Federal tax law requires all students in F or J visa to file a Form 8843 every year you are inside the United States, even if you did not earn any United States income. If you earn income during your stay in New York City, there are four different types of tax with which you must be concerned: United States federal income tax, social security (FICA) and New York state and New York City income tax.
The University does not provide tax advising to American students or staff; nor can it offer detailed advice or assistance to foreign nationals enrolled or employed at Fordham. The following is intended to give you a general sense of your obligations under the law and is subject to change without warning.
Every year the OIS purchases a non-immigrant tax preparation software program (GLACIER Tax Prep) that could be used to fill out your Federal tax returns. The individual codes will be emailed to all current students and those on OPT in mid-February.
Please also visit the University of Buffalo's OIS site for Online Tax Workshops and handouts regarding taxes.
I DID NOT EARN INCOME, WHAT DO I DO?
Sumbit ONLY Form 8843. The two-page form and instructions can be found here. GLACIER can be used to help with this form, but it is not necessary.
I DID EARN INCOME, WHAT DOES IT ALL MEAN AND WHAT DO I DO?
Federal Income Tax
Collection of Federal Income Tax in the United States is the responsibility of the United States Internal Revenue Service (IRS). Foreign Students in the United States are subject to federal income taxation on any wages earned in the United States.The following is a summary of United States government requirements; for more detailed information regarding your tax obligations, obtain publications 519 (United States Tax Guide for Aliens), 520 (Scholarships and Fellowships), and 901 (Tax Treaties). The federal tax obligations of foreign nationals are determined by several factors: immigration status, length of residence in the United States, purpose for being in the country, intent to return to the home country or to remain for an extended period in the United States, country of citizenship, and type of income. Different combinations of these factors result in different tax obligations.The first consideration is one’s status as a resident or nonresident for tax purposes. In general, the following guidelines apply:
F-1 and J-1 students are considered nonresidents for tax purposes during their first five calendar years of study. A calendar year runs from January 1 to December 31. Therefore, if you arrive in the U.S. on December 15th you would be considered by IRS to have been in the U.S. for that calendar year. After five years, students are presumed to be residents for tax filing purposes and must justify continued filing as nonresidents to the IRS. Individuals in J-1 status other than students in degree-granting programs, i.e., scholars, faculty, and researchers, are considered non-residents for tax purposes for the first two calendar years in the United States. All other non-immigrant visa holders who reside in the United States for more than 183 days in the tax year (calendar year) are presumed to be residents for tax purposes. Permanent residents are residents for tax purposes.
Taxable Income: Assistantships, Fellowships, and Scholarships
All students must pay taxes on teaching, graduate and research assistantships. (Assistantships are not scholarships or fellowships - see below). No portion of the stipend paid is excluded from taxation. Foreign students must have taxes withheld from their paychecks and must file a tax return between January 1 and April 15 of the following year to recover any amounts withheld in excess of taxes owed. Students covered by a tax treaty will receive a refund of taxes withheld on the amount of income which is exempt from taxation under the terms of the treaty. (See below “Filing Tax Returns and Obtaining Refunds” and “Tax Treaties”.)
Students who are degree candidates at qualified educational institutions do not pay tax on amounts received as a scholarship or fellowship grants which cover tuition and education-related expenses such as required university fees, text books, supplies and equipment. Expenses for room and board and other personal items are not considered educational expenses for the purpose of determining tax liability. Students who are not degree candidates must pay income tax on the entire amount of their fellowship award.Although tax is not withheld from fellowships of residents for tax purposes, it may be withheld from those of nonresidents.
The United States has tax treaties with 36 countries. Although there are certain basic similarities among them, the treaties vary significantly in terms of the benefits they offer to students, in terms of the types of income covered, the total amount of the exemption and the number of years one can claim the benefit. Although some treaties exempt 100 percent of some types of income, most treaties exempt only a portion of students’ earnings, including assistantships. The university withholds tax on your earnings unless you make a claim for exemption by treaty.
Countries with which the United States has tax treaties which exempt some types of income earned by students in the United States are listed below. These and other treaties may exempt income earned from outside the United States, such as scholarships paid by the home country. Please note that tax treaties may change. For additional information on tax treaties see IRS publication 901. For more information go to: www.irs.gov.The existence of a tax treaty with your country does not automatically mean you do not have to pay taxes.
