Ibrahim Gardner
International students who work while studying abroad often have to navigate complex tax systems and may be required to file tax returns. The requirements and benefits vary depending on the country and the student's residency status. For example, in Australia, international students are generally required to submit tax returns and are often eligible for tax refunds. On the other hand, in the United States, international students may not be able to claim educational tax credits and may need to use nonresident tax forms, but they can still seek refunds for overpaid taxes. Understanding tax obligations and entitlements is crucial for international students to ensure compliance and maximize their financial benefits.
International Students and Tax Refunds
| Characteristics | Values |
|---|---|
| Country | Australia, United States |
| Criteria for tax residency | Enrolled in a course lasting 6 months or more, continuously resided in the country for 183 days (6 months) |
| Tax refund eligibility | Majority of international students in Australia are eligible for a tax refund at the end of the year. In the US, international students are generally not eligible for educational tax credits but may be eligible for a FICA tax refund. |
| Average tax refund amount | Australia: $2,600; US: $927 |
| Required documents | Payslips, invoices/receipts, bank statements, lease agreement, utility bills, passport, TFN (Tax File Number) |
| Deadline | Australia: October 31st for self-lodging; extended deadline if a tax agent is appointed prior to the cut-off date |
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What You'll Learn
International students in Australia and tax refunds
International students in Australia who work and earn an income are required to pay taxes. The Australian financial year runs from 1 July to 30 June, and anyone who works in Australia must file a tax return at the end of the financial year, regardless of their income. The deadline to lodge your tax return is 31 October.
International students in Australia are generally entitled to claim a tax refund at the end of the year. The average tax refund is $2,600. However, this depends on whether the student is deemed a resident or non-resident for tax purposes. If an international student has been living in Australia for more than six months, they are considered a resident for tax purposes and must submit a tax return. Students who are residents for tax purposes and earn less than $18,200 during the tax year may be entitled to a refund of any tax withheld by their employer throughout the tax year.
Non-residents are taxed at a higher rate than residents. If you are a non-resident, you will not be charged the Medicare levy and will not need to apply for a Medicare Entitlement Statement. Additionally, non-residents can claim a refund of their superannuation when they leave Australia. Superannuation is a system for employees in Australia to gather enough funds to replace their income in retirement. Employers are legally obliged to pay 9.5% of an employee's basic earnings into a superannuation fund if the employee earns more than $450 a month in Australia. The average superannuation refund is $1,908.
It is important to note that international students in Australia who do not lodge a tax return may incur fines and penalties from the Australian Taxation Office (ATO) and will miss out on a potential tax refund. To lodge a tax return, international students will need their payslips, invoices (if they are self-employed), and a TFN (Tax File Number).
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International students in the US and tax refunds
International students in the US on an F-1 visa are considered nonresident aliens for US federal income tax purposes. This means that they are taxed only on US-source income. International students on F-1 visas must pay tax on the following types of income:
- Wages from a job in the United States
- Scholarship money from an American organisation
- Interest on money in an American bank account
- Taxable scholarship or fellowship grant
- Income partially or totally exempt from tax under the terms of a tax treaty
- Any other income that is taxable under the Internal Revenue Code
International students on F-1 visas are exempt from social security and Medicare taxes. They are also exempt from the Substantial Presence Test for the first five years they are in the US.
To file their taxes, international students on F-1 visas must file Form 1040-NR (federal tax return) to assess their federal income and taxes. They may also need to file Form 8843 with the IRS by the deadline of April 15, 2025. Depending on the state, they may also be required to file a state tax return. To file taxes, international students will need an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN).
International students in the US can also benefit from a tax treaty with their home country. The US has income tax treaties with 65 countries, and under these treaties, residents of foreign countries may be eligible for reduced tax rates or exemptions from certain taxes. In certain cases, F-1 students could be able to claim a tax treaty that can reduce or fully exempt their income from taxes, and the overpaid amount will be refunded.
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How to file taxes as an international student
The process of filing taxes as an international student depends on the country in which you are studying. Here is a guide on how to file taxes as an international student in Australia and the United States.
Australia
International students in Australia are required to lodge a tax return at the end of the financial year, regardless of their income. This is because, in addition to reclaiming overpaid tax, filing a tax return can help international students avoid fines and penalties from the Australian Taxation Office (ATO).
To determine your tax residency status, you must consider how long you have resided in Australia. If you have been in the country for less than six months and intend to leave after completing your course, you will likely be considered a non-resident for tax purposes. Non-residents are taxed at a higher rate and are not charged the Medicare levy.
