International Students: Can They Become State Residents?

International students often face challenges when it comes to determining their residency status in a foreign country, especially when it comes to accessing benefits reserved for state residents, such as lower in-state tuition fees and state education grants. While the criteria vary across states in the United States, the duration of stay, physical presence, and intent to reside in the state are often considered key factors in determining whether an international student can be classified as a state resident. This article will explore the specific requirements and exemptions that international students must navigate to establish state residency and understand their rights and benefits.

Can an international student be a state resident?

International students and tax residency

International students' tax residency status depends on the country in which they are studying and their visa status. In the United States, international students in F-1, J-1, or M-1 nonimmigrant status are generally considered nonresident aliens for tax purposes for the first five calendar years of their stay. After five calendar years, they may become resident aliens for US tax purposes if they meet the "Substantial Presence Test".

Resident aliens for tax purposes file taxes in the same manner as US citizens and residents. However, it is important to note that being a "resident" for tax purposes does not mean the same thing as being a resident for tuition purposes or a US permanent resident.

International students in the US on F-1, J-1, or M-1 visas are exempt from Social Security Tax and Medicare Tax on wages for services performed within the United States for up to five calendar years. After this period, they may become liable for these taxes. Additionally, certain classes of alien employees are exempt from US Social Security and Medicare taxes.

In Canada, international students are considered one of the following types of residents for income tax purposes: resident, non-resident, or deemed resident/non-resident. Residency status is based on the residential ties an individual has with Canada. If an international student establishes significant residential ties with Canada and stays in the country for at least 183 days in a calendar year, they are considered a resident for income tax purposes. If they do not meet these criteria, they are considered a non-resident for income tax purposes.

Continuous physical presence

To satisfy the continuous physical presence requirement, applicants must demonstrate their actual physical presence in the United States for a specified period. This typically means being physically present in the country for at least half of the required continuous residence period. For instance, an applicant who needs to establish a continuous residence of 5 years must apply for naturalization 4 years and 1 day after returning to the United States. This is known as the "four years and one day" rule.

The specific duration of physical presence required varies. Generally, applicants must have 30 months of physical presence in the U.S. to be eligible for naturalized citizenship. However, this requirement is reduced to 18 months if filing Form N-400 based on marriage to a U.S. citizen. It's important to note that absences from the U.S. can disrupt an applicant's continuous physical presence. Absences exceeding six months but less than a year may impact an applicant's continuous residence unless they can provide valid reasons. Absences of one year or more are more likely to disrupt an applicant's continuous residence.

To prove their physical presence, applicants must provide documentation, and their testimony may also be considered. USCIS will count the day an applicant departs from and returns to the U.S. as days of physical presence. Certain exceptions to the continuous physical presence requirement exist, such as for applicants working abroad for the U.S. government, recognized American research institutions, or specific religious organizations. To preserve their continuous residence status while working abroad for such entities, applicants must file Form N-470.

In-state tuition rates

International students are generally not eligible for in-state tuition rates, as these are reserved for domestic students. However, there are some ways that international students can qualify for in-state tuition rates or reduce their overall tuition costs.

Firstly, some universities offer in-state tuition rates to international students who demonstrate financial need or outstanding academic achievement. For example, Texas State universities allow international students to apply for in-state tuition rates if they meet certain criteria. Similarly, Arizona State University (ASU) offers merit-based scholarships to international students with high academic achievement, which can help offset the higher out-of-state tuition fees.

Secondly, international students can sometimes qualify for in-state tuition rates by establishing residency in the state where they plan to attend university. The requirements for establishing residency vary by state, but it typically involves living in the state for at least one year prior to enrolling in university. It's important to note that simply being enrolled in a university in that state does not automatically make someone a resident for tuition purposes.

Thirdly, international students can also explore other forms of financial aid, such as scholarships, grants, and work-study programs, to help reduce the overall cost of their education. For example, Penn State University offers the Provost's Award to first-time, first-year students at any of its undergraduate campuses, including international students. Additionally, international students can fill out the Free Application for Federal Student Aid (FAFSA) to determine their eligibility for certain types of financial aid. While international students are not eligible for federal and state financial aid, they may qualify for other forms of assistance through the university or private organizations.

Finally, international students should also be aware of the tax implications of their tuition fees. In some cases, international students may be considered resident aliens for tax purposes if they have been in the United States for more than five calendar years and meet the "Substantial Presence Test". This could impact their tax liability and overall cost of attendance.

