Ibrahim Gardner
International students in the US on an F-1 visa are considered non-residents for tax purposes and are taxed only on US-source income. They must file their tax returns if they were in the US during the previous calendar year and earned an income. While TurboTax is the biggest online tax preparation service in the US, it is only for US residents. International students on F-1 visas can use Sprintax, the non-resident partner of TurboTax, to file their tax returns. However, some sources suggest that international students can use TurboTax if they have been in the US for more than five calendar years.
| Characteristics | Values |
|---|---|
| Who can use TurboTax? | US residents |
| Who cannot use TurboTax? | Non-residents, including F-1 international students |
| Who is a non-resident for tax purposes? | Foreign students in the US, including those on F-1 visas |
| What form do non-residents need to file? | Form 1040-NR |
| What is a non-resident alien? | A non-US citizen without a green card, legally present in the US |
| What is Sprintax? | The non-resident partner of TurboTax, which international students can use |
| What does Sprintax do? | Helps international students prepare Form 1040-NR and check for exemptions, expenses, deductions, and international tax treaty agreements |
| What is the difference between resident and non-resident taxes? | Residents are taxed on all income in and outside the USA, while non-residents are taxed only on income in the USA |
| What is the Substantial Presence Test? | A rule to determine residency for tax purposes; if an individual is physically present in the US for at least 183 days over a three-year period, they are considered a resident |
What You'll Learn
F1 students and tax residency
F1 students are generally considered nonresident aliens for tax purposes in the US for the first five calendar years of their stay. This means that they are only taxed on US-source income. After five years, they are considered residents for tax purposes and must take the Substantial Presence Test. This test determines whether an individual who is not a US citizen or permanent resident should be taxed as a resident or nonresident alien for a specific year.
As nonresidents, F1 students are required to file a US tax return (Form 1040-NR) for income from US sources. This form cannot be filed using popular tax preparation software like TurboTax and TaxAct, as they do not have the functionality for nonresident tax returns. Instead, F1 students can use Sprintax, which is the nonresident partner of TurboTax and the only online federal and state self-prep tax software for nonresidents in the US. With Sprintax, F1 students can easily prepare a fully compliant 1040-NR (nonresident tax return) and Form 8843 tax documents.
It is important to note that F1 students may also have to file a state tax return and pay state income tax, even when no federal return is due, as tax rates and deductions differ across US states. Additionally, F1 students with income from Optional Practical Training (OPT) will be required to pay tax and fill in a W-4 tax form with their employer.
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Nonresident tax returns
F-1 visa students in the US are typically 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. Every international student is required to file their tax return if they were in the US during the previous calendar year and earned income.
International students on F-1 visas are required to pay tax in the US on the following types of income:
- Wages and compensation
- US savings and loan institutions
- US credit unions
- US insurance companies
- Investment that generates portfolio interest
- Scholarship or fellowship grant that is entirely tax-free
If you are an international student and need to file Form 1040-NR, you will not be able to use TurboTax. TurboTax is a service for US residents. If you do use TurboTax to file your US taxes, you will be filing as a resident, which means your tax return will be inaccurate and you may be subject to fines and penalties.
Sprintax is the nonresident partner of choice for TurboTax and the only online federal and state self-prep tax software for nonresidents in the US. By creating a Sprintax account, you can easily prepare a fully compliant 1040NR (nonresident tax return) and Form 8843 tax documents. Sprintax can also help you prepare your pre-employment tax documents.
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State tax
As an international student on an F1 visa, you are considered a nonresident alien for tax purposes for the first five calendar years of your stay in the US. This means that you are not required to pay taxes on income from foreign sources. You only pay taxes on income that is derived from a US source.
If you have earned income in the US during the year, you will need to file a federal tax return (Form 1040-NR) to report your federal income and taxes. Even if you did not earn money during your time in the US, you will still need to file Form 8843. You will need your Social Security Number or Tax Identification Number (ITIN) and your W-2 form, which reports your wages and taxes withheld.