If you are considered a resident for tax purposes, you are not required to lodge a tax return if your income is below the tax-free threshold. However, you should provide a non-lodgement advice to the ATO to avoid being marked as having an outstanding return.
To lodge your tax return, you will need to gather documents such as bank statements, lease agreements, and income information. This includes your total income and the tax you paid, which your employer should provide. If you are self-employed, you will need invoices and receipts to account for your self-assessed income. Additionally, everyone filing an income tax return in Australia needs a Tax File Number (TFN).
United States
According to the Internal Revenue Service (IRS), all international students and scholars in the United States have a federal tax filing requirement, even if they do not have US-source income. Most international students on F and J visas are considered nonresidents for tax purposes.
If you are a nonimmigrant student with an F-1 visa, you are exempt from social security and Medicare taxes. However, you are still required to file Form 8843 with the IRS by the specified deadline, even if you did not earn any income during your stay. Depending on your income, you may also need to file Form 1040-NR (federal tax return) and a state tax return.
If you receive a taxable scholarship, your school will provide you with a 1042-S form. You may also receive a 1099 form if you earned rental or investment income or worked as an independent contractor. Additionally, some international students may need an ITIN, depending on their circumstances.
To accurately determine your tax filing status and requirements, it is recommended to review the IRS website or consult a qualified tax accountant.
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Deadlines for international students' tax returns
International students in Australia and the United States are required to file tax returns. The deadlines for these tax returns vary depending on the country and individual circumstances.
Australia
In Australia, international students who have worked and earned an income are required to lodge a tax return at the end of the financial year. The Australian financial year runs from 1 July to 30 June, and tax returns can be filed from 1 July onwards. While there is no specific deadline mentioned, it is recommended to file before the end of the year to claim any potential tax refunds.
International students in Australia need to determine their residency status for tax purposes. If an international student has enrolled in a course lasting less than six months and intends to leave Australia after completion, they will typically be considered a non-resident. Non-residents are taxed at a higher rate and are not entitled to the tax-free threshold.
United States
In the United States, international students on F-1 visas are considered nonresident aliens by the Internal Revenue Service (IRS) and are subject to different tax rules. These students are required to file Form 1040-NR (federal tax return) to assess their federal income and taxes. Additionally, they must file Form 8843 with the IRS by the specified deadline, even if they had no income during their stay.
The deadline for filing Form 8843 is 15 June 2025, while the deadline for the federal income tax return (Form 1040-NR) is 15 April 2025. It is important to note that state tax deadlines differ, and not all states require international students to file state tax returns. However, many states do have this requirement, so it is essential to check the specific state's website for more information.
International students in the US may also be eligible for tax refunds if they have overpaid their taxes. While the process of filing tax returns and claiming refunds can be complex, there are resources available, such as Sprintax, to provide expert tax advice and assistance.
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Tax residency requirements for international students
International students are required to pay taxes on the income they earn while studying in a foreign country. The tax residency requirements for international students vary depending on the country in which they are studying. Here is an overview of the tax residency requirements for international students in Australia and the United States.
Australia
In Australia, the main requirement for being considered a resident for tax purposes is continuously residing in the country for a period of 183 days (6 months). If an international student's course duration is less than 6 months and they intend to leave Australia after completion, they will be considered a non-resident for tax purposes. Non-residents are taxed at a higher rate and are not entitled to the tax-free threshold or the Medicare levy.
United States
In the United States, tax residency requirements differ based on visa status. Generally, F-1 and J-1 students are considered nonresidents for tax purposes for their first five calendar years in the country. After the fifth year, they are considered residents for tax purposes. For J-1 scholars, the duration is shorter, and they become residents for tax purposes after two calendar years.
To confirm tax residency status, international students in the US can use the Sprintax process or refer to the IRS Publication 519, "U.S. Tax Guide for Aliens." Additionally, the IRS's substantial presence test helps determine tax residency, and individuals may be considered dual-status residents.
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Frequently asked questions
International students in Australia are entitled to lodge a tax return and may be eligible for a tax refund.
The average tax refund amount for international students in Australia is $2,600.
You will need documents such as your passport, bank statements, lease agreements, and payslips to file your taxes.
International students in the US may be eligible for a tax refund. However, they cannot use Form 1098-T to claim a tax refund on tuition.
You will need documents such as your passport, bank statements, and Form 1040NR to file your taxes.
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