Income Tax Tips For International Students
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Income Tax Tips For International Students for use in Completing 1998 Income Tax Returns
February 12, 1999
Compiled by the International Student and Scholar Services Office of Binghamton University. We appreciate their willingness to allow us to post this information on our web site.
The following information is designed by the office of International Student and Scholar Services at Binghamton University for international students in F-1 or J-1 status who have been in the U.S. in F-1 or J-1 status for 5 years or less years (1994 or later) and are therefore eligible to file as non-residents for tax purposes. We hope you find this information helpful.
The material contained in this message comes from Internal Revenue Service publications, discussions with IRS staff, and other income tax publications and materials.
ISSS staff are sometimes asked what can happen if an F-1 or J-1 student fails to file tax forms yearly. There can be immigration consequences for failing to file tax forms. For example, applicants to change from F-1 to H-1B (the professional worker visa) can be asked by the Immigration Service to submit copies of previous years' income tax forms as part of their H-1B application. Applicants for permanent residency ("green cards") can be asked to show copies of tax forms filed for previous years. A person who appears at a U.S. consulate abroad for consular processing of a permanent residency visa application may be asked to produce U.S. income tax forms from their previous years in the U.S.
Federal and New York State income tax forms for non-residents, and a smaller supply of forms for those eligible to apply as residents for tax purposes, are available in the office of International Student and Scholar Services. Federal tax forms and publications are also available by calling 1-800-829-3676, by fax-on-demand by calling 1-703-368-9694 from your fax machine, or from the Web at www.irs.ustreas.gov. (New York State forms and publications are also available by calling 1-800-462-8100, by fax-on-demand by calling 1-800-748-3676 from your fax machine, or from the Web at www.tax.state.ny.us. For links to the tax authorities of other states, visit the web site of the Federation of Tax Administrators: http://www.taxadmin.org/fta/FORMS.html. Most states provide downloadable tax forms.
For assistance with Federal forms, call the Internal Revenue Service toll free at 1-800-829-1040 or visit their web site listed above. The Internal Revenue Service also offers free advice and answers to international tax questions. Contact the IRS national office Hotline at 1-202-874-1460 for assistance. This is not a toll free number.
You may also want to visit the web site of Windstar Technologies, Inc. at http://www.windstar-tech.com which features articles and reference information on a number of topics of interest to international students, including:
- U.S. taxation of foreign students and scholars: A road map to an individual's tax return
- U.S. Taxation of Foreign Students and Scholars
- Tax Treaty Benefits for Foreign Student and Scholars: How Tax Treaties Work
The complete text of each country's tax treaty with the U.S.
Frequently Asked Questions
1. I'm an F-1 or J-1 student and I had no U.S. income during 1998, or my only U.S. income was bank interest. Do I need to file any tax forms?
Yes. You need to file Form 8843. This is the only form you will need to complete, which is a change from previous rules, which used to require that students with no income file both from 8843 and 1040NR or 1040NR EZ. F-1 or J-1 students with U.S. income from other sources, such as dividend income, salary or wages, scholarships or fellowships, prizes or awards will need to file form 1040NR or 1040NR EZ.
2. What about my F-2 and J-2 dependents?
All F-2 and J-2 dependents, whether or not they are students, must file Form 8843 even if they had no U.S. income of any kind for 1998, or if the only income they had was from bank interest. If there was any other U.S. income, they will also need to file a 1040NR EZ or 1040NR.
3. I'm a new student for the Spring 1999 semester but arrived in the U.S. in late December 1998. Do I need to file a tax form?
Yes! If you are in F-1 or J-1 status, or a F-2 or J-2 dependent, and were in the U.S. for any part of 1998, even if it was just a few days, you will need to file a tax form. If you had no U.S. income in 1998, you will only need to file Form 8843.
4. If I have U.S. income other than bank interest, which form should I use, 1040NR EZ or 1040NR?
Most students will find that they can use the 1040NR EZ, which is much simpler to complete than the 1040NR. Whichever form you use, you must also complete Form 8843. However, there are some rules and limits for the 1040NR EZ. You may use the 1040NR EZ if:
- Your only U.S. income was from wages, salaries, tips, taxable refunds of state and local income taxes, and scholarship or fellowship grants. (If you had dividend income from stocks or bonds, or taxable interest from mutual funds, you must use 1040NR.)
- You do not claim any dependents (only citizens of Canada, Mexico, India, Korea and Japan can claim spouses and/or children as dependents, and they can only do so by filing form 1040NR).
- You cannot be claimed as a dependent on another person's U.S. tax return.
- You were born after January 1, 1934 and were not blind at the end of 1998.
- Your taxable income was less than $50,000.
- The only itemized deductions you claim is for state and local taxes (if you wish to claim charitable or other deductions, you must use 1040NR).
5. What is the deadline for filing tax forms?
If you are an employee and received wages subject to U.S. income tax withholding, you must file your tax forms by April 15, 1999. Otherwise you must file your tax forms by June 15, 1999. Individuals filing only Form 8843 must file by June 15, 1999.
6. My bank (or credit union) mailed me a form in January, called a Form 1099-INT, indicating the amount of interest I earned on my savings account/money market account/certificate of deposit. Do I need to include this amount on my income tax forms?
It depends. Non-residents filing form 1040NR EZ do not include U.S. bank or credit union interest as income. But nonresidents filing Form 1040NR would include this interest on Item L (page 5).
7. Both form 1040NR EZ and 1040NR ask for social security numbers or taxpayer identification numbers. Is this the same as the number I was issued by the university when I was admitted?
