International Students: Residency Options And Application Process

International students often have to navigate complex tax and residency requirements, which can vary depending on the country and region. For example, in the state of New York, full-time international students are generally considered non-residents for tax purposes, regardless of their length of stay. However, part-time international students and other categories of visitors, such as J-1 professors and scholars, may be considered residents if they meet certain criteria, such as having a place of abode in the state for a specified duration. Understanding residency requirements is crucial for international students to comply with tax laws and access the benefits and services provided to residents.

International students and residency applications

International students on F-1 visas in New York State

To be considered a resident of New York State for tax purposes, an individual must have a permanent place of abode in the state for the entire taxable year and spend at least 184 days in the state during that year. This is known as the Substantial Presence Test. If an international student on an F-1 visa meets these requirements, they may be considered a resident for tax purposes and must file a resident New York income tax return.

It is important to note that the rules for residency determination may vary depending on the student's level of education. Undergraduate students on F-1 visas are generally considered non-residents of New York State and should file the IT-203 non-resident tax form. Graduate students, on the other hand, may be treated as residents for tax purposes if they meet the Substantial Presence Test and have a permanent place of abode in the state.

Additionally, international students on F-1 visas should be aware that their New York State residency status follows their federal status. This means that if they are considered non-resident aliens for federal tax purposes, they will also be considered non-resident aliens for New York State tax purposes. However, New York State does not always conform to federal tax laws, and residency requirements for international students may differ between the two.

In terms of tuition fees, the requirements for qualifying for the resident rate at New York State universities are complex and vary across campuses. Generally, students must establish their domicile in New York State for a certain period before the registration period of a particular term. This usually involves having a permanent place of abode in the state and demonstrating intent to make New York their primary residence.

Non-resident alien status for federal income tax

For federal income tax purposes, a non-resident alien is an individual who is not a US citizen or national and has not passed the green card test or the substantial presence test. Non-resident aliens are generally subject to US income tax on their US-source income, which can be divided into two categories:

• Income that is effectively connected with a trade or business in the United States; and
• US-source income that is fixed, determinable, annual, or periodical (FDAP).

If a non-resident alien is engaged in a trade or business in the US, they must pay US tax on their effectively connected income, after allowable deductions, at the same rates that apply to US citizens and residents. This includes individuals on an "F", "J", "M", or "Q" visa, such as students, teachers, or trainees who are temporarily present in the United States. Wages, tips, scholarship and fellowship grants, dividends, and interest are generally considered effectively connected income.

FDAP income, on the other hand, is taxed at a flat 30% rate (or lower treaty rate, if applicable) and no deductions are allowed. Examples of FDAP income include interest, dividends, royalties, rents, and annuities. It is important to note that a non-resident alien may have both types of income in the same year, and they will be taxed accordingly.

Non-resident aliens who are required to file a US income tax return must use Form 1040-NR, US Nonresident Alien Income Tax Return. The filing deadline is generally the 15th day of the 4th month after the tax year ends (April 15 for those filing using a calendar year), if the individual is an employee or self-employed with income subject to US income tax withholding, or if they have an office or place of business in the United States. Otherwise, the deadline is the 15th day of the 6th month after the tax year ends (June 15 for those filing using a calendar year).

It is important to consult the Internal Revenue Service (IRS) guidelines or a tax professional for detailed information on non-resident alien status and tax obligations, as there may be additional considerations or exceptions.

State residency status vs. federal status

International students with visas can apply for residency programs in the United States. However, the process of obtaining a visa and maintaining status can be challenging due to the lack of mentors who can provide guidance. To increase their chances of being matched to a residency program, international medical graduates should submit applications to a minimum of 25 programs and register with the National Resident Matching Program (NRMP).

In the United States, the federal government and individual states have separate systems for determining residency status, which can lead to differences in an individual's residency classification at the state and federal levels.

