Filing Tuition Tax Returns: A Guide 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 includes both federal and state tax returns for those who earned an income, and a non-employed federal form for those who did not. Most international students on an F-1 visa are considered non-resident aliens in the US and are required to file a US tax return (form 1040-NR) for income from US sources. Non-resident aliens are not entitled to claim educational tax credits, and generally do not need to use Form 1098-T when filing their taxes. However, some foreign students are eligible for a direct write-off of the portion of their scholarship or grant that was used to cover qualified educational expenses.

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International students must file a US tax return

International students in the US are required to file a tax return with the Internal Revenue Service (IRS) each year they are in the United States. This includes federal and state tax returns for those who earned income, and a non-employed federal form for those who did not. The deadline for filing tax returns is April 15, or the first succeeding day that is not a weekend or holiday. For example, the deadline for filing 2024 tax returns is April 15, 2025.

International students on F1 visas are considered nonresident aliens for their first five calendar years in the US, and are required to file a US tax return (Form 1040-NR) for income from US sources. This includes income from wages, tips, scholarships, and fellowship grants. Nonresident aliens who did not earn any income must file Form 8843 with the IRS, which is a statement required by the US government for certain nonresident aliens. The deadline for filing Form 8843 is June 15, 2025.

It is important to note that international students may not be eligible for certain educational tax credits. For example, Form 1098-T (Tuition Statement) is primarily intended for US citizens and residents who qualify for education tax credits such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). Including Form 1098-T on a tax return as a nonresident may result in non-compliance with the IRS.

To navigate the complexities of US tax filing, international students can use resources such as Sprintax, which is specifically designed to help international students and nonresidents understand their tax obligations and maximize their refunds.

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Non-resident tax status

International students in the US are required to file a return with the Internal Revenue Service (IRS) each year they are in the country. This includes federal and state tax returns for those who earned income, and a non-employed federal form for those who did not.

Most international students on an F-1 visa are considered nonresident aliens in the US and are required to file a US tax return (Form 1040-NR) for income from US sources. This includes any taxable scholarship or fellowship grant, income exempt from tax under a tax treaty, and/or any other income that is taxable under the Internal Revenue Code. Nonresident alien students do not need to use Form 1098-T (Tuition Statement) when filing their taxes, as this form is primarily intended for US citizens and residents who qualify for education tax credits.

Nonresident aliens are generally subject to US income tax only on US-source income, which may include wages, tips, scholarship and fellowship grants, dividends, etc. They are not entitled to claim educational tax credits. To be considered a resident for tax purposes, an individual would generally need to have been in the US for more than 183 days of the tax year in H-1B, O-1, or TN status. F-1 and J-1 students are typically nonresidents for tax purposes for five calendar years. After the fifth calendar year in the United States, they become residents for tax purposes.

International students can use Sprintax to prepare their federal tax return and complete Form 1040-NR or 1040NREZ and Form 8843. This software is provided by some universities, such as the University of Southern Indiana, to help international students file their taxes.

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Tax forms for international students

The US tax system is complex, and international students are required to file a return with the Internal Revenue Service (IRS) each year they are in the United States. The tax forms and requirements for international students depend on their residency status, income sources, and visa type.

Non-Resident Tax Forms

International students on an F-1 visa are typically considered nonresident aliens for tax purposes. Nonresident aliens must file Form 1040-NR (US Nonresident Alien Income Tax Return) to report and pay federal income taxes on income earned in the US. This includes wages, scholarships, and fellowship grants. Even if a nonresident alien student did not earn any income, they are still required to file Form 8843 with the IRS. This form is an informational statement and should be submitted annually by nonresident taxpayers who were present in the US during the previous calendar year.

Resident Tax Forms

International students who qualify as residents for tax purposes may need to file Form 1040 or 1040-SR (Individual Income Tax Return) to report their worldwide income. Residents may also be eligible for certain deductions and credits, such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC).

Tax Exemptions and Treaties

Some international students may be exempt from paying taxes on certain types of income, such as FICA taxes on wages or Social Security and Medicare taxes. Additionally, students may be able to claim benefits under a tax treaty, which can partially or fully exempt their US-sourced income from federal and state income taxes.

It is important to note that the information provided here is general and may not cover all specific situations. International students should consult the IRS website, seek guidance from a qualified tax professional, or use specialised software like Sprintax to ensure they comply with their tax obligations and accurately complete the necessary tax forms.

