Income Tax Filing Information for International Students and Scholars at Rutgers University Newark

During the course of a calendar year, employers are required to withhold estimated taxes from their employees' paychecks and give those estimated withholding dollars to the IRS. Sometime between January 1 and April 15 of the following year, every individual is required to file a tax return with the IRS; the tax return compares the estimated amount withheld by the employer against the actual amount of tax owed. If an employer withheld more in estimated taxes than what the employee actually owes, the employee will get a tax refund. If the employer withheld too little, the employee will need to pay additional taxes. 

Employers are required to have all employees complete and submit a Form W 4 when they start working. The way the employee completes the form will determine how much the employer will withhold on an estimated basis. Nonresident taxpayers do not have many choices in completing Form W-4, however. The way a nonresident completes Form W-4 must comply with revenue codes that are different from the printed instructions on the Form W-4 itself. (Be careful: although the instructions on the W-4 do not specify this, the printed instructions on the W-4 form apply to resident taxpayers only!) IRS Publication 519 explains more about estimated withholding and the Form W-4 for nonresident taxpayers. 

Not necessarily. Although certain countries have tax treaties with the U.S., the existence of a tax treaty with your country does not automatically exempt you from paying U.S. taxes. A treaty might provide a tax exemption for research scholars from a certain country, but not for students from that country; or it might provide a full exemption for students with fellowships but only a partial exemption for students with assistantships. Some treaties that might have exempted you last year might not exempt you this year. IRS Publication 901 provides a list of treaties and their specific provisions, but interpreting treaties is a complex matter, and no one at Rutgers University is qualified to interpret treaties for you.

Treaties will sometimes allow for partial or even full exemption from paying federal taxes, and in some cases will even permit you to request your employer not to withhold your taxes, but unless you are absolutely certain that a particular treaty applies to you, you are safer to let your employer withhold your taxes at the non-treaty rate, and then when filing your tax return the following year, to make your treaty claim directly to the IRS. At that time, if you are eligible for the treaty benefit the IRS will give you a refund. But if you have asked your employer not to withhold because you thought a treaty applied to you, and then it turns out that you are NOT eligible to claim the treaty, you will have to pay a penalty to the IRS. If you are certain that a tax treaty exemption is available to you, and if you hold a job at Rutgers that comes with benefits (for example, a post doc position, or a TA or GA), you must file duplicate originals of Form 8843 with the Payroll Office along with duplicate copies of a statement for the specific section of your country's treaty that you believe applies to you. 

If you believe you are eligible to claim a treaty, but your employment at Rutgers is not one with benefits, Rutgers will withhold your estimated taxes at a non-treaty rate and you will have to make your treaty claim directly to the IRS with Form 8843 and the required statement. 

Federal law requires you to file tax returns; if you fail to do so, you are out of compliance with the law, which can result in serious legal difficulties with both the IRS and USCIS. Remember, if you earned income in the U.S., your employer has already turned over your withholding dollars to the IRS, so the IRS already knows you had income. 

The Substantial Presence Test is a formula the IRS uses to determine when a nonimmigrant visa holder becomes a resident for tax purposes. J-1 researchers and scholars are subject to the substantial presence test after two years, and F-1 and J-1 students after five years. 

This is a point of great confusion resulting from the IRS's use of the word "exempt" to have different meanings in different contexts. An "exempt individual" in the context of the Substantial Presence Test only means that the person does not need to use the Substantial Presence Test to determine his or her tax status, i.e., she or he is "exempt from using the Substantial Presence Test". This does NOT mean the person is exempt from filing tax forms and/or exempt from paying taxes, however.

The obligation to pay Social Security (FICA) tax correlates directly with whether you are a resident or nonresident for federal tax purposes. If you are a nonresident F-1 or J-1 for federal tax purposes, you do not have to pay FICA. Employers should not withhold FICA taxes from your paycheck if you are not required to pay this tax. Once you become a resident taxpayer, however, your obligation to pay FICA taxes begins, and your employer must begin to withhold for FICA as well. 

You can try to get a refund from your employer. (Show your employer IRS Publication 515 if they do not know the regulations.) If your employer will not give you a refund on erroneous FICA withholding, you can file IRS Form 843 directly with the IRS and request a refund on your FICA withholding. 

Everyone who files a tax return must have a Form W-2 from your employer OR a Form 1042-S (for students with fellowships or scholarships), or both. The W 2 is the legal document showing how much you earned and, of that, how much tax actually was withheld. The 1042-S is the legal document showing the dollar amount of your fellowship or scholarship, and other information required for tax filing. Your employer or fellowship granting organization is required by law to provide you with your W-2 and/or 1042-S. If you have not received your W-2 and/or 1042-S by early to mid-February, tell your department or contact the Office of Payroll. 

In addition, when you sit down to do your tax forms, you should also have the following items:  

• your I-94 
• your passport 
• your Form I-20 (for F-1s) or your Form DS-2019 (for J-1s) 
• your social security number (or, alternatively, your ITIN )            
• your current U.S. address 
• your permanent foreign address 
• address of academic institution or visa sponsor 
• any fellowship or scholarship grant letters you have received from your academic institution or sponsor 

Although you do NOT need to file a 1040NR, all F-1 and J-1 students and scholars and all F-2 and J-2 dependents are required to file Form 8843 with the IRS, even if you had no income in the U.S., by June 15. 

Yes, but only the stipend is taxable income; the tuition remission part of your assistantship is not taxable for federal tax purposes, though it may be for state tax purposes. 

Phone: 1 800 829 1040 [information]  

Phone: 1 800 829 3676 [forms and publications]  

Website: www.irs.gov