International Students: Getting Paid By Employers

International students who are neither citizens nor permanent residents of the United States can obtain temporary work authorization, but they must confirm their eligibility to work with their employer before their employment start date. In the US, international students can be paid by their employers, but they must have a Social Security Number and are subject to federal and state income tax withholding.

International students' exemption from Social Security and Medicare taxes

International students on F-1, J-1, or M-1 non-immigrant visas in the United States are generally treated as non-resident aliens for tax purposes and are exempt from Social Security and Medicare taxes if they meet certain criteria.

Criteria for Exemption:

• The individual must be a non-resident alien for tax purposes.
• The individual must be present in the US on an F, J, M, or Q visa.
• The individual must be performing services in accordance with the primary purpose of the visa's issuance.
• The student must be enrolled at least half-time at the school, college, or university where they are employed.
• The student's on-campus employment must be incidental to and for the purpose of pursuing a course of study.

It is important to note that this exemption does not apply to F-1, J-1, or M-1 students who change to another immigration status that is not exempt or to a special protected status. Additionally, students who have been in the United States for more than five calendar years may become resident aliens for tax purposes and may be liable for Social Security and Medicare taxes.

Obtaining a Refund for Taxes Withheld in Error:

If an employer withholds Social Security or Medicare taxes in error, the student can contact the employer to request a refund. If a full refund is not provided by the employer, the student can file a claim with the Internal Revenue Service (IRS) using Form 843 and Form 8316, along with supporting documents. This process can take several months, and students should wait at least 60 days before checking the status of their refund request.

Work Authorization for International Students:

International students seeking employment in the United States must obtain work authorization, such as Curricular Practical Training (CPT) or Optional Practical Training (OPT). Employers should confirm an international student's work authorization before the employment start date to prevent any liability for the student and the employer.

International students' eligibility for Curricular Practical Training (CPT)

International students on an F-1 visa can undertake paid work in the United States through Curricular Practical Training (CPT). CPT is a form of work authorization that allows F-1 students to gain practical experience in their academic field after completing one year of full-time study. This can include internships, which are common CPT opportunities, and students can choose to work full or part-time during these placements.

To be eligible for CPT, international students must meet several requirements. Firstly, they must have already completed one year of full-time study, although graduate students may be exempt from this rule if their academic program requires them to participate in an internship during their first year. Secondly, undergraduate students must have already declared a major. If the employment or internship is not a requirement of the degree program, the student's department must offer a specific CPT course during that quarter. Students must also be enrolled in the CPT course and meet any additional requirements set by their department, such as a minimum number of units to be taken concurrently with the CPT course.

The CPT application process involves several steps. Students must obtain approval from their departmental approver, who will then forward the request for processing. At Stanford University, for example, the processing time for a CPT application is 5 to 10 business days. Students will then receive an email notification once their new I-20 form, with CPT authorization, is approved and ready. It is important to note that students cannot begin working until they have received this CPT-approved I-20 form.

Additionally, students must provide details of their prospective employer, including the company name and address where the training will take place. They must also explain how the employment is curricular and integral to their established curriculum. While school is in session, students must maintain a full course of study even when CPT is authorized, and they cannot work more than 20 hours per week.

It is worth noting that CPT is only required for training inside the United States. For instance, if a student plans to complete a summer internship in their home country, CPT authorization is not necessary. Furthermore, students who have worked on-campus for 20 hours per week or have a 50% RA/TA-ship during the school year are ineligible for CPT while school is in session.

International students' visa requirements for employment

International students who wish to work in the United States must obtain a visa with temporary US work authorization. The process for hiring international students for internships and full-time opportunities is well-established and straightforward.

There are two non-immigrant visa categories for international students wishing to study in the US: the F-1 Visa (Academic Student) and the M-1 Visa (Vocational Student). The F-1 Visa is for full-time international students pursuing accredited academic studies, while the M-1 Visa is for those in vocational or non-academic programs. F-1 students may not work off-campus during their first academic year but may accept on-campus employment. After the first year, F-1 students may engage in three types of off-campus employment: Curricular Practical Training (CPT), Optional Practical Training (OPT), and Science, Technology, Engineering, and Mathematics (STEM) OPT. CPT allows F-1 students to accept practical training in their academic field and can include full or part-time internships. OPT and STEM OPT allow F-1 students to work off-campus in any field, with STEM OPT being for students in STEM fields specifically.

M-1 students can also engage in CPT, but the training must be related to their area of study and authorized by the Designated School Official and U.S. Citizenship and Immigration Services (USCIS). USCIS will only authorize off-campus employment for F-1 and M-1 students in cases of severe economic hardship after enrollment or in emergent circumstances, such as natural disasters or financial crises.

Additionally, there is the J-1 exchange visitor visa for foreign nationals participating in work-and-study exchange programs as visiting scholars, camp counselors, au pairs, or research assistants.

