Virtually ALL F or J international students and scholars and their dependents must file an income tax form or forms 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!
All nonresident aliens present in the U.S. in F-1, F-2, J-1, or J-2 non-immigrant status must file Form 8843 “Statement for Exempt Individuals and Individuals with a Medical Condition”—even if they received NO income during any given calendar year. The form is merely an informational statement required by the U.S. government for certain nonresident aliens (including the spouses or dependents of nonresident aliens). See link for additional information: https://www.irs.gov/pub/irs-pdf/f8843.pdf. The form 8843 must be filed if an individual is:
- present in the U.S. during the tax year
- a nonresident alien
- present in the U.S. in F-1, F-2, J-1, or J-2 status
If an individual meets all three qualifications above, the individual must file Form 8843, regardless of the individual’s age and even if the individual is not required to file a U.S. income tax return (Form 1040NR or Form 1040NR-EZ).
See this helpful step-by-step resource on how to fill out the form 8843.
Tax Software Resources for UCCS Students:
Remember: International Affairs 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 WindStar 'Foreign National Tax Resource' software. Check your email for direct emails from International Affairs 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). WindStar can only be used if you are a non-resident alien for tax purposes.
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 International Affairs 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.
Nonresident Alien – If you are not a U.S. Citizen, you are considered a nonresident alien unless you meet the Green Card Test or Substantial Presence Test. IF you meet one of these two tests, you may be considered a resident alien for tax purposes only. For more information on these tests please see the U.S. Tax Guide for Aliens, IRS Publication 519.
Form W-2, Wage and Tax Statement, is used to report wages paid to employees and the taxes withheld from them. The form is also used to report FICA taxes to the Social Security Administration. Relevant amounts on Form W-2 are reported by the Social Security Administration to the Internal Revenue Service.
Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation. The Form W-2 reports income on a calendar year (January 1 through December 31) basis. However, this refers to the time period in which an employee has been compensated, not necessarily the actual dates of employment. After the final payroll in December, employment is normally compensated and subject to tax in the following year.
W-7 – Application for IRS Individual Taxpayer Identification Number (ITIN). For use by individuals who are not U.S. citizens or permanent residents.
ITIN – IRS Individual Taxpayer Identification Number (ITIN) is for federal tax purposes only. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA).
1042-S – Foreign Person’s U.S. Source Income
1040NR – The forms 1040NR and its “easy” version 1040NR-EZ are to be used by nonresident aliens filing a tax return. Nonresident aliens (eg F-1, J-1, etc. holders) who have been in the US for less than 5 years should use the 1040NR form.
1098-T – Form 1098T is a form used to report certain tuition payments to the individual and the IRS. It can be used by U.S. tax residents (citizens, permanent residents, and residents under the substantial presence test) to claim certain tax credits. Persons who are ‘nonresident aliens’ are not issued the form as you can not take any of those credits.
1099-INT – 1099 forms report various types of income other than wages, salaries, and tips. The 1099-INT form is used to report interest income from a Savings or Money Market bank account. You will receive this form by mail from your bank by February.
Form 8843: Special Filing for F-1, F-2, J-1 and J-2 Persons:
Persons in F-1, F-2, J-1 or J-2 nonimmigrant status must file Form 8843 even if they received NO income in the tax year. If you are required to file an income tax return, you should also include Form 8843 with your income tax filing if you are a non-resident for tax purposes. In general, you do not need to have a Social Security Number (SSN) or Individual Taypayer Identification Number (ITIN) in order to file Form 8843. However, if you have an ITIN or SSN you should put that number on the 8843.
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.