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Taxable scholarships and grants

The US tax system can be complex for international students, and it is important to understand your filing and taxation obligations. All international students are required to file a tax return with the Internal Revenue Service (IRS) each year they are in the United States. This includes federal and state tax returns for those who earned income, and a non-employed federal form for those who did not.

If you received scholarships, fellowships, or grants as an international student, you may need to pay taxes on them. The taxability of these funds depends on several factors, including the type of visa you hold, the nature of the scholarship, fellowship, or grant, and how the funds are used.

Qualified Expenses

Qualified expenses generally refer to costs associated with tuition, fees, books, supplies, and equipment required for your courses. These expenses are typically tax-free. However, it is important to note that qualified expenses do not include optional expenses that are not relevant to your particular course or institution.

Non-Qualified Expenses

Non-qualified expenses include amounts used for room and board, travel, research, or other expenses beyond the scope of qualified expenses. These are typically considered taxable income and must be reported on your tax return. For example, if you received a $15,000 scholarship and used $6,000 for room and board, that $6,000 would be considered taxable income and should be reported.

Tax Treaties

It is important to consider any applicable tax treaties between the US and your home country. These treaties may provide exemptions or lower tax rates for international students. For instance, under the Spain-US tax treaty, J-1 visa holders who meet certain conditions are exempt from tax on scholarship/grant income and may also benefit from reduced taxes on personal service income.

Withholding Tax Rates

The withholding tax rate for nonresident alien students is typically 30%. However, if you are a nonresident alien student with an "F," "J," "M," or "Q" visa, and the scholarship or grant meets certain conditions, the withholding tax rate may be reduced to 14% or a lower treaty rate.

Forms and Documentation

To properly report your taxable scholarships and grants, you will need to collect and organize relevant forms and documents. This includes Form 1042-S (Foreign Person's US Source Income Subject to Withholding) and any Form W-2 received for part of the scholarship. You may also need to complete Form 1040 or 1040-NR to report the taxable portion of your scholarship or grant income. Additionally, nonresident alien students may need to file Form 1040NR (US Nonresident Alien Income Tax Return) to assess and file federal income taxes.

In summary, international students may have to pay taxes on scholarships, fellowships, or grants they receive in the US. It is crucial to accurately report these taxable amounts on your tax returns to avoid penalties, maintain compliance, and ensure you do not lose access to future financial aid.

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Tax treaties

International students and scholars who are non-residents for tax purposes and intend to take advantage of a tax treaty benefit should provide IRS Form 8233 and a tax treaty statement to their U.S. income provider in order to reduce or avoid tax withholding on income. For students and scholars at UC Berkeley, this is often completed through the GLACIER process. If not, GLACIER Tax Prep will help determine if you were eligible for a tax treaty and provide the necessary documentation.

Generally, the payee must be a nonresident alien student, apprentice, or trainee to claim a tax treaty exemption for remittances from abroad (including scholarship and fellowship grants) for study and maintenance in the United States. However, if the payee entered the United States as a nonresident alien, but is now a resident alien for U.S. tax purposes, the treaty exemption will continue to apply if the tax treaty has an exception to the treaty's saving clause. If the payee qualifies under an exception to the treaty's saving clause and the payor intends to withhold U.S. income tax on the scholarship, fellowship, or other remittance, the payee can avoid income tax withholding by giving the payor a Form W-9, Request for Taxpayer Identification Number and Certification.

Students, trainees, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of Publication 519, U.S. Tax Guide for Aliens, to the Form 8233 and give it to the withholding agent. For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties.

If the payee is not a student, trainee, teacher, or researcher, but performs services as an employee and the pay is exempt from U.S. income tax under a tax treaty, the payee may be able to eliminate or reduce the amount of tax withheld from the payee's wages. Provide the payor with a properly completed Form 8233 for the tax year. The Form 8233 must report the payee's Taxpayer Identification Number (TIN), generally the payee's U.S. Social Security number or Individual Taxpayer Identification Number (ITIN). If the payee claims treaty benefits that override or modify any provision of the Internal Revenue Code, and by claiming these benefits the payee's tax is, or might be, reduced, the payee must attach a fully completed Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), to the payee's tax return.

The payee must also file Form 8833 if the payee receives payments or income items totaling more than $100,000 and determines the country of residence under a treaty and not under the rules for determining alien tax status. The payee does not have to file Form 8833 for any of the following situations: The payee can claim a reduced rate of withholding tax under a treaty on interest, dividends, rent, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate. The payee can claim a treaty exemption that reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers.

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