For employment, the employer must file the H-1B petition on behalf of the international employee, which can cost between $3,000 and $8,000. The employer must also confirm the student's work authorization before the employment start date to prevent any liability for the student and employer.

It is important to note that nonimmigrant students who earn self-employment income in the US may be subject to US income tax and, if they become resident aliens, self-employment tax. However, certain classes of foreign employees are exempt from Social Security and Medicare taxes, including F-1, J-1, and M-1 students temporarily present in the US for less than five years.

International students' tax requirements for employment

International students in the US have certain tax requirements and obligations when it comes to employment. These requirements vary depending on factors such as the student's visa status, residency status, and the type of income earned. Here is an overview of the tax requirements for international students seeking employment in the US:

Visa and Residency Status:

International students in the US typically hold non-immigrant visas, such as F-1, J-1, or M-1 visas. The visa status plays a crucial role in determining tax obligations:

• F-1, J-1, and M-1 students are generally considered nonresident tax filers for their first five calendar years in the US. After five years, they may become resident tax filers.
• Students with F-1 visas are considered nonresident aliens for tax purposes and are required to file taxes if they have income from US sources.
• Students who change their immigration status from F-1, J-1, or M-1 to another non-exempt status may lose certain tax exemptions.

Income Tax:

• International students are required to file a US tax return if they have earned income during the previous calendar year. This includes income from employment, scholarships, fellowships, or other taxable sources.
• The US tax system operates on a pay-as-you-go basis, with automatic tax withholdings from paychecks or stipends. These withholdings are estimated based on information provided in tax documents, such as Form W-4.
• When filing taxes, international students must determine their federal tax filing status (nonresident or resident tax filer) and use the appropriate forms, such as Form 1040-NR for nonresident aliens.
• Federal income tax is levied by the Internal Revenue Service (IRS) on annual earnings and applies to all forms of income, including employment earnings.
• In addition to federal income tax, most states in the US collect state income tax. Tax rates and deductions vary by state, so students should refer to their specific state's guidelines.

Social Security and Medicare Taxes:

• International students on F-1, J-1, or M-1 visas who have been in the US for less than five calendar years are generally exempt from Social Security and Medicare taxes on wages earned for services performed within the US.
• Students employed by a school, college, or university where they are enrolled at least half-time may be exempt from Social Security and Medicare taxes under the "'student FICA exemption.'"
• However, if a non-immigrant student earns self-employment income, they may become subject to US income tax and, if they become a resident alien, self-employment tax as well.

Tax Refunds and Treaties:

• International students may be eligible for tax refunds, especially if their scholarships are covered by a tax treaty.
• Some countries have Totalization Agreements with the US to avoid double taxation of income with respect to Social Security taxes. These agreements must be considered when determining an individual's tax liability.

It is important for international students to carefully review their specific visa requirements, tax treaties between their country and the US, and consult reliable sources or tax professionals for accurate and up-to-date information regarding their tax obligations.

International students' work authorization

International students who are neither US citizens nor permanent residents can enrol in academic programmes under one of two non-immigrant student immigration statuses: F-1 (Academic Student) or M-1 (Vocational Student).

F-1 Visa

The F-1 Visa allows international students to enter the US as full-time students at an accredited college, university, school, seminary, conservatory, or other academic institutions. F-1 students may not work off-campus during their first academic year but may accept on-campus employment subject to certain conditions and restrictions. After the first academic year, F-1 students may engage in three types of off-campus employment:

• Curricular Practical Training (CPT): CPT allows F-1 students to accept practical training in their academic field after one year of full-time study. Internship programs are some of the most common types of CPT opportunities for international students.
• Optional Practical Training (OPT): F-1 students may be eligible to work off-campus in Science, Technology, Engineering, and Mathematics (STEM) fields.
• Severe Economic Hardship: USCIS will authorize off-campus employment only in cases of severe economic hardship occurring after a student's enrollment in an academic program and after the student has been in F-1 status for at least one full academic year, or in emergent circumstances as defined by the Department of Homeland Security (DHS).

M-1 Visa

The M-1 Visa includes students in vocational or other non-academic programs, excluding language training. M-1 students can engage in off-campus employment with certain restrictions, including that the work must be related to their area of study and authorized by the Designated School Official (DSO) and USCIS.

Taxes

Foreign students in F-1, J-1, or M-1 non-immigrant status who have been in the US for less than five calendar years are generally considered nonresident aliens and are exempt from Social Security and Medicare taxes. However, if an F-1, J-1, or M-1 student changes their immigration status or becomes a resident alien, they may become liable for these taxes.

H-1B Visa

The H-1B visa is a type of work visa that allows international students to work in the US. The employer is responsible for filing the H-1B petition on behalf of the international employee, and the total cost, including attorney and USCIS application fees, can range from $3,000 to $8,000.

In conclusion, international students in the US have several options for obtaining work authorization, depending on their visa status and other factors such as their field of study and the type of employment. It is important for employers to confirm an international student's work authorization prior to the employment start date to prevent any liability for the student and the employer.

Frequently asked questions