Familiarize yourself with IRS materials and vocabulary

Publication 519: US Tax Guide for Aliens Pay special attention to what applies to you.
Publication 520: Scholarships and Fellowships If you have a scholarship, fellowship, grant, tuition reduction, etc., be sure to read, and understand, these IRS rules and definitions. Understanding the different tax categories may help you file your tax returns, in a way that saves you money.
Publication 597: Information on the US-Canada Income Tax Treaty If you are from Canada, read this publication.
Publication 901: US Tax Treaties Check to see if your country has a tax treaty with the USA. If so, make sure you understand the detailed information therein.
Form 1040NR and Form 1040NR-EZ Review the instructions for these forms.

Determine whether your IRS status is “resident” or “non-resident” alien

IRS definitions of “resident” and “non-resident” differ from definitions pertaining to your I-94 status, as an international student/scholar/researcher in the USA. IRS usually considers F-1 and J-1 students/scholars/researchers who comply with US Department of Homeland Security and USCIS (formerly INS) regulations to be non-residents, for up to five calendar years. If you have been in compliance with F-1 or J-1 status for more than five calendar years, you must carefully review IRS Publication 519, to determine whether you should file as a resident or a non-resident.

Non-resident aliens only report, and pay taxes on, US source income. In addition, if a tax treaty exists between your home country and the USA, all or a portion of your US source income may be exempted from taxes as well.

If you have been in the USA for more than five calendar years, for tax purposes, you are probably a resident alien, unless certain exceptions apply. To learn what exceptions apply, see Publication 519: US Tax Guide for Aliens and instructions for Form 8843. Resident aliens should file Form 1040, 1040A, or 1040EZ.

Students with taxable US income

Every F-1, and J-1, student/scholar who receives any type of income from a US source (including Sarah Lawrence College), and who claims non-resident alien tax status, must file a Form 8843, as well as Form 1040NR-EZ or Form 1040NR, by April 15 of the given year.

Students with no taxable US income

Every F-1, and J-1, student with no US income needs to file only IRS Form 8843, by June 15 of a given year. Many tax preparers, however, recommend that all international students/scholars file either Form 1040NR-EZ or Form 1040NR, even if they have no income to report.

Find out if your country has a tax treaty with the USA

The USA has signed tax treaties with more than 50 countries. Many of these tax treaties provide exclusions for wages, scholarships, and fellowships, and other sorts of income paid to international students, researchers, professors, and scholars.

If you want to claim an exemption from withholding of US taxes, based on a tax treaty, you should file one or both of the following forms with the Bursar, and/or the Financial Aid Office, and renew your filing every year thereafter:

• Form 8233, to claim a treaty exemption related to income from wages

• Form W-8BEN, to claim a treaty exemption related to scholarship and fellowship income

Types of income you are expected to report

Payment for services performed in the US

Wages that appear on any W-2 forms are taxable income, and should be reported on your tax returns. Also, report any income you receive from sources outside the USA, for services performed while you are within the USA. Finally, any scholarship, or fellowship, income you receive might be taxable as wages, if you are required to perform any personal services, as a condition for receiving these income payments.

If employment of F-1 and J-1 internationals is authorized under their I-94 status (and they are considered non-resident aliens), then they are not covered under the US Social Security program. This means that there should be no withholding of Social Security, or Medicare, taxes from your pay, as long as you maintain F-1 or J-1 status, and you remain a non-resident alien for tax purposes. If, however, social security was withheld, you may claim a refund, by speaking with the Payroll office, and/or filing Form 843 (Claim for Refund and Request for Abatement.)

Scholarships, fellowships, grants, tuition reduction, etc. from a US source

For tax purposes, a fellowship, or scholarship, is an amount given to an individual to support her/his study, training, or research. If you are required to perform services, as a condition of receiving payment, then the payment will be treated as wages, not as a scholarship or fellowship. Recipients who are candidates for a degree are not taxed on portions spent on tuition, fees, books, supplies, and other required equipment.

However, amounts from a grant that are used for other expenses - e.g., travel, or living expense, not required for courses - are taxable. See Publication 520: Scholarships and Fellowships. Taxable scholarships and fellowships paid to non-resident aliens (in F, M, J, or Q status) are subject to 14% withholding of federal income tax, and should be reported on Form 1042-S. Non-resident aliens, in statuses other than F, M, J, or Q, are subject to 30% income tax on their scholarship or fellowship income. Tax treaties may eliminate such tax liabilities on scholarships and fellowships.

Interest from US bank accounts

Interest income not connected to a US trade, or business, is not taxable for non-resident aliens, if that interest income is paid from one of the following sources:

• US Bank
• US Savings & Loan Association
• US Credit Union
• US Insurance Company

This nontaxable interest should NOT be reported on Form 1040NR or 1040NR-EZ. We advise you to submit Form W-8BEN to your bank, or financial institution, before the end of the tax year.

Collect the following information and forms:

• Your passport including
  • All visas granted
  • I-94 card

• A list of all US entry, and exit, dates, up to December 31 of the given year, and the visas you used to enter the U.S.

• Your I-20 or DS-2019

• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)

• Addresses
  • Current US address
  • Permanent address in home country

• Name, title, address, and phone number of the Director of your Program (for Graduate Students/Scholars Only), or you may use the name, title, address and phone number of your International Student/Scholar Advisor).

• Documents establishing all US source income
  • Forms W-2, 1099-Int, 1099, and/or 1042-S
  • Other income statements
  • Letters describing scholarship or fellowship (to determine taxable items)

• Sarah Lawrence College address and phone number