Universities' Tax Handling For International Graduate Students

International students in the US are required to file a tax return, and universities have different ways of handling this. While universities cannot provide tax advice, they often provide resources and workshops to help international students understand their tax obligations and navigate the process. This includes providing access to tax preparation software and online tutorials, as well as connecting students with tax professionals. International students on F-1 visas are considered non-resident aliens for tax purposes and are required to pay federal and state income taxes, but not employment taxes. They must fill out Form 8843 and may also need to complete Form 1040-NR, W-4, 1099, or 1042-S, depending on their income sources.

How US universities handle taxes for international graduate students

International graduate students' tax obligations

International graduate students in the US are required to file a tax return. This applies to all international students and their spouses and dependents, regardless of income. The Internal Revenue Service (IRS) has a strict deadline of April 15 (or the following Monday if it falls on a weekend) to file tax returns covering the previous calendar year of January 1 to December 31.

International students on F-1 visas are considered nonresident aliens for tax purposes and are taxed only on US-sourced income. They are not required to pay employment taxes (e.g. Social Security and Medicare, also known as FICA) but are required to pay both federal and state income taxes. These taxes are withheld from their pay, and they must file a tax return as part of the process.

Students with F-1 visas may apply for OPT (a program that allows international students to work in the US after graduation and gain practical experience) after each level of education. If they earn an income from OPT, they will be required to pay tax and fill in a W-4 tax form with their new employer when they start work.

International students on J-1 visas are required to pay income taxes on the income they earn, just like US citizens. Doctoral fellowship recipients with F-1 or J-1 status are eligible to apply for a Social Security Number.

There is no specific international student tax; the amount of tax an individual will have to pay depends on their personal circumstances. Tax rates and deductions differ for each state in the US, so the amount paid depends on where the student lives. Some countries have a tax treaty with the US, and international students from those countries may be exempt or pay a reduced rate.

University tax workshops

Workshop Content

• The impact of tax treaties between the US and students' home countries, which may offer partial or complete tax exemptions.
• How to correctly fill out and submit tax forms, such as the US Nonresident Alien Income Tax Return (1040NR) and Federal Form 8843.
• Details on taxable income, including scholarship and fellowship grants, employment earnings, and income from OPT (Optional Practical Training) programs.
• Information on tax benefits for education, as outlined in IRS Publication 970.

Benefits of Attending

• Expert Guidance: Workshops are often led by IRS-certified volunteers or tax specialists who can provide accurate information and answer students' specific questions.
• Compliance and Avoidance of Penalties: Understanding tax obligations helps students maintain compliance with US tax laws and avoid potential penalties or issues with future visa applications.
• Free Service: Many universities offer these workshops free of charge, providing international students with valuable assistance without any financial burden.
• Practical Support: In addition to educational workshops, some universities offer facilitated self-assistance programs, allowing students to file their tax returns electronically with guidance from volunteers.

Tax forms for international graduate students

International graduate students in the US need to be aware of their tax obligations and understand the various tax forms they need to complete. While universities may provide general tax information and workshops, they cannot offer individual tax advice. Therefore, international graduate students should seek professional tax counselling or refer to Internal Revenue Service (IRS) and State Franchise Tax Board publications.

International students on F-1 visas are typically considered nonresident aliens for tax purposes, which means they are taxed only on US-sourced income. However, they may still need to file a US tax return (Form 1040-NR) and a state tax return, depending on the state. Additionally, they must report any income that is exempt from tax due to a tax treaty on a US income tax return.

International graduate students with taxable scholarships or fellowship grants will need to file taxes. A portion of the fellowship may be excludable from gross income if the student is a degree candidate at an eligible institution and uses the fellowship for qualified education expenses. In such cases, IRS Publication 970 provides detailed information.

To prepare their tax forms, international graduate students can use online software such as TurboTax or TaxAct. They can also seek free assistance from the UCSB VITA (Volunteer Income Tax Assistance) site. To ensure compliance and avoid potential penalties, it is crucial for international graduate students to understand their tax obligations and correctly complete the necessary tax forms.

Tax treaties and exemptions

International students in the US are considered nonresident aliens for tax purposes and are required to file tax returns. The US has tax treaties with several countries, and students from these countries may be partially or completely exempt from paying taxes.

International students can claim exemption from all or part of their taxes based on a tax treaty. To do so, they must complete IRS Form W-8BEN and forward it to the University Payroll Office. Students who are appointed as student officers and receive semi-monthly payroll must complete IRS Form 8233 and forward it to the University Payroll Office. Students can also apply for tax treaty exemption at Columbia University's Human Resources Processing Center.

International students with an F, J, or M visa who have been in the US for less than five calendar years are considered non-resident aliens for tax purposes. They are only taxed on US-sourced income. Students with an F-1 visa are not required to pay employment taxes such as Social Security and Medicare but are required to pay federal and state income taxes. These taxes are withheld from their pay, and they must file a tax return as part of the process. F-1 visa holders are also required to fill in a W-4 tax form with their new employer when they start work.

Students with an M-1 visa are not required to pay taxes because they are in the US only to learn and do not earn any income. J-1 visa holders pay taxes like US citizens. Students with an F-1 visa who earn an income from OPT (a program that allows international students to work in the US after graduation) will be required to pay tax.

Tax software and preparation

International students in the US are required to file a tax return if they were in the country during the previous calendar year and earned an income. This applies to students on F-1 visas, who are considered nonresident aliens for tax purposes. These students are taxed only on US-sourced income and are required to pay federal and state income taxes.

There are various software and preparation tools available to help international students with their taxes. For example, the University of California offers Glacier Tax Prep (GTP) to all eligible international students. GTP is used for tax preparation and can be accessed through the GLACIER tax compliance system. The Graduate Division at the University of California also hosts workshops throughout the year, providing general tax information for both domestic and international students.

Columbia University's Human Resources Processing Center assists international students with tax treaty exemption inquiries and payroll processes. The university's website also provides valuable tax information.

Additionally, the easiest way for international graduate students to file tax returns is often to use tax-filing software or the Volunteer Income Tax Assistance (VITA) program. Before using software or seeking assistance, students should gather necessary documents, such as 1042-S and W2 forms, and check the accuracy of their information. It is also important to keep all relevant records, such as passports, I-20s, and I-94s.

Students should also be aware of the deadlines for filing tax returns. The Internal Revenue Service (IRS) has a strict deadline of April 15, or the following Monday if it falls on a weekend. Meeting this deadline is crucial, as failing to do so can result in problems with or revocation of visas and potential ineligibility for a Green Card.

Frequently asked questions