Lana Oconnell
International students in the US may need to file several tax documents, depending on their circumstances. One such document is Form 1098-T, which is a tuition statement used by US citizens to claim education tax credits. Nonresident aliens are not eligible for education tax credits and should not include Form 1098-T on their tax return forms, even if the form is issued. However, some universities, such as Penn State, issue Form 1098-T to all students, including international students, for informational purposes. This form reports payments received for qualified tuition and related expenses for the tax year. International students with an F-1 visa are generally considered nonresident aliens for tax purposes and are required to file a US tax return (Form 1040-NR) for income from US sources. They may also need to fill out other forms, such as Form 8843 or state tax returns, depending on their specific situation.
| Characteristics | Values |
|---|---|
| Form name | 1098-T |
| Who needs to fill it out? | Eligible educational institutions file this form for each student they enroll and for whom a reportable transaction is made. Insurers file this form for each individual to whom they made reimbursements or refunds of qualified tuition and related expenses. |
| Who needs to receive it? | Students who file income taxes in the United States can use the Form 1098-T as an informational tax document used to determine eligibility for income tax credits. |
| Who does not need to receive it? | According to IRS guidelines, a 1098-T statement will not be provided to non-resident aliens, international students, or where qualified tuition and related expenses were entirely waived. |
| How to access it? | If you opted for electronic delivery, you can view your form at Tab Services. If not, a paper copy was mailed to your current address. |
| What is reported on it? | Qualified Tuition and Related Expenses (QTRE) paid to the University, scholarships and grants, reimbursements or refunds of qualified tuition and related expenses made by an insurer during the calendar year |
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What You'll Learn
International students and tax returns
Tax Returns for International Students
International students in the US on an F-1 visa are typically considered nonresident aliens for tax purposes. This means that they are generally taxed in the same way as nonresident aliens and are required to file a US tax return (Form 1040-NR) to report any income from US sources. This includes income earned through the Optional Practical Training (OPT) program, which allows international students to work in the US after graduation.
It is important to note that even if an international student does not earn any income during their time in the US, they may still need to file Form 8843 with the Internal Revenue Service (IRS) by the specified deadline. This form is used to report an individual's presence in the US and establish their nonresident status.
Form 1098-T
The Form 1098-T is a tax document used by eligible educational institutions to report payments received for qualified tuition and related expenses for a given tax year. While this form is typically issued to all students, including international students, it does not necessarily indicate that the student is a resident for tax purposes or that they need to file income taxes. The 1098-T form can be used as an informational document to determine eligibility for income tax credits.
State Tax Returns
In addition to federal tax obligations, international students may also need to file state tax returns, depending on the state they are residing in. Nine states have no tax-filing requirements, while others may require the filing of a state income tax return in addition to the federal return.
Tax Treaties
It is worth noting that income that is not taxable due to an income tax treaty must still be reported on a US income tax return, even if no income tax is due. This can include income from scholarships or fellowship grants that are considered tax-free.
In conclusion, international students in the US are generally required to file tax returns and pay taxes on any income earned in the US. The specific requirements may vary depending on visa status, residency, and the state in which they are residing. It is important for international students to carefully review the tax guidelines and seek appropriate guidance to ensure compliance with their tax obligations.
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The 1098-T form and qualified tuition
The 1098-T form is a tax document used by eligible educational institutions to report payments received for qualified tuition and related expenses for the tax year ending on December 31 of the preceding calendar year. It includes financial information such as tuition charges, scholarships received, and payments made. While the 1098-T form is primarily used by domestic students to determine eligibility for income tax credits, international students may also receive this form depending on their tax status and whether they received scholarships in excess of their qualified tuition.
According to the Internal Revenue Service (IRS), eligible educational institutions must file a Form 1098-T for each student they enrol and for whom a reportable transaction is made. Insurers must also file this form for each individual to whom they made reimbursements or refunds of qualified tuition and related expenses. The form covers various sections, including payments received for qualified tuition and related expenses, scholarships or grants, and insurance contract reimbursements or refunds.
For international students, the applicability of the 1098-T form depends on their tax residency status. Most international students on F-1 or J-1 visas are considered non-residents for tax purposes during their first five years in the United States. During this period, they are generally not eligible to claim education-related tax credits or deductions, and a 1098-T statement will not be provided to them. However, in certain cases, international students may receive a Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) if they received scholarships exceeding their qualified tuition or if they are employees who received tax treaty benefits.
It is important to note that the tax guidelines for international students can be complex, and each student's situation may vary. While most F-1 students are considered nonresident aliens, they are still required to file a US tax return (Form 1040-NR) for any income earned from US sources. Additionally, international students must complete a W-4 tax form when starting employment. Seeking guidance from official IRS resources or consulting a professional tax advisor is recommended to determine the specific requirements and forms applicable to one's unique circumstances.
In summary, the 1098-T form is primarily used by domestic students to claim education tax credits and determine eligibility for income tax benefits. While some international students may receive the 1098-T form, most nonresident aliens are not eligible for the tax benefits associated with it. International students should refer to IRS guidelines, consult tax advisors, and carefully complete the necessary tax forms to ensure compliance with US tax regulations and avoid potential implications on future visa applications.
