General Overview of Tax Regulations for Nonresident Aliens
(F and J Students/Scholars)
The information on this page is only to be used as a source of referential information. Tax laws change and different situations apply to different individuals. If you are unsure of how to complete your tax forms, you should consult a professional who is familiar with US tax laws and with non-resident taxes. The Wake Forest Center for Global Programs and Studies cannot be held responsible for any errant or outdated information that may be contained within this web page. To check for updated information, please refer to the following website: Internal Revenue Service (International Taxpayers)
Please also note: It is STRONGLY encouraged that you use the Glacier NRA tax software which the University supports. Wake Forest tax staff will assist you with any IRS notices if and only if you use the Glacier Software and keep a copy of the tax report you mailed to the IRS.
Form 8843: Statement for Exempt Individuals and Individuals With a Medical Condition
Form 8843 provides all F and J students/scholars with an exemption for the number of days spent in the U.S. If this form is not filed and you are a student who is currently studying in the US on an F-1 or J-1 visa, you will be responsible for paying taxes on your worldwide income (US income plus any income that was earned in your country of permanent residence) and you will not be eligible to take advantage of any treaty provisions that presently exist between your home country and the US
II. Who Should File?
If you were a student/scholar or the dependent of a student/scholar who entered the U.S. in F-1, F-2, J-1or J-2 nonimmigrant status and were present in the US for any length of time for the 2013 tax year, then you will need to file form 8843. As a nonresident alien residing in the US in F-1, F-2, J-1, J-2 student/dependent status, you are required to file this form regardless of whether or not you had any earned income during the tax year. You will also need to complete the form if you are filing a separate tax return. Form 8843 may be submitted with your other tax form(s).
If you arrived in the US on or after January 1, 2014 for the first time, you are not required to file form 8843 for the 2013 tax year.
III. Spouses and Dependents
All spouses and dependents of F-1 and J-1 students/scholars currently residing in the US with the principle visa holder are required to complete form 8843. If your child is too young to sign the form, you may sign on his/her behalf. The form should be signed in the following manner for a minor who is unable to write his/her name:
|Father or Mother’s Signature||For||Child’s Name (Age of Child)|
|(Father or Mother’s Printed Name)||(Child’s Printed Name)|
|(Relationship to Child)||(Son or Daughter)|
If your spouse or child does not have a social security number and you are eligible to claim them as dependents on your tax form, they will need to apply for a Tax Identification Number (TIN). Form W-7 is used for this purpose. The completed form should be submitted to the IRS office located in Winston-Salem. The address of the office is as follows:
251 North Main St. (Federal Court Building)
For verification of identity, the applicant will need to present a copy of his/her passport when submitting the W-7 form. New rules now dictate that a completed tax form (i.e. 1040NREZ) must be submitted with the application for the TIN. For more information on the TIN, please inquire at the Center for Global Programs and Studies or go to www.irs.gov. The IRS will only issue a TIN to a nonresident/nonimmigrant for tax-related purposes.
IV. Filing Retroactively
If you were unaware of the fact that you were required to submit Form 8843 for previous tax years in which you resided in the U.S. in F or J student/scholar status, you may file retroactively for each year the form was not filed. Simply include a separate Form 8843 for each year that was missed. When filing forms retroactively, cross out the year in the upper right hand corner and write in the year for which you are filing.
V. Completing the Form
F-1 and J-1 students/scholars and their spouses and dependents need only complete sections 1 and 3 of the form. See below for example. If you are filing form 8843 with another income tax form, it is not required that you complete the “Address” section of the form. If you are filing the form by itself, you will need to fill in the “Address” section.
VI. Where to Send the Form
All completed 8843 forms should be sent to the following address:
Internal Revenue Service
Austin, TX 73301-0215
(A street address is not necessary)
Form W-2/Form 1042-S
Some of you may have received what is called Form W-2 and/or Form 1042-S. Not EVERYONE will receive these forms (many in fact won’t if no U.S. based income was received in 2013).
You would have received these forms if any/all of the conditions listed below applied to you:
- You worked in some capacity and received wages in the U.S. during any point in 2013 (most times income derived from employment is marked on the Form W-2)
- You received a scholarship/grant that was above the amount of tuition and/or was used towards housing, health insurance, additional fees, etc. (most times this type of income is marked on the Form 1042-S)
Examples of what each of these forms look like can be downloaded to the right. If you received either or both of these forms, you will likely be required to file a federal and state tax form.
If either/all of the above conditions DID apply to you, and you did NOT receive a W-2 and/or 1042-S form, you must contact the payroll office at the institution from which you received your income from.
