Douglas Olsen
International students in the US on an F-1 visa are considered nonresident aliens for tax purposes for the first five calendar years of their stay and are only taxed on US-source income. All international students inside the United States must file their tax returns each year, and every international student, along with their dependents, will need to file Form 8843 separately. If you have received income in the last calendar year, you will need to file Form 8843 and most likely Form 1040-NR as well. If you do not pass the substantial presence test, you will be classified as a nonresident alien for tax purposes, and you will need to file Form 1040-NR (federal tax return) to assess your federal income and taxes. If you have earned income in the US, you will need to file a tax return and pay taxes to the federal government and the state government in the state in which you reside.
| Characteristics | Values |
|---|---|
| Who needs to file a tax return? | All international students in the US on F, J, M, or Q visas. |
| When to file | April of each year for the preceding tax year (January 1 to December 31). |
| Forms | Form 8843, Form 1040-NR, and possibly Form W-4. |
| Tax status | Nonresident alien or resident tax filer. |
| Taxable income | US-source income, including salaries, gifts, and awards. |
| Tax treaties | The US has tax treaties with 65 countries, which may reduce or eliminate taxes on certain types of income. |
| Tax software | Sprintax is a popular tax software provided by some universities. |
| Tax refunds | If more tax was withheld than owed, a refund can be claimed. |
| Non-compliance | May result in visa processing delays and other documentation issues. |
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What You'll Learn
F-1 visa international students and tax treaties
International students in the US on an F-1 visa are considered nonresident aliens for tax purposes for the first five calendar years of their stay. This means that they are taxed only on US-source income. If an international student's country of residence has signed a tax treaty with the US, they may be partially or completely exempt from tax. The US has income tax treaties with 65 countries. These treaties can reduce or eliminate US taxes on income such as pensions, interest, dividends, royalties, and capital gains.
International students on F-1 visas who are considered nonresident aliens for tax purposes must pay tax in the US on taxable scholarship or fellowship grants, income partially or totally exempt from tax under the terms of a tax treaty, and any other income that is taxable under the Internal Revenue Code.
To claim a tax treaty benefit on income from personal services, compensatory scholarships, or grants received, international students will need to complete a Form 8233 and submit it to their university. This form requires personal information such as name, TIN, and address in the student's country of residence, as well as a description of the services provided and the total amount of income earned.
International students on F-1 visas are exempt from FICA taxes on wages paid to them for services performed within the US. They are also granted an exemption from social security and Medicare taxes. As a nonresident alien, an international student will need to file Form 1040-NR (federal tax return) to assess their federal income and taxes. It is important to comply with tax requirements, as missing deadlines or making mistakes on forms can result in fines and penalties, and may impact future visa or Green Card applications.
International students can also benefit from tax refunds. If more tax than owed has been withheld, a return can be filed to claim a refund for the excess amount. Many F-1 international students can claim tax refunds, including on their scholarships if they are completely or partially taxable.
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Tax exemptions for non-resident aliens
International students in the US on an F-1 visa are considered non-resident aliens for tax purposes for the first five calendar years of their stay. Non-resident aliens are taxed only on US-source income. This includes income from a US-based trade or business, as well as fixed, determinable, annual, or periodical (FDAP) income. FDAP income is taxed at a flat 30%, while effectively connected income is taxed at graduated rates, the same as those that apply to US citizens and residents.
There are several tax exemptions available to non-resident aliens. If your country of residence has signed a tax treaty with the US, you may be partially or completely exempt from tax. Additionally, the US has income tax treaties with 65 countries, which can often reduce or eliminate US tax on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains. For example, residents of South Korea and students and business apprentices from India may be able to claim exemptions for their spouse and dependents. Additionally, international students on F-1 visas are generally exempt from FICA taxes on wages for services performed within the US and are granted an exemption from social security and Medicare taxes.
Non-resident aliens who are required to file an income tax return must use Form 1040-NR, U.S. Nonresident Alien Income Tax Return. This form should be filed by the 15th day of the 4th month after the tax year ends, which is typically April 15. However, if you are not an employee or self-employed person with US income tax withholding, or you do not have an office or place of business in the US, you must file by June 15.
