International Students: Understanding Us Tax Returns

International students in the US are required to file a tax return if they were in the country during the previous calendar year and earned income. Students on F-1 visas are considered nonresident aliens for tax purposes and must pay federal and state income taxes on their US-sourced income. They are exempt from paying Social Security and Medicare taxes. To file their tax returns, international students must use Form 1040-NR or 1040NR-EZ, and they may also need to apply for an Individual Tax Identification Number (ITIN) if they are not eligible for a Social Security Number (SSN).

F-1 visa holders must file taxes

International students in the US on an F-1 visa are considered nonresident aliens for tax purposes. This means that they are subject to different tax rules than US residents. While F-1 visa holders are not required to pay Social Security or Medicare taxes, they are still required to file a US tax return if they earned any income in the US during the previous calendar year. This includes income from employment, internships, scholarships, fellowships, or other sources.

To file their taxes, F-1 visa holders will need to submit a Form 1040NR (federal tax return) to the IRS. This form is used to assess federal income tax and taxes on capital gains. F-1 visa holders who earned income in the US will also need to file a state tax return, depending on the state they resided in while earning that income. Additionally, they may need to submit a Form 8843, even if they did not earn any income while in the US. This form is used by "alien individuals" to declare the time they were studying and not working in the country.

It is important to note that the tax rules for F-1 visa holders can be complex, and there may be exemptions or reduced tax rates available under certain tax treaties. For example, F-1 visa holders who are considered nonresident aliens may be eligible for a reduced tax rate or exemption on certain types of income, such as capital gains. In some cases, they may even be able to claim a refund if they have overpaid their taxes.

F-1 visa holders who are unsure about their tax obligations or how to file their taxes can seek assistance from a tax professional or their university's international student office. These resources can help them understand their specific tax situation and ensure they are complying with all relevant laws and regulations. Additionally, the IRS provides a tutorial and other resources to help international students navigate the tax filing process.

Non-resident aliens and international income

International students in the US on an F, J, M, or Q visa are considered non-resident aliens for tax purposes. Non-resident aliens are individuals who have not passed the green card test or the substantial presence test. They are generally exempt from US taxation on foreign-source income. However, if they have US-source income, they may be required to file a US tax return.

Taxation of Non-Resident Aliens

Non-resident aliens who are required to file an income tax return must use Form 1040-NR, US Nonresident Alien Income Tax Return. This form is typically due by April 15 for those who are employees or self-employed and have an office or place of business in the US. For non-employees without a place of business in the US, the deadline is usually June 15.

Income Exclusions for Non-Resident Aliens

Non-resident alien students and exchange visitors on F, J, M, or Q visas can exclude from their gross income any pay received from a foreign employer. A foreign employer can be a non-resident alien individual, a foreign partnership, or a foreign corporation. Additionally, compensation for personal services paid to non-resident aliens temporarily present in the US as regular crew members of a foreign vessel engaged in transportation between the US and a foreign country is not subject to US taxation.

Income That Is Taxable for Non-Resident Aliens

Non-resident aliens may be required to pay US taxes on certain types of income, such as wages, tips, scholarship and fellowship grants, and dividends. If they have income from US sources, they will likely need to file Form 1040-NR to complete their tax return.

Filing Status for Non-Resident Aliens

The filing status of non-resident aliens can vary. If married, and only one spouse is a non-resident alien, they can file a joint return with their spouse. If a non-resident alien is considered engaged in a trade or business in the US, they must file a tax return and report any US-source income on which the tax liability was not satisfied. They may also need to file a tax return if they want to claim a refund of excess withholding or claim any deductions or credits.

State tax returns

As an international student in the US, you may be required to file a state tax return and pay state income tax, even when no federal return is due. The US tax system is a pay-as-you-go system, which means that a portion of your income is usually automatically deducted and sent directly to the government. This amount is estimated based on information you provided in your W-4 or other tax documents, your tax filing status, and possibly your residency.

State income tax is collected by most US states in addition to federal income tax. The tax rates and deductions will differ for each individual state in the US, so the amount you will pay will depend on where you live. For example, Yale University students and scholars must also file a Connecticut (CT) state tax return in addition to their federal return.

If you are an international student or scholar who is not a US citizen or permanent resident and you receive payments from the university (e.g. compensation, stipend, financial aid, fellowship, etc.), you are required to complete Sprintax Calculus with the International Tax Department.

The Internal Revenue Service (IRS) grants an exemption from social security and Medicare taxes to nonimmigrant students in F-1 status. However, F-1 students are still required to pay both federal and state income taxes. These taxes are withheld from your pay, and you must file a tax return as part of the process.

You will need your W-2 to file your tax return, and your employer should give it to you at the end of January. It will state the previous year's earnings and tax withheld. You will also need your Social Security Number or Individual Taxpayer Identification Number (ITIN).

Tax forms and deadlines

International students in the US on non-immigrant F-1 visas are considered nonresident aliens for tax purposes. This means that they are subject to different tax rules than US residents. Even if you did not earn any income during your time as an F-1 student in the US, you may still have a filing requirement.

Form 8843

Even if you did not earn any income in the US, you will need to file Form 8843 with the IRS. This form is due on April 15, 2025. The purpose of this form is to declare the time you were studying and not working in the US.

Form 1040-NR

If you received income from US sources, you will likely need to file Form 1040-NR (federal tax return) to assess your federal income and taxes. This form is due by April 18 or June 15, depending on your circumstances.

State Tax Returns

You may also be required to file a state tax return, depending on the state. Tax rates and deductions differ for each state in the US, so the amount you will pay will depend on where you are. Nine states don't have any tax-filing requirements.

Form W-4

If you are working in the US, you will need to fill out a W-4 tax form with your employer. This form is used to determine the amount of tax to withhold from your paycheck.

Form 1098-T

This form is not relevant for nonresident aliens. It is used by US nationals and residents to figure out any educational credits.

Tax treaties and exemptions

International students in the US on an F-1 visa are generally considered nonresident aliens for tax purposes for the first five calendar years of their stay. Nonresident aliens are taxed only on US-sourced income. If the student's country of residence has signed a tax treaty with the US, they may be partially or completely exempt from paying taxes on this income. The US has income tax treaties with 65 countries. These treaties can reduce or eliminate US taxes on income from personal services, pensions, interest, dividends, royalties, and capital gains.

International students on F-1 visas are exempt from paying FICA (Social Security and Medicare) taxes for up to five years from the date of their arrival in the US. This is because they are considered nonimmigrant students. However, if they have been in the US for more than five years and meet the "Substantial Presence Test", they may be classified as resident aliens and become liable for Social Security and Medicare taxes. Students employed on-campus by a school, college, or university where they are enrolled at least half-time are exempt from FICA taxes, regardless of their US tax residency status.

International students can also benefit from tax treaties with their home country. Under these treaties, residents of foreign countries may be eligible for reduced tax rates or exemptions from US taxes. This does not apply to citizens, only residents. Students, trainees, teachers, and researchers can use Form 8233 to claim exemptions from withholding tax on compensation for services that are exempt from US tax under a US tax treaty. They must attach the appropriate statement from Publication 519, US Tax Guide for Aliens, to the Form 8233 and give it to the withholding agent. If the payee is not a student, trainee, teacher, or researcher, they can still use Form 8233 to eliminate or reduce the amount of tax withheld from their wages if the pay is exempt from US income tax under a tax treaty.

Frequently asked questions