Q1: Do international scholars from abroad have to file federal tax forms?
Q2: What form must I file?
Q3: Where can I get these forms?
Q4: How do I know whether to use the 1040 NR-EZ form?
Q5: What information do I need to prepare my tax forms?
Q6: What references may help with complicated situations?
Q7: What is UH legally responsible for with respect to federal and state taxes for international scholars?
Q8: Why aren’t taxes automatically collected from wages and salary avoiding the complicated tax forms?
Q9: Can I get an extension if I am unable to file my tax returns on time?
Q10: What happens if I don’t file a tax return?
Q11: Do scholars who left the US have to file tax forms?
Q12: J-1 scholars paid by a U.S. source are exempt from counting days of presence for 2 calendar years. After 2 calendar years of residence in the U.S. they may file as residents using the Substantial Presence Test. Can they still file as nonresidents if they want to?
Q13: J-1 scholars who are paid by a foreign source are exempt from counting days of presence for 3 (or fewer) years. Do these J-1 scholars file as nonresidents?
Q14: If H-1Bs do not pass the substantial presence test, they must file as nonresidents. If they pass the substantial presence test, then are they required to file as residents? Can they file as nonresidents?
Q1: Do international scholars from abroad have to file federal tax forms? [top]
A1: Yes. All nonresident alien students and "trainees" who were in the U.S. under F, J, M, or Q visas need to file federal tax forms annually. The U.S. Internal Revenue Service (IRS) includes J-1 scholars in the “trainee” category, so J-1 scholars and their dependents must file tax forms. Most J-1 scholars and J-2 dependents are nonresident aliens for tax purposes and file annual federal tax returns (Forms 1040NR or 1040NR-EZ and Form 8843) only if they received U.S. source income. If a J-1 exchange visitor or J-2 spouse had no U.S. source income, he/she must still file Form 8843 to document his/her status as a nonresident alien. If a J-1 or J-2 is determined to be a resident alien, then he/she must file U.S. resident tax returns (Form 1040 or 1040EZ). See a presentation on general tax guidelines.
Q2: What form must I file? [top]
A2: Nonresident aliens who have U.S. source income must file either the 1040NR or 1040NR-EZ, whichever is applicable, along with Form 8843 to verify status as a nonresident alien. If they received wages subject to withholding they must file by April 15. If they received no such wages, they must file by June 15.
Nonresident aliens with no U.S. source income do not need to file tax returns. However, they must still file Form 8843 by June 15 to document their status as nonresident aliens.
For State of Hawaii taxes, you may file Form N-15 (Nonresident).
Q3: Where can I get these forms? [top]
A3: After January 1, you may obtain tax forms from the IRS and the State Tax Department. You may also get tax forms at U.S. post offices and state libraries.
IRS forms can be downloaded from the IRS website. You can also order forms by calling toll-free 1-800-829-3676. Be sure to download or request the INSTRUCTIONS for the forms.
State of Hawaii tax forms can be downloaded from the State Department of Taxation website. You may also order them from the State tax forms request line at 1-800-222-7572.
FSIS will have a limited supply of nonresident alien tax forms and publications during the tax filing season.
Q4: How do I know whether to use the 1040 NR-EZ form? [top]
A4: The EZ form is for "simpler" tax cases. It may be used by both single and married nonresidents with no dependents who earn less than $100,000 and have no itemizable deductions other than state and local tax withholdings. Recipients of US source fellowships may also use 1040NR-EZ. Canadians, Indians, Japanese, Koreans, and Mexicans should not use the EZ if they want to claim exemptions for spouse or children.
Q5: What information do I need to prepare my tax forms? [top]
A5: If you were paid wages or salary, you should receive a W-2 form from your employer(s) after January 31. A copy of each W 2 must be attached to your tax return. If you earned dividends that are taxable on investments you will receive a 1099 form and this also must be attached. If you received a scholarship or fellowship, you may receive a 1042S form and should attach that to your tax return. You may need receipts for charity donations you made and medical expenses during the tax year. You may need other documents if your tax situation is complex.
