Douglas Olsen
International students in the US are required to file a tax return each year, regardless of income. This is a condition of their visa, and failure to do so could result in problems with future visa applications or even revocation of their current visa. International students are considered nonresidents for tax purposes and are therefore taxed differently. They may also be eligible for certain benefits and exemptions. To file a tax return, international students must apply for an Individual Taxpayer Identification Number (ITIN) or a Social Security Number (SSN).
| Characteristics | Values |
|---|---|
| Who needs to apply for a tax return? | International students in the US on F, J, M, or Q visas are considered "exempt individuals" for the first 5 years. |
| International students in Canada who have established significant residential ties are considered residents for tax purposes. | |
| International students in Canada who have not established significant residential ties and stay in Canada for less than 183 days are considered non-residents for tax purposes. | |
| What do international students need to apply for a tax return? | An Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). |
| W-2, 1042-S, 1099, W-4, 1040-NR, 1040NREZ, 8843, and other forms depending on the state. | |
| When do international students need to apply for a tax return? | By April of the following year. |
| Where do international students need to apply for a tax return? | To the Internal Revenue Service (IRS). |
| Why do international students need to apply for a tax return? | To document their income from the previous year and determine if additional tax is owed or if a refund is available. |
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What You'll Learn
International students in the US
International students on F-1 visas are considered nonresident aliens for tax purposes and are required to file a US tax return (form 1040-NR) for income from US sources. They are not required to pay FICA tax, unless they have been in the US for more than five years. Students with F-1 visas may apply for OPT after each level of education is complete, which allows them to work in the US after graduation and gain practical experience. If an F-1 student earns an income from an OPT, they will be required to pay tax.
International students on F, J, M, or Q visas are considered "exempt individuals," meaning they are excused from the Substantial Presence Test for the first five years they are in the US. After this period, they will be subject to the Substantial Presence Test, which is used to determine if someone was in the US long enough to be considered a resident.
To file a tax return, international students will need an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). If an international student has not received any income and only needs to file Form 8843, then they do not need either an SSN or ITIN.
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International students in Canada
As an international student in Canada, you may need to file a Canadian income tax return. Your residency status will determine your income tax obligations to Canada.
If you are a resident for tax purposes, you may be eligible for benefit and credit payments, including GST/HST credits, tuition carry-forward credits, and other provincial credits or tuition rebates. To be considered a resident, you must establish significant residential ties with Canada. This could include owning a home in Canada, having a spouse or common-law partner, or having a dependent who is moving to Canada to live with you. If you are a resident, you will be taxed on all income you receive, regardless of where it comes from, but you can claim any taxes you paid to a foreign government as a foreign tax credit.
If you are a non-resident, you are not eligible for benefits or credits. You are considered a non-resident if you do not have significant residential ties with Canada and you stay in Canada for less than 183 days during the year.
Even if you are a non-resident, you may still need to file a tax return if you received income from Canadian sources, such as employment income or income from teaching and/or research assistantships. You generally must also report any income you receive from outside of Canada. However, if your country has a tax treaty with Canada, you may not have to pay Canadian income tax on this income.
As an international student, you may also be able to claim tuition credits, as well as the interest you paid on your student loans.
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F-1 visa and tax residency
International students on an F-1 visa are considered nonresident aliens for tax purposes in the US. This means that they are only taxed on US-source income. There are three main types of residency for tax purposes in the US: residents, nonresidents, and dual-status aliens. Most F-1 visa holders will be considered nonresident aliens.
F-1 visa holders are exempt from Social Security Tax and Medicare Tax on wages for services performed within the US. This exemption applies to students who have been in the US for less than five calendar years and are in F-1, J-1, or M-1 status. To qualify for this exemption, the services performed must be allowed by USCIS for these nonimmigrant statuses and must be carried out to fulfil the purpose for which the visa was issued.
F-1 students will be considered exempt individuals for the first five calendar years of their time in the US. After this period, they may become resident aliens for tax purposes if they meet the Substantial Presence Test. This test is used by the IRS to determine 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.
International students on an F-1 visa are required to file a US tax return (Form 1040-NR) for income from US sources. Even if they did not earn any income during their time as an F-1 student, they must still file Form 8843 with the IRS before the deadline. This form is a statement required by the US government for certain nonresident aliens who are in the US on F-1, J-1, F-2, or J-2 visas for purposes of the Substantial Presence Test.
In some cases, F-1 students may be able to claim a tax treaty with their home country, which can reduce or fully exempt their income from taxes. The US has income tax treaties with 65 countries, and these treaties can provide reduced tax rates or exemptions on certain types of income.
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Tax refunds for international students
International students in the US are required to file a tax return with the Internal Revenue Service (IRS) each year they are in the country. This applies to students on F, J, M, or Q visas, who are considered "exempt individuals" for the first five years in the US. However, this does not mean that they will pay taxes to the US government, as international students are entitled to benefits and exemptions.
To file a tax return, international students must first determine their residency status for tax purposes, which is different from their immigration status. Most international students are considered nonresidents for tax purposes and are taxed as nonresident aliens. However, some students may be considered resident tax filers even if they have a nonimmigrant visa status. This status may change over time, so it is important to review the guidelines each year.
International students may need to file both federal and state tax returns. Nine states do not have any tax-filing requirements, while other states, like Connecticut and Indiana, require international students to file a state tax return. To file federal tax returns, international students can use tax preparation software like Sprintax, which is provided by some universities.
Regarding tax refunds, international students may be able to claim tax refunds from the US. For example, F-1 students can claim a tax refund on their scholarship if it is covered by a tax treaty. Additionally, if social security or Medicare taxes were withheld in error, students can contact their employer for a refund or file a claim with the IRS.
In Canada, international students' tax obligations depend on their residency status. Students who do not establish significant residential ties with Canada and stay in the country for less than 183 days per year are considered non-residents for tax purposes. Those who establish significant residential ties and meet certain conditions may be deemed residents or non-residents for income tax purposes.
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Tax preparation software
International students in the US are subject to taxation on the money they earn while studying in the country. While not all international students will pay taxes to the American government, they are required to file a tax return as a condition of their visa.
International students may be required to pay federal income tax and state income tax, depending on their income and the state they live in. Nine US states, including Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming, do not apply state income tax.
There are several tax preparation software and services available for international students to help them with their tax returns. Here is some software that can be useful for international students:
- Sprintax: This is an online tax software that helps international students and scholars prepare their state and federal tax returns. It is user-friendly and offers dedicated customer support. Sprintax is partnered with major universities to let students fill out their federal returns free of cost. It also offers a discount for students at the University of Michigan.
- GLACIER Tax Prep: This software can be used by F-1 OPT students or J-1 students on Academic Training at the University of Michigan.
- Turbotax: A commercial tax software that can be used to prepare tax returns.
- H&R Block At Home™: A commercial tax preparation website that can be used to prepare tax returns.
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Frequently asked questions
Yes, all international students are required to file a tax return with the Internal Revenue Service (IRS) each year they are in the US.
This depends on your residency status for tax purposes, which is different from your immigration status. If you are a nonresident for tax purposes, you will need to file a nonresident tax return. If you are a resident for tax purposes, you will need to file a resident tax return.
If you are on an F or J visa, you are likely a nonresident for tax purposes. If you have been in the US for less than five years, you are exempt from the Substantial Presence Test, which is used to determine if someone is a resident for tax purposes.
You will need to fill out a tax return form, such as Form 1040-NR or 1040-NREZ, and mail it to the IRS along with any supporting documents. You may also need a W-2, 1042-S, or 1099 form, which will be mailed to you by your university or employer if applicable.
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