It is important to note that non-resident alien students and scholars with certain types of income, such as taxable scholarships or fellowship grants, income covered by a tax treaty, or other taxable income under the Internal Revenue Code, are required to file a tax return. On the other hand, those with income only from sources such as US savings and loan institutions or US credit unions are generally not required to file.
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Taxable income for international students
International students in the US on an F-1 visa are considered nonresident aliens for tax purposes for the first five calendar years of their stay. Nonresident aliens are taxed only on US-source income. This includes income from a taxable scholarship or fellowship grant, income that is exempt under a tax treaty, and any other income that is taxable under the Internal Revenue Code.
Nonresident aliens cannot claim the standard deduction, except for certain nonresident aliens from India, who can claim it under the US-India Income Tax Treaty. However, most nonresidents can use the State and Local Taxes (SALT) deduction on their Schedule A, 1040NR form. The SALT deduction reduces taxable income by the amount paid to state and local tax governments during the tax year, with a cap of $10,000.
If you are an international student with a taxable scholarship, you will receive a 1042-S form from your school or institution. To file your tax return, you will need your W-2 form, which reports your wages and taxes withheld, as well as your Social Security Number or Individual Taxpayer Identification Number (ITIN). You will also need to file Form 8843 and, most likely, Form 1040NR.
In Canada, international students' residency status for income tax purposes is determined by the residential ties they have established. If an international student has established significant residential ties with Canada, they are considered a resident for income tax purposes. If they have not established significant residential ties and stay in Canada for less than 183 days during the year, they are considered a non-resident for income tax purposes.
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Tax filing status
As an international student in the US, your tax filing status will depend on your visa type, income, and how long you have been in the country.
Nonresident tax filer
If you are on an F-1 visa, you will likely be considered a nonresident alien for tax purposes for the first five calendar years of your stay in the US. This means you will only be taxed on US-sourced income. However, if your country of residence has signed a tax treaty with the US, you may be partially or completely exempt from this tax. As a nonresident alien, you will need to file Form 1040-NR (federal tax return) to assess your federal income and taxes.
Resident tax filer
Some F-1 students may be considered 'resident' or 'resident aliens' for tax purposes, even though they continue to have a nonimmigrant visa status. You will be considered a resident for tax purposes if you pass the substantial presence test. J-1 and F-1 students usually become resident tax filers after being present in the US for five calendar years.
Tax treaties
The US has income tax treaties with 65 countries. For nonresident aliens, these treaties can often reduce or eliminate US tax on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains.
Tax refunds
If you have had more tax withheld than you owe, you should file a return to claim a refund for the excess amount.
Deadlines
The IRS deadline to file tax returns on the federal level is April 18, 2023. However, state deadlines will differ, and not all US states require that you file a tax return on the state level.
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Tax refunds
International students in the US on an F-1 visa are considered nonresident aliens for tax purposes for the first five calendar years of their stay. This means that they will be taxed only on US-source income. International students are required to file a tax return if they were in the US during the previous calendar year and earned income.
There are some cases where international students are not required to file a tax return, including if their income is only from a US savings and loan institution, a US credit union, a US insurance company, or an investment that generates portfolio interest.
International students can benefit from a tax treaty with their home country. The US has income tax treaties with 65 countries, which can often reduce or eliminate US tax on various types of income, such as pensions, interest, dividends, royalties, and capital gains.
If an international student has had more tax withheld than they owe, they can file a return to claim a refund for the excess amount. This is also the case if social security or Medicare taxes were withheld in error from pay that is not subject to these taxes. Many F-1 international students can claim tax refunds from the US, for example, on their scholarship if it is completely or partially covered by a tax treaty.
Sprintax is a popular resource for international students navigating US tax filing, offering 24-hour support and helping students to prepare a compliant tax return and reduce their income tax liability as much as possible.
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Frequently asked questions
Yes, international students are required to file a tax return if they were in the US during the previous calendar year and earned income.
Even if you didn't make any money, you still have to file a tax return as an international student. Failure to do so may result in visa processing delays.
You can file your tax return by yourself, as the forms are available online from the IRS. Alternatively, you can seek help from an advisor or a reputable service for a fee.
The IRS deadline to file tax returns on the federal level is April 18, 2023. However, state deadlines may differ, and not all US states require that you file a tax return on the state level.
All international students must file Form 8843. If you have received income in the last calendar year, you will likely also need to file Form 1040-NR.