It has the same number of digits. NO! All F-1 and J-1 who have been authorized to work in the United States should have a Social Security number (SSN), issued by the Social Security Administration. Students in F-1 and J-1 status who do not yet have a social security number (and their dependents in F-2 or J-2 status who may not be eligible for a SSN) need an identification number to file their income tax form. Such individuals must obtain an Individual Tax Identification Number (ITIN). They can apply for an ITIN by completing form W-7 and bringing it in person, along with their passport and other identifying documents, to the local office of the Internal Revenue Service (IRS). Form W-7 is available from the ISSS. Form W-7 is designed for individuals who are not eligible to apply for Social Security Numbers. The IRS has recently announced that F and J visa holders who have no U.S.-source income, and thus file only the Form 8843, need neither an SSN nor an ITIN to file Form 8843.
8. I am a student from India, and I've heard that my country's tax treaty allows me to claim the standard deduction, but I can find no additional information about this benefit.
Information on this benefit can be found in IRS Publication 519, p.22. Students from India have the choice of itemizing their deductions or taking the standard deduction amount. Since the standard deduction for 1998 is $4250 if you are single, most will take this amount. On form 1040NR EZ, enter $4250 on line 10 if you are single. If you are married, and your spouse also files a return, enter $3550 on line 10. On page 2 of the 1040NR EZ, question J, "type and amount of income exempt from tax", write: Standard deduction allowed under U.S.-India Tax Treaty article 21(2). If you are married and your spouse has no U.S. source income, file form 1040NR, not form 1040NR EZ. Enter the standard deduction on line 3 of schedule A of form 1040NR. In the space to the left of line 3, write: Standard deduction allowed under U.S.-India Tax Treaty article 21(2). Also enter the amount on line 34 of form 1040NR. By claiming the standard deduction, you cannot claim any itemized deductions, such as state and local taxes.
9. If my country has a tax treaty with the U.S., does that mean I don't have to file any tax forms?
No! In order to claim tax treaty benefits, you must file federal income tax forms 8843 and either 1040NR EZ or 1040NR.
10. I've received a form 1042-S. How do I reflect this on my tax return?
It all depends upon the TYPE of income being reported on the 1042-S. Look at the income code in column (a) of the form. An income code of 15 is for a scholarship or fellowship grant, and would be reported on line 5 of form 1040NR EZ or line 8 of form 1040NR. An income code of 19 refers to a tax treaty amount withheld from wages, and would be reported on line 6 of form 1040NR EZ or line 22 of form 1040NR. You would not include this amount as part of your wages on line 3 of form 1040NR EZ or line 8 of form 1040NR.
11. I am eligible to claim a tax treaty deduction, since my country has a tax treaty with the U.S. but I never received a form 1042-S. Instead, all of my earnings are reported on my form W-2. How do I complete form 1040NR EZ to claim my tax treaty deduction?
Let's assume, for the sake of this example, that you are permitted to claim $2000 as your tax treaty amount to be deducted from wages. Subtract your tax treaty amount from your salary and wages as reported on your form W-2. Write the difference on line 3 of form 1040NR EZ. If your tax treaty amount is more than your salary as reported on your W-2, put zero on line 3. Then indicate the tax treaty amount on line 6. (You can verify your country's tax treaty information by consulting IRS Publication 901, U.S. Tax Treaties. Be sure you are consulting the section which summarizes tax treaty benefits for students. Forty-five countries have tax treaties with the U.S.) Be sure to answer question j page 2 completely. Students from India should follow the instructions provided in item 8.
12. How do I complete Form 8843?
All F-1 and J-1 students filing form 1040NR EZ or form 1040NR must attach Form 8843 to it. F-1 and J-1 students and F-2 and J-2 dependents with no U.S. income, or for whom the only U.S. income is bank interest complete Form 8843 only. To complete Form 8843, print your name and social security number (or individual taxpayer identification number) across the top of the form. Complete Parts I and Part III (Leave Part II blank).
13. Do I also have to file a New York State income tax form?
If you have earned no income in the U.S., you do not have to file a New York State form. If you earned more than $7500 in income during 1998 and are single (or more than $6500 if you are married), then you must file form IT 203 and form IT 203-ATT. You may also want to file a New York State form even if your income was less than the amounts listed above, if any New York State tax was withheld during 1998, and you would like to obtain a refund of that tax. The way to tell if New York State tax was withheld is to look at your form W-2, Wage and Tax Statement, and see if there is any amount in box 18.
14. What parts of New York State form IT-203-ATT do I need to complete?
On the top of the form, print your name, social security number, and occupation (student). Then complete schedule B to reflect your address or addresses in New York State for 1998. On one of the empty lines in schedule B, write the words "Non-Resident Alien for Tax Purposes."
15. I worked in New York City for part of 1998, and received a W-2 form from my New York City employer. Are there any special forms I have to file?
Yes, you also need to file form NYC-203 and attach it to your New York State return. Copies of forms NYC-203 and instructions are available in the ISSS.
16. Where do I mail these forms?
Before mailing anything, MAKE COPIES FOR YOUR RECORDS! Mail forms 8843, 1040NR EZ and 1040NR and the appropriate attachments to:
Internal Revenue Service Center Philadelphia, PA 19255
Mail forms IT 203 and IT 203-ATT to:
State Processing Center (write "Refund '98" on the envelope if you are due a refund of state tax)
P.O. Box 61000
Albany, New York 12261-0001
ISSS staff are neither qualified nor permitted to give individual tax advice. Students with complicated tax situations may wish to consult with a tax preparation service, professional tax accountant, or tax attorney who is knowledgeable about nonresident tax law.
February 1999
International Student and Scholar Services, Division of Student Affairs, Binghamton University, State University of New York. Thanks to tax attorneys Paula N. Singer, Bertrand M. Harding and NAFSA member John Eng-Wong (Brown University) for their review of the material from the 1998 version of this publication.
For further information on these or any other immigration issues, please contact Miller Mayer.