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Please keep in mind that the Internal Revenue Service (IRS) is the official source of information about US taxes, and your university’s international office will be a great resource when filing for taxes. Any information the IRS or your international office provide will supersede what is on this webpage. This webpage is meant to merely provide a starting point for your own research into tax issues in the US and is not in any way meant to be taken as official tax advice.
Each year the Internal Revenue Service publishes "Publication No. 519: U.S. Tax Guide for Aliens" which we encourage you to download and read thoroughly.
In order to begin filing US taxes, you need to first determine your tax status. Anyone who is not a US citizen is considered an “alien” for tax purposes. To find out which federal income tax return forms to file, you need to determine if you are a resident alien or a nonresident alien.
It is important to note that your tax status is different to your immigration status; you may be a citizen of a different country but be considered a US resident for US tax purposes. Generally, F-1 and J-1 students are considered nonresident aliens for tax purposes for their first five years in the US, and non-student J-1 visa holders (such as professors, scholars, researchers, etc.) are considered nonresident aliens for at least their first two years in the US, unless they are being paid entirely by a foreign employer, in which case this would extend to four years. **As the majority of those students with F or J visas are nonresident aliens, the information provided on these pages is for nonresident tax aliens.**
As a non-US citizen, you are considered a nonresident alien for tax purposes unless you meet the Substantial Presence Test. Some universities may provide a tax software program called CINTAX that will help you to determine if you are a resident or nonresident and help you fill out the applicable federal tax forms.
The Substantial Presence Test is the formula used by the IRS to determine when a non-immigrant student becomes a resident for tax purposes. F-1 and J-1 students are not subject to the substantial presence test until after five years in the US, and J-1 researchers and scholars after two years, as long as you file Form 8843.
No. The term “exempt individual” is used to identify those individuals who are not subject to the Substantial Presence Test. Exempt individuals must still file the appropriate tax forms to establish their nonresident status (Form 8843) and pay taxes on income earned.
Resident aliens are taxed on all income from both US and UK sources. A nonresident alien is taxed on income from US sources only. Nonresident aliens may also qualify for exemption from certain types of contributions to the US Medicare and Social Security programmes, whereas resident aliens cannot.
For nonresident aliens, the following are considered taxable income for federal and/or state taxes: wages from on campus work (including assistantships), scholarships paid by a US source (university, foundation, etc.), tips, interest on savings and dividends on stocks. Nonresident aliens do not have to file US taxes for UK earnings, money from parents, or scholarships paid by a UK source. For more information on what qualifies as taxable income, see the IRS website.
According to the IRS website, “In general, those portions of a scholarship, fellowship, or grant used to pay tuition, fees, books, supplies, or equipment are classified as a ‘Qualified Scholarship’ and are not includible in the gross income of the recipient under Internal Revenue Code section 117 if the recipient is a candidate for a degree. Any portion of the scholarship, fellowship, or grant that does not correlate to the five items mentioned above is includible in the gross income of the recipient, which means that it is subject to withholding. Stipends, tuition waivers, or any other financial aid paid to or on behalf of nonresident aliens which require the recipient to perform services past, present, or future, in exchange for the financial aid are taxable as wages, are reportable to IRS on Forms 941 and W-2, and are subject to the withholding rules discussed under ‘Wages Paid to Aliens’. For non-degree candidates, the entire grant is includible in the gross income of the recipient and is subject to withholding. Research grants awarded to post-doctoral research scholars are entirely includible in the gross income of the nonresident alien recipient and, as such, are subject to withholding. However, certain deductions related to the research may be allowable against the gross income.”
This means that if you are a nonresident degree-seeking student, then US-based scholarships used only for tuition, fees, books, supplies or equipment are exempt from taxation. US-based scholarships used for anything other than the five items listed above including scholarships used for living expenses and maintenance are subject to taxation. Also, assistantships are considered wages and therefore taxable. If you are a non-degree-seeking student, all grant or scholarship money is subject to taxation.