Federal Residency Status:

The Internal Revenue Service (IRS) is responsible for collecting federal income tax. The IRS determines residency status for federal tax purposes using two tests: the 'green card' test and the 'substantial presence' test (SPT). The green card test is based on an individual's immigration status, while the SPT considers the number of days an individual is physically present in the United States. Nonresident aliens, including most international students on F-1 or J-1 visas, are typically considered nonresidents for federal tax purposes for the first five years of their student status. After that, they can start counting days of presence for the SPT, and if they meet the requirements, their status changes to resident for tax purposes.

State Residency Status:

State residency status is determined by each individual state, and the rules and regulations vary. While some states may use the same tests as the IRS to determine residency, others may have different criteria. As a result, an individual can be considered a nonresident for federal tax purposes but a resident for state tax purposes, or vice versa. It is important for international students to understand the specific requirements of the state in which they are located to determine their correct state residency status.

Criteria for New York residency status

To establish New York residency status, an individual must meet certain criteria. Firstly, they must demonstrate that they have abandoned their former state of domicile and established New York as their new domicile. This involves more than just physical presence in the state; it requires an affirmative decision to adopt New York as one's permanent home and the place to which one intends to return after absences.

For students, the criteria for establishing New York residency status vary depending on the educational institution and level of study. At the State University of New York (SUNY), each individual campus determines a student's residency status, and there are specific requirements for undergraduate and graduate students. Undergraduate students who are financially dependent on their parents or legal guardians generally take on the residency status of their parents or guardians. If the custodial parent lives outside of New York, the student is generally not eligible for the resident tuition rate. However, if the student's parents are divorced or legally separated, they may acquire New York residency if the custodial parent is a New York resident or if they reside with a non-custodial parent who is a New York resident and intend to continue living with them during their time at SUNY. Additionally, students who have graduated from a New York high school or received a New York high school equivalency diploma within five years of applying to SUNY may be eligible for resident tuition rates even if they are non-residents.

For graduate students, the criteria are different. To establish New York residency for tuition purposes, a student must demonstrate that they have had a New York domicile for at least twelve months before the start of the semester. This can include leased apartments on university property, but living in college residence halls is generally considered temporary housing and does not count towards establishing residency.

International students on F-1 visas are considered non-residents of New York for tax purposes and should file the NY nonresident tax form IT-203. However, there are exceptions for graduate students, who may be treated as residents for tax purposes. Additionally, certain non-resident international students, including those who are undocumented or out-of-status, may be eligible for resident tuition rates if they have attended a New York high school for at least two years and graduated or obtained a New York GED diploma, applying to college within five years of receiving their diploma.

For all students, proof of New York residency or domicile may be demonstrated through various documents, including a New York State driver's license, proof of public assistance from New York State, proof of New York State income tax payments, and more.

International students and tax filing

International students in the US on F or J visas are required to file taxes once per year for their first five years in the country. This is the case even if they do not have any US source income. However, students who only have income from a US savings or loan institution, a US credit union, a US insurance company, or certain types of investments or scholarships do not need to file taxes.

The Internal Revenue Service (IRS) is the US tax collection agency. The US tax system is a pay-as-you-go system, meaning that taxes are usually automatically withheld from your paychecks, stipends, or financial aid. This is estimated based on information provided in your W-4 form and other tax documents, as well as your tax filing status and possibly your residency.

To file your taxes, you will need to determine your federal tax filing status: nonresident tax filer or resident tax filer. This status determines how you are taxed and which forms you need to fill out. Even if you did not earn any income during your time as an F-1 student in the US, you still have a filing requirement. You will need to file Form 8843 with the IRS by the deadline, which is usually in April. You may also be required to file a state tax return, depending on the state. If you received US-sourced income during the calendar year, you will likely need to file Form 1040-NR as well.

If you have paid more taxes than you owe, you are eligible for a refund. If you have paid less than you owe, you will need to pay the difference. You can call the IRS directly at 1-800-829-1040 for guidance on tax-related questions.

Frequently asked questions