In conclusion, while international students typically pay out-of-state tuition rates, there are several options available to help reduce their overall tuition costs. These include seeking in-state tuition rates, establishing state residency, applying for scholarships and financial aid, and considering the tax implications. It is important for international students to carefully research the requirements and options offered by their desired universities to make an informed decision about their education.

Immigration laws and self-employment

International students in the US on F-1, J-1, or M-1 nonimmigrant visas are generally considered nonresident aliens and are exempt from paying Social Security and Medicare taxes. However, if they have been in the US for more than five calendar years, they may become resident aliens for tax purposes and be liable for these taxes.

Now, regarding immigration laws and self-employment, it is important to note that US immigration law is complex, and self-employment has specific requirements and considerations. Here are some key points to understand:

• Definition of Self-Employment: Self-employment refers to working for oneself as a freelancer or independent contractor, rather than for an employer. It can also include owning and operating a business.
• Visa Requirements: To work in the United States, including as a self-employed individual, non-citizens typically need a visa. While there are no specific self-employment visas, several visa options can allow for self-employment:

• International Entrepreneur Rule (IER): The Department of Homeland Security (DHS) may grant parole (temporary authorization to stay) to non-citizen entrepreneurs on a case-by-case basis. This option is for those whose stay would provide a significant public benefit through their business venture.
• O-1 Visa: This visa is for individuals with extraordinary abilities or achievements in fields such as science, business, education, or athletics. It allows for some self-employment flexibility, as the contractual agreement can be with an agent rather than a specific employer.
• H-1B Visa: This visa is for specialty occupations requiring specialized knowledge and a bachelor's degree or higher. It typically involves employer sponsorship, but extensions beyond the initial six-year limit may be available for those seeking permanent resident status.
• Adjustment of Status: In some cases, individuals may be able to adjust their status to become lawful permanent residents, which can provide more flexibility in employment and self-employment opportunities.

• Tax Considerations: Self-employed individuals in the US, including non-citizens, generally have tax obligations. They may need to pay income tax, self-employment tax, and Social Security and Medicare taxes (unless exempt). It is important to consult with tax professionals to understand the specific tax requirements and any applicable tax treaties between the US and the individual's country of citizenship.
• Contractual Agreements: When working as a self-employed individual in the US, contractual agreements are essential. These agreements should outline the terms and conditions of employment, including compensation. The contractual agreement between a foreign national and their agent or employer must be submitted to US Citizenship and Immigration Services (USCIS).
• Employment Authorization: Non-citizens in the US on certain types of visas may need to obtain employment authorization before they can legally work, including self-employment. This can involve changing their nonimmigrant status to a category that allows employment.
• Visa Application Process: The process of obtaining a visa for self-employment in the US can be complex and may involve multiple steps. It often requires submitting petitions or applications to USCIS, obtaining approval, and then applying for the visa through the US Department of State (DOS). The specific steps and requirements can vary depending on the visa category.

In summary, while it is possible for non-citizens to engage in self-employment in the United States, it is essential to navigate the complex immigration laws and visa options with the guidance of legal professionals. Each case is unique, and seeking personalized advice is crucial to ensuring compliance with US immigration regulations.

State residency requirements

To establish state residency, individuals should demonstrate continuous physical presence and activities in the state. This can include belonging to local groups, organizations, clubs, or fraternities. The individual should have stronger ties to the state than to any other, and their connection should not have commenced around the time of their college application or acceptance. Most states require independent students or their spouses to have been residents for at least a year before the first day of classes, while some states, like Arizona and California, mandate two years of residency and self-sufficiency.

Some states, like Minnesota, require a full calendar year of residency, emphasizing the twelve months prior to the first day of classes. Arkansas requires six months of residency, while Alaska requires 24 months. Tennessee does not have a durational component to its residency requirements. For dependent students, at least one parent must be a state resident, typically for a full year before the student enters college. Nebraska does not impose a minimum residency period for parents of dependent students but adheres to the one-year standard for independent students.

To substantiate state residency claims, individuals should present at least two government-issued documents. Examples include a voter registration card and registration with the state's Selective Service. Exceptions to standard residency requirements are often made for military personnel, children of first responders, orphans, students with dependents, teachers, and government employees.

Regarding taxation, foreign students in the United States for less than five calendar years are typically considered nonresident aliens, exempt from Social Security and Medicare taxes on wages earned for services performed within the country. However, if foreign students in F-1, J-1, or M-1 nonimmigrant status stay in the United States for more than five calendar years, they may become resident aliens for tax purposes and be liable for Social Security and Medicare taxes.

Frequently asked questions