If you received your income/scholarship from Wake Forest University, you may contact the WFU Payroll Office (email@example.com) with your name, WFU ID number, and current local address, and they will re-send these documents to you.
Federal Tax Forms (1040NR-EZ, 1040NR, 1040, 1040EZ)
I. Who Should File?
This form should be used by all foreign students/scholars who are currently residing in the US in F-1 or J-1 status and had income of more than $3900.00 and less than $100,000 for the 2013 tax year.
You are not required to file for taxes if you earned less than $3900.00. That being said, if income was withheld for Federal and State taxes, it is encouraged to file taxes to potentially receive that withheld money back.
This form cannot be used by those who will be claiming dependents on their tax forms.The only students/scholars who are allowed to claim their spouse and dependents for US tax purposes are those whose permanent residency is listed as one of the following countries: Japan, South Korea, Mexico, Canada, and India. If you are a citizen or permanent resident of one of these countries and you will be claiming spouse or dependent deduction(s), you will need to file form 1040NR. A spouse or child cannot be claimed as a dependent unless they have a Tax Identification Number (TIN) at the time of filing.
GLACIER TAX PREP SOFTWARE
In order to ease the process of filing your federal tax returns, the Center for Global Programs and Studies has purchased codes from a company (Glacier Tax Prep – Arctic International) that will allow you to access their services. The company has created an intuitive online program that will figure out everything from your filing status (resident vs. non resident) to tax treaties you may be eligible for and even if you’re eligible to claim dependents or not. Based on your responses to a series of questions, it will fill in all the appropriate forms for you.
PLEASE NOTE: This software ONLY completes your federal taxes, it does NOT complete your state taxes. Moreover, the software simply helps you prepare the requisite forms, it does NOT automatically submit the forms to the IRS. You are still responsible for printing out the generated forms, signing them, and sending them to the appropriate address. An instruction sheet is automatically printed out with the generated forms. Follow the instructions on that sheet carefully to ensure you file your taxes properly.
These codes are available for purchase at a subsidized cost of $10.00. You can purchase these codes by visiting the Center for Global Programs and Studies in Reynolda Hall Room 116 on Wednesday February 19, 2014.
II. Provisions of Tax Treaties with the US
As a nonresident alien residing in the US in F-1 or J-1 status, you might be able to take advantage of a tax treaty provision between your home country and the US government. If your citizenship or permanent residency is listed as being in one of the countries below, you are able to exclude the entire amount of a fellowship, scholarship, or grant. This exclusion also includes any money that was received for the intended purpose of paying for room and board. If you are not from one of the listed countries, any money that you receive in a fellowship, scholarship, or grant that was specifically designated for room, board may be classified as taxable income. All F-1 and J-1 students/scholars currently residing in the US as nonresident aliens, regardless of country of citizenship, are allowed to exclude all money in a fellowship, scholarship or grant that is intended for the purpose of paying for tuition, books, and fees at a recognized institution of higher learning. Please keep in mind that these exclusions do not apply to any remuneration that was paid for services rendered (i.e. wages or salary). Any money that was a part of your fellowship, scholarship, or grant that was paid as wages for services rendered is classified as taxable income and will be so noted on the W-2 or 1042-S form that you receive from your employer.
DO NOT INCLUDE ANY MONEY FROM SCHOLARSHIPS/FELLOWSHIPS ON YOUR 1040NR-EZ FORM THAT IS NOT LISTED ON YOUR 1042-S FORM
List of Countries that May Exclude the Entire Amount of a Fellowship, Scholarship, or Grant (Including Room and Board):
Countries with Treaty Benefits For Scholarship or Fellowship Grant (Income Code 15)
|Country||Maximum Years In U.S.||Maximum Dollar Amounts||Treaty Article|
|China, People’s Republic of||No Limit||No Limit||20(b)|
|Commonwealth of Independent States*||5||Limited||VI(1)|
|Czech Republic||5||No Limit||21(1)|
|Germany||No Limit||No Limit||20(3)|
|Korea, South||5||No Limit||21(1)|
|Pakistan||No Limit||No Limit||XIII(1)|
|Slovak Republic||5||No Limit||21(1)|
|Trinidad and Tobago||5||No Limit||19(1)|
|* Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan.|
IIa. Two and Three Year Exemption for J-1 Teachers and Trainees
Many teachers and researchers residing in the U.S. in J-1 status are exempt for 2 or 3 years (depending on the treaty) from paying taxes on income that is earned from teaching or conducting research. In order to be eligible to receive this tax benefit, the nonimmigrant must meet the exemption guideline. A J-1 teacher or researcher who has been in the U.S. no more than 2 or 3 (depending on the treaty provision) out of the last 6 years meets the requirement. As with students, a J-1 teacher/researcher who has been in the U.S. for any part of a calendar year as an exempt individual must count that presence as a whole year for tax purposes.
