International students who work in the U.S. may be required to pay income taxes on all or part of their earnings (including tuition remission). Although the ISO does not offer advice or assistance with specific tax matters, the following general information may be of help:
- The U.S. agency responsible for the collection of taxes is called the Internal Revenue Service (IRS).
- Any student who was present in the U.S. for any part of the previous tax year (calendar year) must file IRS form 8843, whether or not he or she had income.
- You must also file IRS form 1040 NR or 1040 NR-EZ in addition to Form 8843 if you had U.S. earned income (or tuition remission in exchange for services as a teaching or research assistant) in excess of $3,300, had wages or scholarship income exempt by treaty, or are due a refund of taxes.
- Students employed in the U.S. are subject to income tax withholding. That is, the employer deducts some of your wages each pay period to pay any income tax you may owe to federal (U.S.), state, and local governments.
- When you are first hired, your employer will require you to fill out form W4. This form allows your employer to withhold the correct amount from each of your paychecks. Sample W4s for federal, state and local withholding are available at the ISO.
- After the end of the tax year, your employer will send you a form W2. This form reports to both you and the government how much money has been withheld to pay your taxes. You must submit this form when you file your income taxes (due April 15). When you have figured how much tax you owe, you will compare this amount to the amount on the W2. If your employer has withheld more than the amount of the tax that you owe, the government will refund the additional amount to you. If you owe more money than your employer has withheld, you will be required to pay the additional money to the IRS when you file your taxes.
- In some cases there is a tax treaty between the student's country and the U.S. which makes all or part of the student's wages exempt from taxes. Students should check IRS publication 901 (U.S. Tax Treaties) to find out if they are exempt from taxation and withholding under a treaty. If a student claims to be exempt under a treaty, he must file IRS form 8233 with his employer.
At tax filing time, forms are available at the UDM library. In addition, you can obtain information and download IRS forms and publications at any time of the year from the IRS website: www.irs.gov.
Although ISO staff members are not qualified to offer advice or assist you in filing your income tax return, we can confidently refer you to a web site created by the University of Texas at Austin that can guide you through the federal tax filing process: http://www.utexas.edu/international/taxes/. For problems that cannot be resolved through this resource, please consult a tax preparation service or a tax attorney or visit the IRS web site for instructions on how to obtain information on federal tax filing from the IRS.
Social Security Taxes
Most U.S. workers are required to pay Social Security and Medicare taxes. These taxes provide income and medical care benefits to retired workers who have paid into the fund. These taxes, like income taxes, are withheld from employees' wages each pay period. However, students in F-1 and J-1 status who have been in the U.S. for less than five years do not have to pay Social Security taxes and should not have these taxes withheld from their paychecks. Since not all U.S. employers are aware of these regulations, you should make sure when you are first hired that your employer is informed of them. The ISO has printed information packets available which students may present to their employers. Should your employer withhold Social Security taxes, you can receive a full refund, either from the employer or the government. Consult IRS publication 519 for more detailed information.