Virtually ALL F or J international students and scholars and their dependents must file an income tax form every year in order to be in compliance with the Internal Revenue Service (IRS) regulations. This is true regardless of whether they earned income while in the United States. Income tax issues for foreign nationals are complex and confusing. The following is designed to give you a basic understanding of your responsibilities and tell you how to get more information. Do not construe the information presented here as individual tax advice!
Tax forms may vary depending on your individual residency status for tax purposes and employment status. The Internal Revenue Service (IRS), an agency of the U.S. government, determines tax residency based on the two classifications outlined below. Before you file your taxes, you must determine your tax residency status, which may be different from your immigration status.
- Residents for tax purposes (also called 'resident alien'): All U.S. citizens, legal permanent residents, and nonresident aliens for immigration purposes who have met the Substantial Presence Test.
- Non-residents for tax purposes (also called 'nonresident aliens'): all others, regardless of immigration status. F-1 and J-1 students are considered non-residents for 5 years, and after that will be residents for tax purposes in most cases. Non-residents still must file non-resident tax returns and pay tax on U.S. income!
Tax Software Resources for UCCS Students:
Remember: GEO advisors are NOT TAX EXPERTS. We CANNOT give you any tax advice or help you with any tax issue. The CU system for this year is providing UCCS students with CU income (student wages, scholarships, etc.) a free license to WinStar 'Foreign National Tax Resource' software. Check your email for direct emails from GEO and the CU Tax Office about your tax obligations. Note - other commonly available tax preparation software is typically NOT able to assist with the tax situation faced by international students and scholars (and dependents).
If you did not have CU income, contact our office to request a discounted code to Sprintax, another software for foreign nationals to prepare U.S. federal and state returns.
You may also wish to consult a commercial tax preparer. If you want to seek advice from professional tax preparer, look for a qualified CPA in your area, and be sure to ask questions about the services provided and the prior experience of the tax preparer, e.g., cost and specifics about what is included and the amount of previous experience, specifically with the preparation of non-resident tax forms. Many CPAs and tax-preparation firms are not experienced with non-resident taxes. Ask your GEO advisor if you need help in finding a tax preparer.
Caution: Please note that the USCIS (U.S. Citizenship and Immigration Services) and the IRS (Internal Revenue Service) use the terms "resident" and "nonresident" to mean different things. This is very confusing to visiting scholars and to sponsoring departments as well.
When you first begin employment in the United States, you will have to fill out a W-4 Form. This helps your employer estimate how much of your income should be "withheld" (or deducted) from your wages for the purpose of paying taxes. Your employer pays those amounts directly to the U.S. Treasury on your behalf. In your annual tax return, you must reconcile your account with the government to verify that you paid the right amount over the course of the year. If you paid too much, you can claim a refund, which will be paid promptly unless the government disagrees with your calculations.
Different Kinds of Taxes, Collected at Different Levels
There are several different types of taxes in the U.S. tax system (e.g., income tax, Social Security tax, sales tax, personal property tax) and three layers of taxation (local, state, and federal). You have obligations at several levels.
Social Security Tax: Students often have questions about payment of a U.S. tax called Social Security tax, or FICA. FICA is a taxation system that provides benefits to retired workers. Most F and J students are not subject to this tax, but H1 scholars and J-2 dependents with work permission are. You can get more information about this tax from your campus payroll office.
Sales tax: is similar to the value-added tax collected in many countries, except that in the United States the amount of the tax is not included in the advertised prices of goods. Sales-tax rates vary from state to state. Colorado state tax information is currently 2.9%, with some cities and counties having additional taxes.
Personal property tax: a tax on automobiles and other valuable property.
To learn about your state and local income-tax responsibilities, consult local tax authorities after you have arrived in the United States. Check the blue or white pages of the local telephone book for the appropriate government listings. You are generally only taxed on your income based on U.S. sources. Sources of U.S. income include: on-campus employment, scholarships, fellowships, graduate assistantships, practical or academic training, and any compensation received for labor. Note that "income" is not limited to wages paid to you in cash, but also includes that portion of your scholarship, fellowship, or assistantship that is applied to your housing and meal expenses. The portion applied to your tuition fees, books, and supplies is not counted as income. The campus payroll office will help you make these distinctions. Be sure to inquire about the applicability of any tax treaty that might exist between your country and the United States.
Reporting Requirements for Dependents:
F-2 and J-2 dependents, regardless of age, are expected to file the tax form 8843 annually in the United States, even if they have no income from a U.S. source. In the case of F-2s (who cannot work in the United States), the completion of a tax form is simple. A J-2 dependent, who may get permission to work in the United States, is taxed on his or her earnings.
April 15: The last day on which residents and nonresidents who have earned wages from U.S. sources may file their U.S. federal income-tax returns for the previous year. For 2018, due to the 15th falling on a Sunday, the deadline is April 17.
June 15: The last day on which nonresident students and their dependents who have no wage income from U.S. sources in the previous year may file their Form 8843 and/or 1040NR-EZ or 1040NR returns.
Publications: You can find several publications provided by the Internal Revenue Service that will help guide you through your tax forms. Find these publications at the Internal Revenue Service links below:
- US Federal Income Tax Guide for Aliens and
- US Federal Income Tax Guide for International Students and Scholars
- IRS Publications:
- Publication 519: U.S. Tax Guide for Aliens. Helpful when preparing a nonresident tax return (1040NR or 1040NR-EZ).
- Publication 901: U.S. Tax Treaties. Essential for individuals from nations having tax treaties with the United States.
- Form 8843: Statement for Exempt Individuals and Individuals with a Medical Condition. This one-page document must be completed and returned with the 1040NR and 1040NR-EZ. It verifies nonresident alien tax status.
- Form 1040NR: U.S. Nonresident Alien Income Tax Return. The longer version of the return completed by many nonresidents. This form is distinct from the 1040, 1040A, or 1040EZ filed by residents for tax purposes. It is not interchangeable with those forms. The IRS publishes an instruction booklet to accompany the form.
- Form 1040NR-EZ: U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents
Some Related Websites:
- Internal Revenue Service
- IRS Forms and Publications
- IRS Tax Topic: Resident and Non-Resident Aliens: Description of the substantial presence test, exceptions to the test for exempt individuals and tax return filing obligations for nonresidents.
Helpful telephone numbers: IRS (for general tax information): 1-800-829-1040 To order forms: 1-800-829-3676 U.S. tax laws are difficult to understand, so some students may be tempted to ignore this obligation. Be aware, however, that the amount of information shared by the IRS and USCIS is increasing each year. It is in your best interest to meet your tax obligations.
Be Aware of Tax Scams
Every tax season there are numerous 'tax scams' where scammers try to obtain personal information over the phone or by email. Never provide your personal information in response to such a contact. See information on the IRS webpage about scams.