(all examples are based on a filing for the 2013 tax year)
Dr. Lee, a J-1 research scholar from the Republic of Korea, arrived in the U.S. to work for a university laboratory on December 15, 2011. Even though he arrived in December of 2011, he would be considered as “temporarily exempt” for the whole 2011 calendar year. This means that he no longer qualifies for an exemption for the 2013 tax year because he has already met the two-year maximum stipulated by his country’s tax treaty (he was counted as being in the U.S. for 2011 and 2012). He would be treated as a “resident” for tax purposes in the 2013 tax year and would not be able to exempt income that he received as payment for his research activities.
WARNING: A J-1 teacher or trainee from Germany, India, Netherlands, Thailand, or the United Kingdom who exceeds the two-year maximum will lose all treaty benefits and will be responsible for paying taxes retroactively on any income that was previously exempted.
Dr. Clark is a J-1 professor from the United Kingdom who is currently teaching in the economics department of a university. He began his teaching duties in August of 2011. As per the treaty between the U.S. and the U.K., Dr. Clark was able to exclude all income that he received from his employment as a teacher for 2011 and 2012. Since he is filing for 2013 and he is still residing in the U.S. as a J-1 non-immigrant, Dr. Clark is no longer eligible to exclude any part of his income that was received from teaching, and, furthermore, he will now be responsible for paying taxes retroactively on all income that was excluded for 2011 and 2012.
Countries With Treaty Benefits for Income From Teaching or Research:
|Country||Max. Yrs. In U.S.||Amount||Treaty Article|
|Commonwealth of Independent States*||2||Unlimited||VI(1)|
|Trinidad and Tobago||2||Unlimited||18|
III. Income Exclusions for F1/J1 Students
If you are from one of the following countries, a certain part of your income (i.e. wages, salary, tips) may be excluded from taxes for a designated period of time while you are residing in the US in F-1 or J-1 student status. If you are in J-1 or F-1 student status for a period of time that exceeds that which is designated by the treaty, you are classified as a resident alien of the US by the IRS for tax purposes and are no longer eligible to receive the benefits outlined by the treaty. In addition, you will no longer be able to file a tax form designated specifically for nonresident aliens.
Special Provision for Residents of China
The tax treaty between the U.S. and China is very unique in that it allows a resident of China to continue to take full advantage of all treaty benefits as long as he/she is classified as a student. This even applies in the case where a Chinese resident becomes a permanent resident of the U.S. and files as a resident alien for tax purposes.
Countries With Treaty Benefits for Student Wages:
*A new treaty between the U.S. and Japan no longer allows a $2000 exemption for qualifying students who entered the U.S. after March 30, 2004. Those students from Japan who qualified for the exemption and were in the U.S. in F-1/J-1 student status prior to the March 30, 2004 deadline, can continue to take the $2,000 deduction.
|Country||No. of Years Treaty Can be Claimed||Amount of Income that May be Excluded
(should be noted on line 6 of Form 1040NR-EZ)
|Treaty Article Citation for Income|
|China (PRC)||No Limit||$5000||20(c)|
|Trinidad and Tobago||5||$2000||19(1)|
IV. Personal Exemption
All students, regardless of citizenship, are eligible to take a personal exemption of $3,900 on their 2013 tax return. This exemption should be noted on line 13 of form 1040NR-EZ (or line 40 of the 1040NR).
(Residents of Canada, Mexico, South Korea, Japan, and India may be eligible to claim exemptions for their spouse and dependents. The amount of the exemption for residents of South Korea and Japan will be determined by whether or not any income was earned in the home country in the 2012 tax year. Any income earned in the home country will be prorated and subtracted from the total amount of allowable exemptions. A formula for prorating home-based income can be found in the instruction booklet for form 1040NR. Citizens from India are only allowed to claim a child as a dependent if that child is a U.S. citizen or permanent resident. Furthermore, an Indian citizen may not claim a spouse as an exemption if that spouse had any earned income in the U.S.)
V. Filing Jointly
Most F-1 and J-1 students/scholars, regardless of marital status, will not be allowed to file a joint tax return with a spouse.
There are exceptions that allow residents of Canada, Mexico, Japan, South Korea, and India to take their spouse as an exemption if they meet certain requirements.
Also, those non-immigrants who are married to a U.S. citizen, legal permanent resident, or someone who has met the substantial presence test and is treated as a resident alien for tax purposes may be eligible to file a joint return.
