It’s tax season in the U.S; federal tax returns are due July 15; most states have the same filing deadline. Normally they’re due April 15 but the deadline is extended due to the coronavirus pandemic. The Internal Revenue Service (IRS) is the U.S. government agency that collects federal taxes and has detailed information on their site for Foreign Students and Scholars. Students and scholars should check to see if their International Student Services office has tax information or workshops to help. The information in this post only discusses federal income taxes; you may also have state income tax requirements.
For students, teachers or trainees on F, J, M or Q visas there are 2 preliminary questions:
- Are you a resident or nonresident? This determines the forms and rules that apply. U.S. tax residents pay taxes on their worldwide income; nonresidents pay taxes only on their U.S. based income.
- Whether you’re a resident or nonresident, do you have to file a federal tax return?
Question 1: Are you a resident or nonresident? In general you’re taxed as a U.S. resident for 2019 tax purposes if you either:
- have a ‘green card’ which means you’re a lawful permanent resident; or
- you meet a 183-day substantial presence test. You pass this test if you were in the U.S. for at least 31 days during calendar year 2019 and have been in the U.S. for at least 183 days within the last three years (the current year and the two preceding calendar years).
It’s a complicated test and there are additional issues, such as whether you’re intending to stay permanently in the U.S., perhaps through marriage or employment. If in doubt you’ll need further advice. Note there’s a third possibility – “dual status alien”– in which for tax purposes you’re a resident for part of the year and a nonresident for the rest of the year.
Question 2: Do you have to file a federal tax return? A tax return is the form used to report your income, deductions, and credits to the IRS. In general, you should file a tax return if you’re owed a refund of taxes that your employer withheld from your paycheck during the year, or if you owe taxes. Nonresidents for tax filing purposes file a Form 1040-NR or Form 1040-NR-EZ . There may be a tax treaty with your home country that will exempt you from U.S. tax liability.
Students, teachers and trainees on F, J, M and Q visas who have no income (such as wages, salaries, tips, etc., or scholarship or fellowship grants) or other income subject to U.S. tax under section 871 of the tax code do not have to file a return.
Even if you don’t need to file the above tax returns, every international student must still file an informational tax Form 8843 once a year for the first five calendar years that you are in the U.S. This form asks for information to confirm the foreign national is not considered a resident for U.S. tax purposes.
The above are the simplest aspects of U.S. tax law for international students, scholars, trainees and teachers. Seek professional advice for specific questions.
