Ibrahim Gardner
International students in the US are required to file tax returns, even if they have no income. Students on F-1 visas are considered nonresident aliens for tax purposes and are taxed only on US-source income. International students without a job need to file Form 8843, which is informational and lets the IRS know how long they have been in the US. Students with F-1 visas may also need to file a state tax return and pay state income tax. It is important to handle international student tax affairs correctly, as it can impact future Green Card and visa applications.
| Characteristics | Values |
|---|---|
| Who needs to file taxes? | All international students and their spouses and dependents, regardless of income, must complete Form 8843. |
| Tax status | International students with an F, J, or M visa who have been in the USA for less than five calendar years are considered non-resident aliens for tax purposes. |
| Tax liability | International students are taxed only on US-source income. They must pay federal and state income taxes, but not employment taxes (Social Security and Medicare, also known as FICA). |
| Income types | Income from wages, taxable scholarships or fellowships, stock options, lottery or gambling winnings, and other types of non-wage income. |
| Exempt income | Income from foreign sources, interest income from a U.S. savings and loan institution, U.S. credit union, U.S. insurance company, or certain investments that generate portfolio interest. |
| Deadlines | The deadline to file taxes is April 15 (or the following Monday if it falls on a weekend). |
| Resources | The Internal Revenue Service (IRS) provides resources and has a Volunteer Income Tax Assistance program. Schools may also offer help through their international student centers or Sprintax software. |
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What You'll Learn
Non-resident alien status
International students in the US on F-1 visas are considered non-resident aliens for tax purposes and are therefore taxed only on US-source income. This means that they are exempt from paying Social Security and Medicare Taxes. However, they are required to pay federal and state income taxes.
To determine your tax residency status, you can refer to the IRS "Introduction to Residency Under U.S. Tax Law" or IRS Publication 519. Additionally, online tools like GLACIER Tax Prep and Sprintax can assist in determining your residency status and completing the correct tax forms.
International students without income from US sources may not need to file taxes. However, they are still required to complete Form 8843, which provides the IRS with information about their time spent in the USA.
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Tax treaties
International students can benefit from tax treaties between their home country and the US. The US has income tax treaties with 65 countries. Under these treaties, residents of foreign countries may be eligible for reduced tax rates or complete exemption from US taxes. These treaties can often reduce or eliminate US tax on various types of personal services and other income, such as pensions, interest, dividends, royalties, and capital gains.
Students and scholars who meet the IRS's substantial presence test are considered US residents for tax purposes. Most 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. However, some can be considered 'residents' or 'resident aliens' for tax purposes. This does not mean that the student is a resident for immigration or other purposes, but rather, it determines how they are taxed and which forms they need to fill out.
If a student's country of residence has signed a tax treaty with the US, they may be partially or completely exempt from tax. For instance, there is a special rule for certain nonresident alien students from India, who can claim the standard deduction under Article 21 of the US-India Income Tax Treaty.
International students who are nonresident aliens for tax purposes are exempt from paying FICA (Social Security and Medicare) taxes if they are employed by the school, college, or university where they are enrolled at least half-time. However, they are liable for Social Security and Medicare taxes on wages paid to them for services performed within the US. If a student's country has a tax treaty with the US, they may be exempt from these taxes.
To claim a tax treaty benefit, students must fulfil certain criteria:
- Be a nonresident for tax purposes.
- Have a Social Security Number or apply for an Individual Taxpayer Identification Number (ITIN).
- Determine their residence status and whether they had any US-source income.
- Complete the necessary tax forms, such as Form W-4 and Form 8233, and submit them to the IRS for review and approval.
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State taxes
As an international student in the US, you may need to pay state taxes in addition to federal income tax. State taxes are collected by most US states, and the rates and deductions will differ for each state. Therefore, the amount of state tax you will pay depends on the state in which you live and/or work. Nine states do not have any tax-filing requirements.
International students on F-1 visas are generally considered nonresident aliens for tax purposes for the first five calendar years of their stay in the US. As a nonresident alien, you will need to file Form 1040-NR federal tax return to assess 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 with the IRS by the deadline. 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 need to file Form 8843 and most likely Form 1040NR to complete your tax return. US-source income includes wages from a job in the US, scholarship money from an American organisation, or interest on money in an American bank account.
If you are a non-resident for tax purposes, you will be able to use Sprintax to prepare your federal tax return for free. You can also prepare your state tax return with Sprintax for a fee.
It is important to understand that filing tax returns is mandatory for international students, and not doing so by the deadline could result in problems with or a revocation of your visa, as well as possible ineligibility for a green card.
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Deadlines
The Internal Revenue Service (IRS) has a strict deadline of April 15 (or the following Monday if it falls on a weekend) for filing tax returns covering the previous calendar year of January 1 to December 31. This deadline is crucial, as missing it may result in fines and penalties, and could jeopardize future US visa or Green Card applications.
International students with an F1 visa are required to pay federal and state income taxes, but not employment taxes. They must file Form 8843, which is an informational statement that lets the IRS know how long they have been in the US. The deadline for this form is June 15 of the year following the close of the tax year. Additionally, if they have received US-sourced income, they will likely need to file Form 1040NR, with a deadline of April 15.
Students with other visa types, such as J1 or M1, may have different tax obligations. J1 visa holders, for example, pay taxes on earned income, just like US citizens. M1 visa holders, on the other hand, typically do not pay taxes since they are in the US solely for learning and do not earn any income.
It is important to note that state tax deadlines differ from federal deadlines, and not all states require a tax return at the state level. It is recommended to check the specific requirements and deadlines for the state in which you are studying.
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Tax forms
International students in the US are required to file a tax return. The type of tax return form that needs to be filed depends on the student's income and visa status.
Form 8843
All international students, regardless of income, must complete Form 8843. This form is informational and lets the IRS know how long a student has been in the USA. It is an informational statement required by the IRS for nonresidents for tax purposes. It should be submitted for every nonresident taxpayer present in the US at any point during the previous calendar year, including spouses, partners, and children. The form must be filed by April 15 (or the following Monday if that falls on a weekend).
Form 1040-NR
International students with US-source income must file Form 1040-NR (federal tax return) to assess their federal income and taxes. This form is for nonresident aliens, which most F-1 visa holders are considered.
Form 1040NR or 1040NR-EZ
International students with income may have to complete Form 1040NR or 1040NR-EZ (the easy version of 1040NR).
W-4 Tax Form
International students must fill in a W-4 tax form with their employer when they start work.
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Frequently asked questions
Yes, international students who were in the US for any length of time during the previous calendar year and did not earn an income must file a Non-Employed 8843 Form.
Form 8843 is an informational form that lets the IRS know how long you've been in the USA. All international students and their spouses and dependents, regardless of income, must complete this form.
The deadline to file taxes in the US is April 15 (or the following Monday if it falls on a weekend).
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