Depending on the state, you may also be required to file a state tax return. Most states in the US will collect state income tax in addition to federal income tax, and tax rates and deductions will differ for each state. Nine states do not have any tax-filing requirements. If you are required to file a state tax return, you will need to submit it by the same date as your federal tax return.
You can use Sprintax, the official nonresident tax partner of TurboTax, to file your nonresident federal tax return online. However, you cannot use TurboTax to file your state tax return. To file your state tax return, you can either print and submit the paper Form 1040NR for free or prepare the 1040 NR electronically for free using special tax filing services provided by your university.
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International students and OPT
International students on F-1 visas are considered nonresident aliens for tax purposes for the first five calendar years of their stay in the US. This means that they will be taxed only on US-source income. Every international student is required to file their tax return if they were in the US during the previous calendar year and earned income.
OPT is a program that allows international students to work in the US after their graduation, and gain practical experience. Students with F-1 visas may apply for 12 months of OPT after each level of education completes. If you earn an income from an OPT, you will be required to pay tax. International students must also fill in a W-4 tax form with their new employer when they start work.
TurboTax is a service for US residents. If you are an international student and need to file Form 1040-NR, you will not be able to use TurboTax. TurboTax partners with Sprintax, which is the nonresident partner of choice for TurboTax and the only online federal and state self-prep tax software for nonresidents in the US. By creating a Sprintax account, you can easily prepare a fully compliant 1040NR (nonresident tax return) and form 8843 tax documents.
If you have already filed income tax returns using TurboTax and they have been approved by TurboTax, you may need to amend and correct your previous filing. You will need to go to the state website and locate their amended return form and print it and complete it. You can attach your correct nonresident state return to the state amendment before mailing. You cannot e-file an amended return. After your 1040NR is complete, print your 1040NR with Sprintax; do not e-file it. You must mail the 1040NR along with the amended return Form 1040X.
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Tax treaties
F-1 international students are considered nonresident aliens for tax purposes for the first five calendar years of their stay in the US. This means they are taxed only on US-source income. The US has income tax treaties with 65 countries. These treaties can reduce or eliminate US taxes on various types of income, such as pensions, interest, dividends, royalties, and capital gains.
International students can benefit from a tax treaty with their home country. For example, if you are an international student from India, you will likely not have to pay tax on any grants, scholarships, or remuneration from employment. This is covered under Article 21 of the US-India Income Tax Treaty. Similarly, Canadian citizens can be exempt from up to $10,000 in personal services if their total income is under or equal to $10,000. Korean international students are exempt from tax on any grant, allowance, award, or income ($2,000 or less) from personal services performed. French citizens are not subject to US tax on any income earned from gifts from abroad for the purpose of maintenance, education, study, research, or training.
To claim a tax treaty benefit on a non-compensatory scholarship or grant, you must fill out a W-8BEN form. To fill out your Form W-8BEN, you will need to provide personal information such as your name, TIN, and address in your country of residence. You will also need to describe the services provided and the total amount of income earned. If you pay too much tax during the year, you will be entitled to a tax refund.
Regarding the use of TurboTax, it is important to note that TurboTax is a service for US residents, and international students who are non-residents will not be able to use it to file their taxes. Sprintax, the nonresident partner of TurboTax, is a popular alternative for international students.
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Frequently asked questions
TurboTax is a service for US residents, so international F1 students are not able to use it. However, TurboTax partners with Sprintax, which is a tax preparation tool for international students and scholars in the US.
Residents are taxed for all income in the US and outside of the US, whereas non-residents are only taxed for income in the US.
The F-1 visa is a non-immigrant visa for those wishing to study in the US.
The substantial presence test determines whether you are considered a US resident for tax purposes. To meet this test, you must be physically present in the United States on at least 1/6 of the days you were present in the previous three years.
Yes, even if you don't owe any taxes, you still need to file a tax return as a foreign student.