Q6: What references may help with complicated situations? [top]
A6: Publication 519 "US Tax Guide for Aliens" is helpful. Publication 901, "US Tax Treaties" and Publication 597 "Information on the U.S.-Canada Income Tax Treaty" summarizes treaty benefits that may dramatically reduce taxes.
Q7: What is UH legally responsible for with respect to federal and state taxes for international scholars? [top]
A7: UH must inform scholars of their obligation under the tax codes. However, advisers must specifically avoid personal and individual consultation with respect to an individual tax situation. UH officials cannot be responsible for helping you with your tax forms. If you need assistance, you may want to consult with the IRS, the State Department of Taxation, or a reputable tax preparation service or certified public accountant.
Q8: Why aren’t taxes automatically collected from wages and salary avoiding the complicated tax forms? [top]
A8: Most wage-earners do have some taxes automatically withheld. However, these are estimates only.
Q9: Can I get an extension if I am unable to file my tax returns on time? [top]
A9: Yes. Both the IRS and State Dept. of Taxation have forms to request an extension. The IRS application for extension is Form 4868. The State of Hawaii application for extension is Form N-101A. You must file the application for extension by the regular due date of the return. The extension application does not extend the time to pay your income tax. The tax is due by the regular due date of the return.
Q10: What happens if I don’t file a tax return? [top]
A10: Tax return submission is REQUIRED by tax law, but compliance is VOLUNTARY. If you don’t file, you may or may not get caught. If you do get caught, you will be fined. Individuals who comply are generally eligible for refunds. Obviously you won’t get a refund if you don’t file. Scholars who apply for permanent residence may have difficulty adjusting status if they have not complied with tax law.
Q11: Do scholars who left the US have to file tax forms? [top]
A11: Yes. Scholars abroad may obtain tax forms, instructions and information from the IRS website at www.irs.gov or www.irs.gov/businesses/small/international/index.html. You may also contact some U.S. Embassies or Consulates to get forms and help. IRS maintains permanent offices in Frankfurt, London, Paris and Puerto Rico. For the State of Hawaii, you may obtain tax forms, instructions, and information from the State Department of Taxation website.
Q12: J-1 scholars paid by a U.S. source are exempt from counting days of presence for 2 calendar years. After 2 calendar years of residence in the U.S. they may file as residents using the Substantial Presence Test. Can they still file as nonresidents if they want to? [top]
A12: Ordinarily, J-1 scholars present in the U.S. for 183 days or more in their third year qualify to file as residents under the Substantial Presence Test. In order to continue filing as nonresidents, they must prove a closer connection to a foreign country than to the U.S. In this case, they would complete the 1040NR or 1040NR-EZ and attach a Form 8840.
Q13: J-1 scholars who are paid by a foreign source are exempt from counting days of presence for 3 (or fewer) years. Do these J-1 scholars file as nonresidents? [top]
A13: Yes, filing as a nonresident protects the foreign-source income from U.S. tax. However, if they choose to follow the same rules as a J-1 with U.S. source income and file as residents, they can do so, but must pay U.S. tax on their total worldwide income.
Q14: If H-1Bs do not pass the substantial presence test, they must file as nonresidents. If they pass the substantial presence test, then are they required to file as residents? Can they file as nonresidents? [top]
A14: Anyone who passes the Substantial Presence Test must file as a resident. An H-1B who passes the SPT would have a really tough time proving a closer connection to another country than to the U.S. If there is a treaty involved, the individual would file as a dual resident, not a nonresident.
The information above was extracted from various sources, including:
- Adviser’s Manual of Federal Regulations Affecting Foreign Students and Scholars, NAFSA: Association of International Educators
- Information provided by Deborah Vance, author of the US Federal Income Tax Guide for International Students & Scholar
- Form N-15 Instructions for Preparing State of Hawaii - Department of Taxation Nonresident Income Tax Return
- IRS Publication 519 U.S. Tax Guide for Aliens