Non-immigrants who claim a spouse as an exemption or a child as a dependent are required to fill out Form 1040NR.
VI. Special Itemized/Standard Deduction for Residents of India
If you are a resident of India currently studying in the US in F-1 or J-1 visa status, you are entitled to take the itemized/standard deduction of $6100.00 for the 2013 tax year. This deduction should be noted on line 11 of form 1040NR-EZ (or line 38 of the 1040NR).
VII. Interest and Dividend Income
International students/scholars on F-1 and J-1 visas are not required to pay taxes on interest income if that income is from a U.S. banking institution and cannot be categorized as being a significant financial gain. This exclusion provision also includes interest that is paid on certificates of deposit (CD) or money market accounts.
Non-immigrants are, however, responsible for paying taxes on all dividend income earned from investments in the stock market. Dividend income will need to be reported on Form 1040NR. Dividend income is usually reported to the taxpayer on Form 1099-DIV
VIII. Social Security and Medicare Payments
As an F-1 or J-1 student/scholar, you are not required to make Social Security or Medicare payments when you are still considered a non-resident for tax purposes (most F1 and J1 students are considered a non-resident for the first 5 years on the F1/J1 visa, after which, they become a resident for tax purposes, most J1 scholars are considered a non-resident for the first 2 years on the J1 visa, after which they become a resident for tax purposes). If money was mistakenly deducted from your wages for either Social Security or Medicare, you are entitled to a refund and should contact your present or former employer. If the employer refuses to grant a refund, you will need to file Form 843 with the Internal Revenue Service. Some J-2 dependents who are employed may be responsible for paying Social Security and Medicare taxes if they were not students who worked on campus.
X. Where to Mail your Federal Tax Return
Include both 1040NREZ and Form 8843 – state forms should NOT be included, they will be mailed separately
As a foreign student in F-1 or J-1 status, all of your tax materials must be sent to the following address:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
XI. 1042S and W-2 Forms
The designated copy(ies) of either your 1042-S or W-2 form should be attached to your tax return on the left hand side of the paper in the appropriated space. Do not, however, attach your payment to the form. All payment checks should be enclosed with your form but not attached.
XII. Determining Your Tax (Line 15 of Form 1040NR-EZ)
In order to determine the tax on your annual income, you will need to refer to the table on page 21 of the 1040NR-EZ instruction booklet. Take the number that you wrote on line 14 of form 1040NR-EZ and use the number which is located in the second column to the right of that figure.
XIII. Addressing a Check to the IRS
If you owe taxes and are required to enclose a payment with your tax return, all checks should be made out to the “US Treasury.” Please do not make out your checks to the Internal Revenue Service or IRS.
XIV. Deadline for Filing
The deadline for submitting your 2013 tax return is April 15, 2014.
XV. IRS Home Page
All forms and instructions may be downloaded from the IRS web-page. www.irs.gov
North Carolina State Tax Form (Form D400)
In addition to federal taxes, non-immigrant students and scholars are also required to file a North Carolina income tax form if they had earned income that was derived from a North Carolina source.
Only those whose adjusted gross federal income (line 10 on the 1040NR-EZ0 was above $5500 (single filers); or $11,000 (married filing jointly) are required to file the state tax return (see instructions of D400 to see if you are required to file or not).
If you had earned income from another state, you will be responsible for filing a tax form for that particular state. Since each state has its own tax code, this information only covers the rules and regulations that govern the tax code of North Carolina.
- The vast majority of individual taxpayers in the state of North Carolina are required to file Form D-400 without TC ( N.C. Dept. of Revenue Individual Income Tax Return)
- Do not try to file this before you file your federal taxes. You must fill this out AFTER finishing your federal taxes.
- Follow our guides above to input the correct numbers in the correct places
Important Points Pertaining to Form DS-400
- Nonresident aliens are not allowed to take the N.C. standard deduction that is usually noted on line #11 of the form. EXCEPTION: Indian students are allowed to take this deduction, see example forms above for Indian students for further explanation.
- When filing your state tax return, make sure that you include the proper W-2, 1042-S, etc. form(s). This information is always notated on the W-2,1042-S, etc. forms that you receive from your employer (i.e. “Attach to any state tax return that you file.”).
- If, after you complete your state tax return, you determine that you are due a refund of taxes paid, you will mail your return to:
N.C. Dept. of Revenue
P.O. Box R
Raleigh, NC 27634-0001
- If you are not due a refund or if you are required to pay state taxes, your return will be mailed to:
N.C. Dept. of Revenue
P.O. Box 25000
Raleigh, NC 27640-0640