Additionally, the US has tax treaties with several countries, one of which is the UK. For the UK, “a student or business apprentice who is a resident of the UK immediately before visiting the US and is in the US for the purpose of full-time education at a recognized educational institution or full-time training is exempt from US income tax on amounts received from abroad for the individual's maintenance, education, or training.” For more information, consult the IRS publication.
As mentioned above, all nonresident aliens, regardless of whether they earned taxable income, must file Form 8843 to establish their nonresident tax status. Typically, international students and scholars who earned taxable income during a particular year must file Form 1040NR or Form 1040NR-EZ. Additionally, you may also need to file state income tax forms. You will need to check with your state government’s website or international office for more information.
Q: What if I am a nonresident alien on a short-term study abroad programme and DID NOT work in the US or receive any taxable income? Do I still have to file any forms?
Yes, but you would file only Form 8843.
Q: What if I am a nonresident alien and I DID work in the US or receive taxable income?
First, you will need to apply for a Social Security Number. When you begin work, you will fill out the W-4 form for your employer. On this form, you will be asked whether you would like the US government to withhold a portion of each pay cheque, based on projected earnings, to cover the taxes you will owe at the end of the tax year. (Remember as noted on the Types of Taxes page, unlike the UK PAYE system it is your responsibility to determine your tax liability and to file a return.)
If you overestimate your withholdings (ie take out more money from each pay cheque than necessary), you will get a refund once you file your taxes. If you elect for the government not to remove a portion with each pay cheque, you must pay the full amount of taxes owed once you file your taxes for the year.
At the end of the year, you will receive a W-2 form from your employer (similar to the P-60 in the UK) that details the amount of money you have earned in the past year and how much was withheld. As you fill out your federal tax forms, you will calculate how much total money needs to be paid or is owed to you. It is important to keep your pay stubs as you receive your pay cheques in case there is a misprint or other discrepancy on your W-2.
Only if you are earning income in the US. You must have a Social Security Number (SSN) in order to file a federal tax return for any US-based taxable income. It is a nine digit number in the format of 3 digits – 2 digits – 4 digits, that is used for both tax and identification purposes and is somewhat akin to the UK’s National Insurance Number. You can apply for a SSN at your local Social Security Office when you arrive in the States. If you need to start work straight away when you arrive in the US (to start an assistantship for example), ask for a receipt from the local office so that you can present it to your employer until you receive the official paper card. In order to qualify for a SSN, you must meet certain requirements, which can be found on the Social Security administration’s website.
Anyone who does not meet the requirements to obtain a SSN must apply for an Individual Taxpayer Identification Number (ITIN). The application form, Form W-7, and instructions can be downloaded from the IRS website. It can take up to five to six weeks to receive your number, and tax forms submitted without an ITIN will not be processed.
Nonresident alien students are not subject to Social Security and Medicare taxes, but your employer may not be aware of this. If your employer deducts taxes from your pay cheques for Social Security and Medicare, you should first ask your employer for a refund. If you are unable to obtain a refund from your employer, you must file Form 843 and Form 8316 to obtain a refund from the IRS for Social Security and Medicare taxes held in error.
It is important to keep in mind that US employers may deduct Social Security and Medicare taxes (FICA) from international students’ pay cheques although nonresident alien students are not subject to Social Security and Medicare taxes. If you are an international student on OPT, a nonresident alien for tax purposes, and your employer has deducted Social Security and Medicare taxes in error, you are entitled to a refund. It is also important to keep in mind that if you have been in the US for more than five years, you may be subject to the Substantial Presence Test. If you have been present in the US for more than 183 days over the last three years, but not present for more than 183 in the last one year, you may qualify as a nonresident for tax purposes if you can prove a closer connection to a foreign country than to the US. For conditions and details, see the IRS website.
It is our understanding that a scholarship or fellowship is tax free only if the student is a candidate for a degree, uses the scholarship or fellowship to pay qualified educational expenses, and if it does not represent payment for teaching, research, or other services required as a condition for receiving the award. Qualified educational expenses include tuition and fees and course-related expenses such as books, supplies and equipment. The unqualified portions of awards (things like room and board) are taxable. (You will want to confirm this with the international student services at your university).