Tax Guidelines for Students with F-1 or J-1 Status

The college does not provide detailed tax assistance or advice; however, we often utilize the expertise of a tax consultant, to disseminate information and assist students/scholars with the tax filing process. It is highly recommended that you attend these scheduled seminars. The tax guidelines document should give you a sense of your tax obligations under the law. In order to be certain you’ve met all of your filing obligations, you are strongly advised (if you choose not to attend a tax information session) to consult a professional tax accountant, or an attorney who specializes in non-resident tax issues.

Taxation of international students/researchers/scholars is very complex. Although the process may be frustrating, do not ignore US tax laws. While there may not be an immediate penalty for non-compliance, there often is a severe penalty later on. Tax records are reviewed at important junctures, such as when you file an application for permanent resident status, or make application to graduate programs.

The United States Internal Revenue Service (IRS) requires that you submit tax returns by April 17, 2006. Federal, state and city tax offices use this same deadline.

(The usual deadline is April 15th of each year, unless April 15th falls on a weekend).

All F-1 AND J-1 STUDENTS, AND THEIR DEPENDENTS, ARE REQUIRED TO FILE FEDERAL TAX FORM 8843 EVEN IF THEY HAD NO INCOME DURING THE TAX YEAR, AND ONLY LIVED IN THE U.S. FOR A FEW WEEKS, OR MONTHS, DURING THAT YEAR.

The tax year is a full calendar year. F-1 and J-1 students, scholars and researchers who earn income must file federal and state tax returns. It is your responsibility to comply with U.S. tax regulations.

Several factors determine federal tax obligations for foreign nationals. Different combinations of these factors result in different tax obligations:

• Immigrant status
• Length of residence in the US
• Purpose of being in the country
• Intent to return to the home country, or to remain in the US for an extended period
• Country of citizenship
• Type of income

Unless otherwise classified by a tax treaty, F-1 and J-1 students/researchers are non-residents for tax purposes, for their first five calendar years in the United States. J-1 scholars are considered non-residents for their first two calendar years in the United States. Even if you were in the United States in F-1, or J-1, status for only one day in any given calendar year, you must count that day as a whole calendar year.

After five years, students/scholars are presumed to be residents, and must justify to the IRS continued filing as non-residents. Form 1040 must be used for filing purposes, if you have been in the U.S. for 4 years and one day of the fifth year (one day is calculated as a calendar year).

Non-residents:

• Pay tax only on income earned in the United States
• May claim only one personal exemption, regardless of total number of dependents (excepting citizens of Canada, Japan, Korea, and Mexico)
• May not take the standard deduction (unless classified as residents by tax treaty) and, therefore, must itemize deductions.

Most F-1 and J-1 students/scholars/researchers, with income, file form 1040NR-EZ. Those with more complex situations file form 1040NR.

For federal taxes, precise and detailed information is available in the following IRS publications and forms, and can be downloaded from the http://www.irs.gov/ website:

Pub. 519: U.S. Tax Guide for Aliens

Pub. 520: Scholarships and Fellowships

Pub. 597: Information on the US-Canada Income Tax Treaty

Pub. 901: U.S. Tax Treaties

Pub. 515: Withholding of Tax on Non-resident Aliens

Pub 4011: IRS Volunteer Quick Reference Guide

Form 8843: Statement for Exempt Individuals

Form W-8BEN: Certificate of Foreign Individuals

Form 8233: Exemption from Withholding on Compensation

Form 1040NR: U.S. Non-resident Alien Income Tax Return

Form 1040NR-EZ: U.S. Income Tax Return for Certain Non-resident

Aliens with No Dependents

For New York State and City taxes, you will need IT-203-P (which contains IT-203 and NYC-203). If you live in New Jersey, and earned under $10,000, you are not required to file NJ-1040NR. New Jersey residents may not need to file state and local tax returns, but they may need to file NYC tax returns. See NJ-1040NR for more details.

Remember These Forms Upon Accepting Income

Upon accepting employment, or when opening a bank account, the following forms should have been completed, signed, and submitted. The information collected is used to estimate tax withholding, and will affect your tax obligations.

Form I-9 (Employment Eligibility Verification)

Before you began working, your employer should have asked you to complete Form I-9, to show that you were eligible to work. You should have completed Section I with your personal information, including your Social Security Number. You should also have completed a statement that says, “I attest, under penalty of perjury, that I am….” You should have marked the box, “An alien authorized to work until…” and put the completion date on your I-20 (F-1), or if you are in J-1 status (DS-2019), the end date your International Student/Scholar Advisor or Responsible Officer used in your employment authorization letter. You should then have entered your I-94 number. You had to show your employer your passport, I-94, and I-20 or DS-2019. If you are enrolled full-time, and are in F-1 status ONLY, you are eligible to work at Sarah Lawrence College “incident to status” – no written authorization is required.

Form W-4 (Withholding Allowance Certificate)

If you received wages during the year in question (compensation for teaching, research, or other employment), you were required to complete a Form W-4. Because the instructions on the W-4 apply ONLY to US citizens, you should have used the following instructions:

• On line 3: Check only “Single” status (regardless of actual marital status).
• On line 5: Claim only one deduction allowance, unless you are a resident of Canada, Mexico, Japan, Korea, a US national (US Virgin Islands, American Samoa, or the Northern Marianas Islands), or a student from India.
• On line 6: Request that your employer withhold an additional $15.30 per two-week pay period.
• On line 7: Do not claim “Exempt” withholding status.

Form 8233 (Exemption from Withholding on Compensation for Independent Personal Services of a Non-resident Alien Individual)

If a tax treaty between the USA, and your home country, provides an exemption for withholding from your wages, you should have notified the payer of the income to claim the benefits of the treaty. You should have been asked to complete the Foreign Information Collection Form and Form 8233, and to have your supervisor submit it to the Payroll, and Financial Aid Offices. You must submit these two forms to the same Department every year that you continue to work for the College. Consult IRS Publication 901: US Tax Treaties and Publication 519: US Tax Guide for Aliens (Appendix A – for students or Appendix B – for professors and scholars).

Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding)

You should have submitted this form to your bank. When opening a bank account, provide your passport, and SSN or ITIN, to a bank representative, and ask to fill out this form. You should also use the W-8BEN to claim a tax treaty benefit from Sarah Lawrence BEFORE receiving payments from a scholarship or fellowship.