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The 1098-T form and tax credits
The 1098-T form is a tuition statement provided by eligible educational institutions to students who have paid "qualified educational expenses" in the preceding tax year. Qualified expenses include tuition and fees at eligible institutions, as well as related expenses like certain course materials if required for enrollment. The form is used to report the total payments received (in Box 1) for qualified tuition and related expenses within a tax year. The form may also show the amount of scholarships and grants that were paid directly to the school for the student's expenses (in Box 5), which may reduce the amount of qualified expenses.
The 1098-T form is important for tax purposes as it is used to claim education tax credits, such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). These credits can be worth thousands of dollars and can help offset the cost of higher education. The AOTC is available to students enrolled in one of the first four years of postsecondary education, carrying at least a half-time workload, and pursuing an undergraduate degree, certificate, or other recognised credential. The Lifetime Learning Credit is available to students taking one or more classes from a college or university to pursue an undergraduate or graduate degree, certificate, or other recognised credential, or to acquire or improve job skills.
To claim the AOTC or LLC, students can use IRS Form 8863, Education Credits. It is important to note that students who are claimed as dependents by another person are not eligible to claim these credits themselves. However, the person claiming them may be entitled to the credit on their tax return. Additionally, students are not required to claim the credit for a particular year and can qualify to take the credit for up to four tax years if they meet certain requirements.
The 1098-T form is typically mailed to the student's address of record maintained by the college or university. Students can also access, download, and print the form electronically. Eligible institutions are required to send the 1098-T form to students by January 31 and file a copy with the IRS by February 28.
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Obtaining a 1098-T form without an SSN/ITIN
The 1098-T form is a Tuition Statement provided by higher education institutions to all eligible students who were billed for Qualified Tuition and Related Fees. It is used to assist students in determining their eligibility for the American Opportunity Tax Credit or Lifetime Learning Credit. While the IRS does not require institutions to issue a 1098-T form to non-resident aliens, some institutions have historically provided these forms to non-resident students upon request.
If you are an international student without a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), you may still be able to obtain a 1098-T form. Here are the steps you can follow:
- Contact your college's Registrar's Office or the Office of Financial Aid to inquire about the specific process at your institution. Some colleges may have specific instructions or requirements for submitting requests and corrections.
- Provide your college with a valid SSN or ITIN as soon as possible. This is necessary for tax reporting purposes, and the IRS may impose fines or require the return of claimed credits if this information is missing or incorrect.
- Submit a Form W-9S, "Request for Student's or Borrower's Taxpayer Identification Number and Certification." This form can typically be submitted electronically or in person to the relevant office, such as the Registration Office or through a Document Upload feature.
- Update your mailing address with your college to ensure that any physical forms or correspondence related to your 1098-T are sent to the correct address.
- Request a copy of your 1098-T form from your college's Business Office or through your online student account, if applicable.
It is important to note that colleges may have different procedures for providing 1098-T forms to international students, and not all colleges may offer this form if you do not have a valid SSN or ITIN. Therefore, it is essential to contact your specific college for detailed instructions and to understand their policies regarding these forms for international students.
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The 1098-T form and non-resident aliens
The 1098-T form is a tax document used by eligible educational institutions to report payments received for qualified tuition and related expenses for the tax year ending on December 31 of the preceding calendar year. Qualified tuition and related expenses refer to tuition, fees, and course materials required for a student to enrol in or attend an eligible educational institution.
In the United States, eligible educational institutions are colleges, universities, vocational schools, or other postsecondary educational institutions that meet the criteria outlined in the Higher Education Act of 1965 and are eligible to participate in the Department of Education's student aid programs. This includes most accredited public, nonprofit, and private postsecondary institutions.
Non-resident aliens, for tax purposes, refer to individuals who have not met the substantial presence test, which determines an individual's tax residency status. International students in F or J status are typically exempt from this test for the first five years of their stay in the United States, and they are considered non-residents for tax purposes during this period.
Regarding the 1098-T form and non-resident aliens, there are a few key points to note:
- Eligible educational institutions are not required to file Form 1098-T for nonresident alien students unless the student specifically requests it.
- Nonresident alien students who do not request Form 1098-T from their educational institution can still obtain information about their qualified tuition and related expenses through their student account dashboard.
- If a nonresident alien student chooses to request Form 1098-T, the educational institution is required to report payments received for qualified tuition and related expenses for that student.
- It is the responsibility of each student, including non-resident aliens, to determine their tax status and eligibility for tax credits or deductions. This may involve consulting with a personal tax advisor or using tax software specifically for international students.
In summary, while non-resident alien students may not automatically receive Form 1098-T from their educational institution, they can request it if needed. The form provides information about qualified tuition and related expenses, which may be relevant for tax purposes, depending on the student's individual circumstances and tax status.
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Frequently asked questions
Form 1098-T is a tuition statement used by eligible educational institutions to report payments received for qualified tuition and related expenses for international students.
No, a 1098-t form will not be provided to non-resident aliens or international students where qualified tuition and related expenses were entirely waived.
If you are an international student, a 1098-T form will not be generated for you unless the Bursar Office receives your request and you have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) on file with the University.
If you do not have an SSN or ITIN number, you can still access your 1098-T online or receive a paper copy via mail to your current mailing address (U.S. only). The form will not have an SSN or ITIN number reported on it.
Students who file income taxes in the United States can use the 1098-T form as an informational tax document to determine eligibility for income tax credits. It is important to note that international students may have to file a state tax return and pay state income tax even when no federal return is due.
