Lana Oconnell
International students in the US are required to file tax returns, but the type of tax form they need to fill out depends on their residency status for tax purposes. The Internal Revenue Service (IRS) of the United States classifies people as either Residents for Taxes or Nonresidents for Taxes. Nonresidents for Taxes are non-immigrants who do not meet the standards of the Substantial Presence Test or are exempt from taking it. F-1 students are exempt from the Substantial Presence Test for their first five years in the US and are considered non-residents for tax purposes during this time. Nonresident international students should file Form 1040-NR or 1040-NR-EZ, while resident international students should file Form 1040.
| Characteristics | Values |
|---|---|
| Who should file Form 1040-NR? | International students on an F-1 or J-1 visa who have been in the US for 5 years or less |
| Who should file Form 1040? | International students on an F-1 or J-1 visa who have been in the US for more than 5 years |
| Who can use tax preparation software like TurboTax, H&R Block, etc.? | Only those who are considered US residents for tax purposes |
| Who can use Sprintax? | International students filing as non-residents |
| Who should file Form 8843? | International students who did not work or earn income in the US but were in the country during the past year |
| Who should not file Form 8843? | International students who are required to file tax returns |
| Who should file Form 1042-S? | International students receiving scholarships that provide funding for anything more than tuition |
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What You'll Learn
International students on an F-1 or J-1 visa
Popular tax preparation software like TurboTax and TaxAct do not support nonresident tax returns. Instead, international students can use software like Sprintax, which is specifically designed for non-resident tax filings. Additionally, Ohio State University offers a secure online international tax compliance software called GLACIER to help prepare non-resident tax returns.
After being present in the US for five calendar years, F-1 and J-1 students are typically considered residents for tax purposes. At this point, they can complete the regular tax Form 1040. To determine their tax status, international students should refer to IRS publications and seek appropriate advice.
It is important to note that even if an international student did not work or earn income in the US, they are legally required to file Form 8843 with the Internal Revenue Service (IRS) if they were in the country during the past year. This form can be completed online or printed and mailed to the indicated address.
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Non-residents for tax purposes
For U.S. federal tax purposes, individuals are classified as either residents or non-residents. Non-residents for tax purposes are non-immigrants who do not meet the standards of the
A non-resident alien is an individual who is not a U.S. citizen or national and has not passed the green card test or the substantial presence test. Non-resident aliens who are engaged in a trade or business in the U.S. must pay U.S. tax on their effectively connected income, after allowable deductions, at the same rates as U.S. citizens and residents. If a non-resident alien is not engaged in a trade or business, their U.S.-source income is taxed at a flat rate of 30% (or a lower treaty rate) and no deductions are allowed.
F-1 and J-1 visa holders are considered non-resident aliens during their first five calendar years in the U.S. International students on these visas should file U.S. federal tax form 1040-NR for non-residents until they pass the substantial presence test and are considered U.S. residents for tax purposes. Once they are classified as U.S. residents for tax purposes, they can complete the regular tax form 1040.
Non-resident tax returns can be complicated, especially if there are scholarships, stipends, or international tax treaties involved. Non-resident taxpayers cannot file joint returns and most cannot claim exemptions for dependents, but they can claim a standard exemption for themselves.
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Software for filing taxes
There are several software options available for filing taxes in the US. The Internal Revenue Service (IRS) offers IRS Free File, a free online service that allows qualified taxpayers to prepare and file federal income tax returns using guided tax preparation software. Those who do not qualify can still use the Free File Fillable Forms. The IRS also provides information on other free file options on its website.
There are also a number of paid software options available, including:
- TurboTax: This software has been a popular choice for many years due to its user-friendly interface and comprehensive support. It offers clear explanations of complex tax topics and provides assistance with IRS Form 1040. TurboTax also has a dedicated mobile app and the best support for reporting cryptocurrency transactions.
- TaxAct: TaxAct offers both a free and paid version of its software. The free edition is available for eligible taxpayers filing using IRS Form 1040 without attaching any additional forms or schedules. The paid version, Unlimited Access, provides one-on-one support from tax experts and guarantees the accuracy of its software.
- 1040.com: This software is advertised as having an honest price of $29.99, regardless of the forms or needs of the user. It offers a simple and straightforward filing process, ensuring that users do not miss any necessary information.
- Jackson Hewitt: This company offers both an online DIY tax preparation service and support from professionals in its physical offices. The online service is priced at $25 for both federal and state returns, making it a reasonably priced option.
- Sprintax: This software is specifically designed for US nonresidents, including international students and scholars. It helps users file their IRS-compliant, US nonresident tax returns and offers tailored program views and easy report extraction.
These software options provide users with guidance and support in preparing and filing their taxes, ensuring accuracy and compliance with IRS regulations.
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Tax treaty exemptions
International students on an F-1 or J-1 visa are considered non-residents for tax purposes and should file US federal tax form 1040-NR until they pass the substantial presence test and are considered US residents for tax purposes. Non-resident tax returns can be moderately complicated, especially when international tax treaties are involved.
The Internal Revenue Service (IRS) of the United States classifies all people in the US as either "Residents for Taxes" or "Nonresidents for Taxes". "Residents for Taxes" are taxed on their worldwide income, while "Nonresidents for Taxes" are taxed only on their US-sourced income.
If an international student is a resident of a country with which the US has entered into a tax treaty that includes an exemption for scholarship and fellowship grants, they may claim a tax treaty withholding exemption. For example, Article 20 of the US-China Income Tax Treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. In such cases, the student can submit Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting, to the payer of the grant. If the student receives wages and a scholarship or fellowship from the same institution, they can claim treaty exemptions on both kinds of income on Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual.
It is important to note that the treaty articles generally contain time limits beyond which a treaty exemption may not be claimed. Therefore, a foreign student who has become a US resident should consult the applicable tax treaty article to ensure that the time limit for the treaty benefit has not expired.
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State taxes
International students on F and J visas are typically considered nonresidents for tax purposes. However, their tax residency status can vary depending on their income sources and level, as well as their state of residence.
In addition to filing a federal tax return, international students may also need to file a state tax return, depending on the state they reside in and the income they have earned. For example, students in Connecticut may need to file a CT State Income Tax Return, while students in other states may have different requirements. It is important to check the specific rules for the state in which taxes are being filed.
Most F-1 visa students are considered nonresident aliens and are required to file a US tax return (Form 1040-NR) for income from US sources. This includes income from scholarships, fellowship grants, and wages. If an international student has a taxable scholarship or fellowship grant, they will need to file a tax return. Additionally, any income that is partially or totally exempt from tax under a tax treaty must also be reported, even if no tax is due.
To file a state tax return, international students will need to provide their name, current address, and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), along with other general personal information. They will also need to submit a W-2 form, which reports their wages and taxes withheld for the year.
It is important for international students to comply with tax requirements and deadlines to avoid fines and penalties, as well as to maintain their legal status in the US. For specific questions, students can contact the IRS directly for guidance and advice on their tax obligations.
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Frequently asked questions
Yes, international students who resided in the U.S. during the previous year are required to file federal tax forms.
International students on an F-1 or J-1 visa should file U.S. federal tax form 1040-NR for non-residents, until they pass the substantial presence test and are considered U.S. residents for tax purposes.
The Internal Revenue Service (IRS) of the United States classifies all people in the U.S. as either Residents for Taxes or Nonresidents for Taxes. Residents for Taxes are taxed on their worldwide income, while Nonresidents for Taxes are taxed only on their U.S.-sourced income. F-1 students who have been in the U.S. for 5 years or less are nonresidents for taxes because the IRS code exempts students from the Substantial Presence Test for the first 5 years.
