Income Tax Information

Deadline

April 15th is the annual deadline to file income tax returns in the United States. On that date taxes are reported for the previous calendar year (January 1st through December 31st).

Two Tax Systems

Please determine which one you are before filing your Federal and State taxes.

  • U.S. Resident: resident aliens, legal permanent residents, and U.S. Citizens.
  • Nonresident Alien: people who are in the U.S. for a specific purpose and here for a limited amount of time.

Note: Residency for tax purposes is different from residency for immigration purposes. Residency for tax purposes determines how you are taxed.  This will not affect your ability to stay in the U.S., or affect any activities you can do while you are in the U.S.

Two Tests for Tax Residency

  • Green Card Test
    • If you have a Legal Permanent Residence Card, you are a U.S. resident for tax purposes.
  • Substantial Presence Test (SPT):
    • Add:
      • All days present in U.S. this year PLUS
      • All days present in U.S. last year TIMES 1/3 PLUS
      • All days present in U.S. two years ago TIMES 1/6
    • If the sum is 183 or greater and you are present in the U.S. for at least 31 days this year, you are a U.S. resident for tax purposes.
    • Otherwise, you are a nonresident alien for tax purposes.
    • Common Exception to SPT - Students:
      • If you are a student with F, J, Q, or M immigration status, count each day as "zero" if you have been in the U.S. for no more than five years.
      • This applies to both F-1 students and F-2 dependents and spouses of students.
      • The five years do not need to be consecutive.

Example: You were physically present in the United States on 120 days in each of the years 2007, 2008, and 2009. To determine if you meet the substantial presence test for 2009, count the full 120 days of presence in 2009, 40 days in 2008 (1/3 of 120), and 20 days in 2007 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2009.

Substantial Presence Test: www.irs.gov/businesses/small/international/article/0,,id=96352,00.html

Common Types of Income

  • Wages earned on a job
    • Receive form W-2 from your employer
  • Interest earned from a bank account
    • Receive form 1099-INT if you earned at least $10 in interests income
  • Scholarships that pay housing, room & board, or consist of cash prizes
    • May receive form 1042-S

Sources of Tax

  • Nonresident aliens are taxed only on U.S.-source income
    • Wages earned in the U.S
    • Taxable scholarships grants received in the U.S. from a U.S. entity
    • Payments for services performed in the U.S. by a U.S. entity
  • Resident aliens are taxed on all income, regardless of source

Taxpayer Identification Numbers

  • A tax ID is either:
    • Individual Taxpayer Identification Number (ITIN)
    • Social Security Number (takes precedence over the ITIN)
  • A tax ID is nine digits in this format: 
    • nnn-nn-nnnn
  • If you do not have a tax ID, file a Form W-7 attached to your tax return.
    • Exception: if you only file an 8843, then the W-7 is not required.

Forms

There are two separate filings: Federal and State. Please make sure you file the correct forms to each place.

Forms for Nonresident Aliens:

Federal Taxes:

IRS forms:  www.irs.gov/businesses/small/international/article/0,,id=129394,00.html

  • Form 8843 – Must be filed by ALL international students present in United States to exclude the days of presence from the Substantial Presence Test. Complete just Parts I and III.
    Important note: must file this form even if you did not work.
  • Form 1040NR-EZ or 1040NR– Must be filed by all international students who have received any type of U.S. income other than interest received from U.S. banks and credit unions.
    Instructions for Form 1040NR-EZ: www.irs.gov/instructions/i1040nre/ch02.html

Note: Cannot use e-file (electronic filing)

State Taxes:

California Franchise Tax Board Forms: www.ftb.ca.gov/forms/search/index.aspx

  • Form 540NR (long or short)
    • It helps if the 1040NR is completed before working on the 540NR.
    • Forms are also due on April 15th.

Forms for U.S. Resident:

Federal Taxes:

IRS forms: www.irs.gov/formspubs

  • Form 1040EZ, 1040A, or 1040
    • 8843 is NOT required
    • E-filing is an option
    • Standard deduction vs. itemized
      • Take which type is the highest in dollar amount

State Taxes:

California Franchise Tax Board Forms: www.ftb.ca.gov/forms/search/index.aspx

  • Form 5402EZ, 540A, or 540
    • It helps if the 1040 is completed before working on the 540.
    • Forms are also due on April 15

You do not have to file 1040 when...

  • Your only U.S. income consists of payments of personal services, including wages, and the total for 2010 is less than $3,600. (Please check correct amount for each year)
  • You are a student, teacher, or trainee; your immigration status is either F, J, M, or Q and you have none of the following:
    (Generally)
    • Wages
    • Taxable interest or dividends
    • Capital gains and losses
    • Rental income
    • And a host of others (unemployment, gambling winnings, royalties, etc)

Social Security and Medicare Taxes

Certain employees may not be subject to FICA (Social Security tax) when employed.  To qualify for a FICA exemption, the individual must meet the criteria set in either IRC Section 3121(b)(10) or 3121(b)(10).

IRC Section 3121(b)(10):  A student who works for a school at which he or she is enrolled and regularly attends classes is exempt from FICA tax.  This section applies to both nonresident aliens and U.S. residents for income tax purposes. 

IRC Section 3121(b)(19): The individual has to be a nonresident alien for tax purposes, present under the United States under an F, J, M, or Q immigration status.  The services must be performed in accordance to the purpose of the visa holder.

How to get a Refund of Taxes Withheld in Error

The first step is to attempt to get a refund of FICA from your employer.  If you are unable to get the tax refunded, follow these steps as prescribed by IRS Publication 519:

  1. Complete IRS Form 843
  2. Attach the following:
    • Copy of the W-2
    • Copy of the visa
    • For F-1 students, a copy of the Form I-20 (and EAD if the student is on practical training).  For J-1 visa holders, a copy of DS-2019.
    • IRS Form 8316 (consult IRS Publication 519 for alternative ways of meeting this requirement)
  3. Send the 843 and attachments to Department of Treasury, Internal Revenue Service Center, Philadelphia, PA 19255.

Workshops

The International Center will conduct an income tax presentation for international students prior to the April 15th filing date. See calendar for dates.

Note: The university cannot be anyone’s tax adviser or provide legal advice.

Other Resources

 

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