Claiming Exemption from Taxes Based on a Tax Treaty
Everyone earning income in the United States is required to complete and file a W-4 Form; however, tax treaty benefits are not claimed on the W-4 Form itself. Individuals who are sure they are eligible for treaty benefits must submit to the payroll office Form 8233 filled in duplicate. Individuals are responsible for their own tax decisions. They are also responsible for notifying the payroll office when their tax treaty benefit ends.
If you are unsure as to whether you are eligible for tax treaty benefits, you may consult with a tax attorney for advice, or you may do the following: do not claim exemption from withholding; the payroll office will withhold your tax, and when you file your tax returnrequest a refund, based on the treaty, of all taxes withheld. If the IRS determines you are ineligible for treaty benefits, your withheld taxes will not be returned, but you will not have to pay the penalty.
For comprehensive and current information on tax treaties you should obtain the full text of the treaties which is available in local libraries and the OIS. The OIS staff cannot interpret the treaties for you; for a full analysis you must consult a tax accountant.
Filing Tax Returns and Obtaining Refunds
Federal tax law requires all students in F or J visa to file a tax return every year you are inside the United States, even if you did not earn any United States income.Individuals who have income from a source in the United States (e.g., foreign students who have assistantships, fellowships, on or off-campus jobs) must file their tax return typically by April 15 for the preceding tax year. Individuals who did not have any income inside the United States have a filing deadline of June 15. OIS provides GLACIER Tax Prep, an online program that helps you prepare your U.S. income tax return. This info is emailed to current students in mid-Feb.
In many cases, taxpayers are due a refund because more money was withheld from their pay than they owe in taxes. If a refund is due, a check is sent several months after the tax return is filed. In some cases, more tax may be due; in this case the taxpayer must send the IRS a check for the tax due with the return by the April 15 deadline.
It is not possible to receive a refund of money withheld without filing a return. Individuals who have earned income in the United States and who fail to file an income tax return may later be required to pay fines, penalties, and interest charges in addition to any taxes owed.
New York State/New York City Income Taxes
If you owe federal income tax, you also owe New York State and City income tax. If you live in New York, you file as a resident, if you live in New Jersey or Connecticut,you file as a nonresident of New York. New York State and New York City tax returns are filed between January 1 and April 15 for the previous calendar year. Click here for information on forms and publications for New York.
Because the United States requires employers to withhold tax on wages earned by employees, all employees must fill out a W-4 Form before going on a payroll. Based on projected earnings and the numbers of allowable exemptions, this form determines the amount of money withheld from one’spay for the Internal Revenue Service and the New
York State Division of taxation. Except for citizens of Canada, Mexico, Japan, and South Korea, nonresidentsfor tax purposes may claim only one personal allowance (item 4) regardless of the number of accompanying dependents. Unless your total earnings for the tax year will not exceed the amount you deduct for your withholding allowance and you owed no United States tax in the prior year, you may not claim exemption from withholding on the W-4. No one may use the W-4 to make a claim to exemption from withholding based on a tax treaty; see “Tax Treaties.”
Tax payers must have withheld, or make quarterly estimated payments in, an amount equal to 90 percent of their estimated current year’s tax or 100 percent of their prior year’s liability, whichever is less. United States law allows substantial penalties for withholding of federal taxes. It is better to have the money withheld and get it back in the next year when you file your tax return than to risk having to pay the tax, plus interest, plus the penalty if you make a mistake.
W-2 and 1042-S Forms
In January, everyone who was on a payroll during the previous year receives a W-2 Form, a statement of the amount of money withheld from total earnings for federal tax, social security taxes (FICA), and state/city taxes. The form is issued by every employerfor whom you worked. Each W-2 has three or four identical pages, one to be submitted to the IRS with the federal tax return, one to be submitted to the state with the state tax return, one to be retained for your personal records, and in some jurisdictions, one to be submitted to the municipality with the city tax return.
Nonresident recipients of fellowships receive a 1042-S statement of income rather than a W-2. A portion of the income reported on the 1042-S is subject to federal and state taxes. The portion of the income which is taxed depends on your education-related expenses and whether or not you are covered by a tax treaty. See Publications 519, 520, and 901.
It does not represent permission to work. It is not proof of United States citizenship or permanent residence. If you are paid in the United States, you must have aSS# to file a United States income tax return. If you are not paid in the United States but are in a visa status which permits certain types of employment (e.g., F-1 PT, J-1, J-2 with EAD), you may find it useful to obtain a SS#, even though it is not required for tax purposes. Once you obtain a SS#, it is your number forever and may be used on subsequent visits to the United States.