Tax Overview for International Students
The information provided here is intended to give you a general sense of taxpaying requirements. The International Student Advisor is not qualified to answer individual questions from students regarding their specific tax liabilities. US tax law is extremely complex and each student's situation varies. It is the responsibility of each international student to understand his or her own tax situation. Specific instructions are provided by Internal Revenue Service (IRS) and by New York State. Tax forms and instructions are available on the World Wide Web or you may contact the INS by telephone to ask your specific questions. Tax returns must be filed by April 15 if you earned income in the United States during the previous calendar year, or June 15 if you did not.
The Center for International Programs will schedule an Income Tax Workshop early in the spring of each year - well in advance of the filing deadlines. Please look for this information. This workshop will be your chance to receive an overview of tax requirements and ask specific questions.
The Internal Revenue Service is the United States government agency responsible for the collection of federal income taxes. All non-immigrants in F or J status (both the principal and all dependents) are required to file an individual income tax return-even if they have no US source income of any kind-if they were in the US during the tax year. The tax year begins January 1st and ends December 31st. As the penalties for failure to file are severe, you should read this section carefully.
If you or your dependents hold F or J (student category) immigration status, usually you are considered a nonresident for tax purposes for a period of five "tax years". If you enter the United States at any time during the tax year - in August, for example - the entire year is counted toward the five years during which you must file as a nonresident for tax purposes. As a nonresident for tax purposes, you must file federal form 1040NR and an Individual Federal Income Tax Statement. If you have US source income, you must also file a state and local tax return. The corresponding New York State form is IT-203. Nonresidents for tax purposes whose earnings in the United States during a taxable year are less than the amount of the "personal exemption"; (a dollar amount specified in the instructions to form 1040NR which changes each year, but is roughly $2,300) pay no taxes; however, all nonresidents in F or J status (both principals and dependents) must file a form 1040NR and an Individual Federal Income Tax Statement. You should send your forms to the IRS Center, Philadelphia, PA 19255 by April 15th for the previous tax year. In order to file an income tax form, every person must have either a social security number or an individual taxpayer identification number. Instructions for obtaining these are given below.
Withholding is the term used to describe a portion of your check amount that an employer is required to pay directly to federal, state, and city taxation authorities in anticipation of your annual income tax obligations. The check you receive, therefore, is for less than you earned during the pay period. The amounts withheld are credited toward your tax bill so that most taxpayers will have to pay relatively little additional money at annual tax filing time and many will qualify for a refund of money over-withheld.
If you will be on the SUNY New Paltz payroll, you should receive and complete a W-4 form before receiving the first paycheck. The W-4 is an extremely important form. Completing it incorrectly could mean that you will owe taxes when filing tax returns in April. Instructions on how to do so are provided in the Center for International Programs.
Currently the US has tax treaties or agreements with roughly 40 countries and territories under which their citizens may be tax exempt from all or part of US Income tax. To see if your country is among these and how a treaty may affect your tax status, check IRS publication #901 US Tax Treaties. Copies are available in the Center for International Programs. Further information may be obtained free from Internal Revenue Service publications or from IRS Forms Distribution Center, PO Box 25866, Richmond, Virginia 23260. You may also download the forms or call a toll free number, 1-800-829-3676, to obtain IRS forms.
The following are some of the forms or instructions that may be relevant to you:
- Instructions for Form 1040NR
- #508 Educational Expenses
- #519 United States Tax Guide for Aliens
- #520 Scholarships and Fellowships
- #901 United States Tax Treaties
During tax season (January 1 through April 15) forms are available in most post offices, libraries and some banks. Publications may be ordered by calling the IRS at 1-800-829-3676 or printed from the Forms and Publications section of the IRS web site at: www.irs.ustreas.gov
Definitions for Federal Tax Purposes
Alien - A term used by the Internal Revenue Service for an individual who is not a US citizen.
Exempt Individual - A person not subject to the Substantial Presence test (see below) which determines whether someone files as a resident or nonresident. Many students incorrectly believe this means they are not required to file a tax return and/or pay taxes.
Substantial Presence Test (SPT) - A formula devised by the Internal Revenue Service to determine whether a nonimmigrant is a resident or nonresident for tax purposes.
Internal Revenue Service - Also known as the IRS, this is the federal agency responsible for collecting taxes and enforcing tax reporting and collection laws. It is a division of the Treasury Department.
