If you are considering studying in the United States, you may be asking yourself: do international students pay taxes? Filing taxes as an international student is required for all F-1 visa holders, even if you decide not to work while pursuing your education. Don’t let questions about Social Security numbers and tax forms intimidate you. It’s easy to file your F-1 student tax return with a little bit of prep work. Read on to learn more about tax filing for international students, including which forms you will need and available resources that can help you with the process.
Editor’s Note: This article is meant as an overview and is not a substitute for tax or legal advice from a professional. Students should reach out to a tax professional or the relevant resources provided by their university with specific questions that relate to their tax status or any other personal tax or legal matter.
Overview of the American Tax System
Most people with earned income in the United States pay taxes on each paycheck they receive, F-1 students included. Do students have to file a tax return? Yes, if they earn money in several ways (outlined below). Taxable income can include everything from salaries to specific gifts and awards. Those taxes go to the federal government’s Internal Revenue Service (IRS), as well as the department of revenue for the state where you earned your money.
Here is a short summary of how the US tax system works:
If you earn money in the United States, you must pay a certain percentage of that money in taxes.
You pay taxes to the federal government, and you pay taxes to the state government in the state in which you reside. Tax returns detailing your income are usually due in April each year.
After you file your tax returns, the revenue departments at each level reconcile the amount of income taxes you owe against the amount you have already paid throughout the year.
If you have paid more taxes than you owe, you are eligible for a refund. If you have paid less money in taxes than you owe, you are responsible to pay the difference.
Do International Students Have to File a Tax Return?
Yes. According to the Internal Revenue Service (IRS), all international students and scholars on F or J visas must file Form 8843, even if they do not earn an income while studying in the United States.
According to the IRS, Form 8843 is used by “alien individuals” to explain the basis of [a] claim that [one] can exclude days present in the United States for purposes of the substantial presence test because [they] were:
An exempt individual
Unable to leave the United States because of a medical condition or medical problem
If the above explanation sounds confusing, think of Form 8843 as a declaration of the time you were studying and not working in the United States. If you still have questions, first try this tutorial provided by the IRS, then reach out to Shorelight for further student visa support.
While you may not owe taxes if you did not make money, you still have to return the tax form for international students. Failure to complete this form may result in visa processing delays and other international documentation issues.
Do international students pay taxes if they are working or interning? Yes, students who hold employment or internships through Optional Practical Training (OPT) most likely also fill out a W-4, especially if they are also getting paid. A W-4 is the tax form new employees fill out when they are first hired at a company, nonprofit organization, government agency, or other institution in the United States. At the end of the year, non-resident income earners turn in their Form 1040-NR when filing their tax returns.
Income can come in many forms, including:
Wages and compensation
Some scholarships/fellowship grants
If you received any of the above from an internship or Curricular Practical Training (CPT) position, you would likely have to declare your compensation on your tax return. (Do not let this deter you from pursuing internships, CPT, OPT, or other career development programs and opportunities!)
CPT is an excellent option for students currently in the process of earning a degree. While pre-completion OPT is available, OPT is better known for post-graduate opportunities in the United States and even offers a 24-month STEM extension to continue working and earning in the US. Learning how to apply for OPT and CPT status and considering professional experience opportunities in the United States can help you get noticed later when it’s time to start a career.
Do I Have to Pay Taxes on Income I Received from my Home Country?
Do international students have to file a tax return for income they earned back home? Generally speaking, non-resident aliens who file the proper paperwork and have legal status in the United States as students on F-1 visas do not have to declare and will not be taxed on international income sources.
Does it Cost Anything to File My Tax Return?
If you prepare and file your taxes yourself, it is free. However, if you don’t feel comfortable doing it yourself, several affordable services will help you complete your tax return for a fee. Before you agree to pay for any assistance, make sure you check with your advisors to see if there are any free resources available on campus first. Talking to an advisor can also direct you to reputable services as well — fees for non-resident tax return filing online range from USD$15-$70, depending on the requirements.
How Do I Know if I’m a Non-resident for Tax Purposes?
The best way to determine if you are a non-resident in the United States for tax purposes is to follow the guidelines set forth by the IRS. According to the IRS, you are considered a non-resident of the United States for US tax purposes unless you satisfy the qualifications of either the green card test or the substantial presence test.
There are exceptions to the rules as well, according to the IRS, and – to make it even more confusing – you can be both a non-resident and a resident for US tax purposes within the same year, which requires a dual-status income tax return. Some of the IRS-approved exceptions include the following:
If you are unclear about your residency status for tax purposes because of one of the above reasons, it is best to reach out to visa assistance services or a tax professional.
How Do I Know if I Made US Income?
Sourcing your income is important and can save you from unnecessary tariffs or taxes on your money. A US citizen is subject to worldwide taxation, no matter where that money came from; however, a citizen of a different country only has to pay US taxes on income from sources within the United States.
