year (2022). When this total exceeds 183, you've met the SPT. But wait! Since you were exempt from counting days in 2022-2023 due to your J1 research scholar status, you're essentially starting fresh in 2024. So you'd need to be physically present in the US for 183 days in 2024 to meet the SPT, which would be around early July if you've been here continuously.

I'm also a J1 research scholar and went through this exact transition last year! Your understanding is absolutely correct. Once you meet the SPT (which sounds like it'll happen around July 2024 for you), you can elect to be treated as a resident for the entire year using the First-year election. This is almost always the better choice since you'll get the standard deduction on Form 1040 instead of filing 1040NR with no standard deduction. The fact that your employer started withholding FICA taxes from January confirms they're treating you as a resident for the full year. One thing to double-check: make sure you meet all the requirements for the First-year election. You need to be physically present in the US for at least 31 consecutive days during 2024 (which you clearly do) and present for at least 75% of the days between your first day of the 31-day period and the end of the year. For Minnesota, yes, you can file as a resident if you're filing federal as a resident. The state standard deduction will definitely help your tax situation. Don't let colleagues confuse you - J1 research scholars have different rules than J1 students, and your tax status legitimately changes after your second year. You're handling this correctly!

Don't forget to look into college financial aid too! When my daughter started college, we discovered that how we claimed her on taxes affected her FAFSA application. Sometimes the tax benefits vs. financial aid benefits can be a tradeoff.

I'm going through this exact transition right now with my oldest! One thing that really helped me plan was creating a simple spreadsheet to compare the financial impact year by year. For 2024 taxes (filed in 2025): You'll still get the full Child Tax Credit since she's 17 at year-end. For 2025 taxes (filed in 2026): No more Child Tax Credit, but if she's in college full-time, you can still claim her as a dependent AND potentially get the American Opportunity Tax Credit (up to $2,500 for the first 4 years of college). The key thing is that "providing more than half her support" - keep track of what you spend on her (tuition, room/board, food, medical, etc.) vs. any income she earns. As long as your support exceeds 50% of her total support for the year, you can claim her. Also, don't forget that claiming her as a dependent might affect her eligibility for certain financial aid, so definitely talk to the college financial aid office before making decisions. Sometimes it's better for the student to file independently depending on the aid packages available. The transition definitely stings financially, but the education credits can help bridge some of that gap if she goes to college!

Friendly reminder to also check your state tax requirements! Not all states tax capital gains the same way as the federal government. Some states fully tax capital gains as ordinary income, some have their own capital gains rates, and a few don't tax capital gains at all.

Great question about the Washington capital gains tax! You're correct that Washington's new 7% capital gains tax (RCW 82.87) only applies to certain types of capital assets, and personal vehicles are specifically excluded. The tax applies to gains from stocks, bonds, business interests, and similar financial assets, but not to personal property like cars, boats, or household items. So for your car sale situation, you'd only need to worry about federal capital gains tax, not the Washington state tax. This is actually one of the few advantages of Washington not having a general state income tax - most capital gains on personal property aren't subject to additional state taxes here. Just make sure you keep good records showing it was a personal vehicle and not held for business purposes, since that distinction could matter for other tax implications.

One thing no one has mentioned yet - if you do claim your daughter as a dependent, you might qualify for the American Opportunity Credit (if she's in her first 4 years of post-secondary education) or the Lifetime Learning Credit (available for graduate school). This could save you up to $2,000-$2,500 on your taxes depending on which credit you qualify for and your income level. Since you paid those administrative fees, those would count as qualified education expenses. Keep all your receipts!

Based on what you've described, you should definitely claim your daughter as your dependent for 2024. Since she's 23, a full-time graduate student, has zero income, and you're providing all her support, she clearly meets all the IRS tests for qualifying child status. One important thing to keep in mind - make sure you have good records of all the expenses you paid for her this year. The $4,000 in administrative fees plus her living expenses should easily put you over the "more than half support" threshold, but it's good to have documentation just in case. Also, don't worry about what happened in previous tax years. Each year is completely independent when it comes to dependent status. The fact that she filed on her own last year when she was working has no bearing on this year's situation. Since she has no income this year, she won't need to file a return at all. You'll just claim her as your dependent and potentially qualify for education credits on those administrative fees you paid. It sounds like a straightforward situation once you understand the rules!

I'm also dealing with a CP05A letter right now and this thread has been absolutely invaluable! I received mine about 4 weeks ago after filing in February and going through the identity verification process. My transcript shows the same pattern everyone is describing - 570 code followed by multiple 971 codes. What's been most helpful from reading everyone's experiences is understanding that this is unfortunately a common issue right now, not something unique to my situation. I was starting to panic thinking I'd made some major error on my return! The inconsistent information from different IRS agents seems to be universal - I've gotten three different explanations for my delay as well. I'm definitely implementing the strategies shared here: keeping detailed call logs, calling early morning (8-9 AM seems to be the sweet spot), requesting to speak with a Tax Examining Technician specifically, and asking for case notes to be read aloud. I'm also going to reorganize my documentation with a detailed spreadsheet matching each receipt to specific expense lines before sending my response. The waiting is incredibly stressful, especially when you're trying to manage business cash flow, but it's reassuring to see that persistence and the right approach do eventually lead to resolution. Thank you all for sharing your experiences and creating such a supportive community around this frustrating process!

I'm currently going through my first CP05A experience and this thread has been absolutely incredible for understanding what I'm dealing with! I received my letter about 2 weeks ago after filing in early February. Like everyone else, my transcript shows the 570 code with 971 codes following it. What's been most overwhelming is not knowing what to expect or how long this might take. Reading all of your detailed experiences has given me such a clearer picture of the process and concrete steps I can take. I had no idea I could request case notes, ask for Tax Examining Technicians specifically, or that timing my calls for early morning might make a difference. I'm a freelance graphic designer and this delayed refund is definitely impacting my ability to upgrade some essential software and equipment I need for client projects. The uncertainty around timing makes it really hard to plan business expenses. Based on all the great advice here, I'm planning to call tomorrow morning around 8:30 AM and try some of these strategies. I'm also going to reorganize all my documentation with a detailed spreadsheet before sending anything else to them. The tip about including a point-by-point cover letter explaining each document is something I definitely missed in my initial response. Thank you all for being so generous with sharing your experiences and strategies. It's made this stressful situation feel much more manageable knowing there are specific actions I can take rather than just waiting helplessly!