Nonimmigrant - An individual with a permanent residence abroad who is in the United States for a primary purpose that is temporary, such as those in J-1 or F-1 immigration status.
Nonresident - An individual who is in the United States for a temporary purpose of a relatively short nature (usually less than five years). Although required to file a tax return annually, only income from US sources is taxed.
Resident - An individual who is a US citizen, a US permanent resident or a nonimmigrant who has been in the United States sufficient time to qualify to file as a resident. Residency is determined by the Substantial Presence Test.
Social Security - A term used to describe an agency, a card and two types of tax. The Social Security Administration (SSA) is a government agency housed in the Department of Health and Human Services. The card contains a unique nine-digit identification number issued to qualified individuals primarily to determine eligibility for social benefits through various forms of employment. The number on the card is also used for tax record keeping. The taxes, known as FICA (Federal Insurance Contribution Act) and Medicare, are withheld from employment income to later provide for retirement. The actual amount withheld from a paycheck for FICA is 7.65% of total earnings to a certain salary level. Students with F-1 and J-1 Status are not required to pay these taxes.
Tax Treaty - An agreement between the United States and another country to determine how the country's residents will be taxed when temporarily in the United States. (In this case, resident refers to tax residency.) A treaty can give certain tax benefits. A note of caution, however. Tax treaties are lengthy, complicated and very specific. Just because someone is a resident of a tax treaty country does not mean that the person will automatically qualify for tax benefits.
Individual Tax Identification Number (ITIN) - An individual may not be eligible for a social security number, which is routinely issued only to US citizens, US permanent residents and non-immigrants with legal work permission. In that case, the nonimmigrant must apply to the Internal Revenue Service (IRS) which assigns a unique nine-digit code for tax-related purposes. This generally applies to F-2 dependents.
Withholding - The retention of a given amount of a salary (wages) by an employer on behalf of the government for tax purposes. Withholding is the term used to describe a portion of your check amount that an employer is required to pay directly to federal, state, and city taxation authorities in anticipation of your annual income tax obligations. The check you receive, therefore, is for less than you earned during the pay period. The amounts withheld are credited toward your tax bill so that most taxpayers will have to pay relatively little additional money at annual tax filing time and many will qualify for a refund of money over-withheld.
Dates
April 15 - The last day to file an annual
tax return with the US government if you are a resident or a nonresident
with US source income. It must be postmarked by April 15.
June 15 - For nonresident scholars and their dependents who do not have any source of US
FICA - A separate tax issue is Social Security tax, also known as FICA. A 1984 tax law determined that F-1 and J-1 students are responsible for FICA taxes in some situations, dependent on the length of time that a student has been in the United States. However, students enrolled in and employed by an academic institution are exempt from Social Security taxes for that employment. In general, students who are in F-1 or J-1 immigration status are exempt for FICA taxes on other types of authorized employment during the first five years in the US, during which time they are classified as "nonresident aliens" for tax purposes. [26 USC 3121(b)(19)].
If FICA has been withheld in error, the employer must provide a refund. The employer applies for reimbursement by filing a claim on form 941C with IRS. However, if you are unable to obtain a refund in this way, file a claim on form 843 with the Internal Revenue Office to which your employer pays Social Security taxes. If you do not know which office this is, write to: Internal Revenue Service Center, Philadelphia, PA 19255.
If Social Security tax was withheld in error and your employer is a state or local government organization, including educational institutions, you can request a refund from the local government employer or school administrator.
Social Security Numbers - International Students may apply for a Social Security number soon as soon as they arrive. Even if you are not employed, it is helpful to have one as an identification number for various reasons. You only have a Social Security number if you have made a formal application for one. If you are not certain, and the first five digits of your nine-digit number are zeros of if the number begins with 998, this is a so-called "dummy number" which you were assigned temporarily, and can be replaced with a valid Social Security number. You must submit your application in person at a Social Security Administration office, two of which are listed below. Please come by the Center for International Programs first so that we may give you a letter to facilitate your application.
Social Security Administration
289 Stockade Drive
Kingston, NY 12401
(845) 338-2589
Social Security Administration
Vassar Main Building
191 Main Street
Poughkeepsie, NY 12601
(845) 452-3584
The Social Security card issued to nonresident students may specify that it is "valid only with employment authorization." Students may use this card number if employment has been properly authorized by INS or the International Student Advisor.