To determine where you made your income and if you are subject to US taxes, it’s important to consider the same factors determining the source of income that the US government uses to ensure compliance. For the most part, however, the important things to remember deal with location:
Where did you perform the services for which you were paid?
Where is your residence?
Where is the address of the payer of a scholarship, grant, or fellowship?
What Information Do I Need Before I Prepare My Tax Return?
If you decide to prepare your tax return, you will need some basic information to get started. The first question to ask is whether you worked and earned a taxable income. If the answer is no, you will need, at the minimum, your Form 8843.
In addition, you will also need an Individual Taxable Identification Number (ITIN) or a Social Security number. Nonresidents receive a specific Social Security number and card that comes with the following restriction: “VALID FOR WORK ONLY WITH DHS AUTHORIZATION.”
If you worked in the United States and collected an income, you probably already filled out your 1040-NR. Your employer, or whomever you collect an income from, will mail you a W-2 form, which documents your earned income from the perspective of the person or entity paying you. You should receive your W-2 before the beginning of February. Note: depending on the type of employment, you may receive a 1099 for contract work or a 1042-S for income that falls under tax treaty benefits.
Can I Claim a Tax Treaty Benefit?
Can international students get tax refunded to them in the United States? Yes, and one reason may be a tax treaty rule between your home country and the US. There are very specific rules governing tax treaties between the US and other countries. Make sure you understand the laws governing your situation if you plan to file for reduced or refunded taxes based on a treaty.
Here is a list of high-level requirements for pursuing tax treaty benefits. Remember, your country of origin must share tax treaty status with the US for you to qualify, even if you meet the following requirements:
You earned money while working
You are a non-resident alien for taxes
You have a valid F, J, or H-1B visa
The following countries share tax treaties with the United States:
If you are eligible for tax reduction, credit, or exemption under tax treaty regulations, you are required to fill out a Form W8-BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) to your employer.
What Forms Do I Have to Fill Out?
If you are an international student on an F-1 visa with no US-based income, you may only have to fill out your Form 8843. If you are an international student with pay, you probably already filled out your W-4, or 1099, when you started your position. If you did not fill out one of these forms, be sure to check with your employer to see why.
Before you file your taxes, you will also need to fill out a 1040-NR, in which you detail to the IRS exactly how much you owe and how much you should be refunded or credited. Here is a list of other forms you may need:
1040-NR: If you received income from a US-based university, business, or individual, you will receive your 1040-NR in the mail and will need to file with your taxes.
1040-S: If you are a student on scholarship, you will receive a 1040-S from your university and must file with your taxes.
W-7: If you need an ITIN or need to extend or renew your ITIN, you will need to file a Form W-7 application for IRS individual taxpayer identification number.
W8-BEN: You will fill this form out if subject to tax treaty benefits. Generally, you will give this form to your employer on or around when you start your job and turn in your W-4 or 1099.
Form 8233: Do you qualify for tax treaty benefits and plan to claim them? You may need a Form 8233, exemption from withholding compensation for independent (and specific dependent) personal services of a non-resident alien individual.
How Do I File a Tax Return?
Filing tax returns is the same for everyone and you have a few options. First, you can work with a tax professional who can determine the correct paperwork for your situation, help you fill out the documentation, or even fill it out for you, and mail it to the IRS before the mid-April deadline.
However, working with a professional may be outside of your budget, in which case, you can either receive help online, on campus, or file yourself. Either way, the IRS provides resource materials and detailed instructions that can make this process easier.
First, you have to determine which forms you need. Then you can fill them out and send them to the IRS. Don’t forget most states require you to pay state taxes as well. Make sure to find the appropriate paperwork for the state you live in from the state revenue department.
To get started, consider the following questions:
Where am I from, and where do I reside?
Did I make any money while studying in the United States?
Do I have or do I need an ITIN or Social Security number?
Once you finish filling out your paperwork, mail it and any outstanding tax payments to the addresses supplied on the forms. Make sure you submit all forms and payments before the deadline.
How Much Does it Cost?
Filing your taxes is free if you do it yourself. You may also be able to take advantage of free or reduced-cost services on your campus. If you work with a tax professional, they will charge a fee (typically based on the complexity of your returns and/or the amount of hours they work for you).
When Do I Need to File By?
Taxes are due every year in April. The deadline for filing your taxes in 2022 for the 2022 calendar year is Tuesday, April 18, 2023.
When Should I Expect My US Tax Return?
The earlier you file your taxes, the sooner you will get your US tax refund back (if you are eligible for a refund). According to the IRS, most basic tax refunds are sent back in approximately three weeks. As of January 23, 2023, you can begin filling your taxes for 2022.
Have More Questions about Filing Your US Tax Return as an International Student?
If you are looking for more information about filing your US tax return as an international student, a Shorelight advisor can point you to additional resources or help you find a tax professional to address your personal tax needs. You can also reach out to your university campus advisors and speak with other international students who have already completed the process.
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