In virtually every country, individuals who earn income must pay taxes. In some countries taxes are taken out before you even receive a paycheck. In other countries, like the United States, some funds are taken out of your paycheck, but you must file a tax return at the end of the year so the exact amount of money you owe in taxes can be calculated.
International Students and Taxes
Your earnings as an F-1 student will be subject to applicable federal, state, and local taxes unless you qualify under a tax treaty between the United States and your home government for a reduction or exemption of taxes.
U.S. employers are required by law to withhold those taxes from your paycheck and send them to the federal and state governments. Your federal taxes are paid to the U.S. Internal Revenue Service (IRS), and your state taxes are paid to the Illinois Department of Revenue.
Here are some key points about U.S. taxes that international
students should know. By April 15th of each year:
1. All international students must file a Statement for Exempt Individuals, Form 8843, whether they have worked in a job or not. (Please refer to Form 8843 Instructions for exceptions.)
2. All international students who work (those who owe taxes and those who are covered by a tax treaty and do not owe taxes) must file, for the prior calendar year:
A U.S. Income Tax return - most often 1040 NR-EZ (the "easy" or simple form for non-residents);
An Illinois State Tax return, IL-1040, and
A Statement for Exempt Individuals, Form 8843.
3. For a student who has earned income from a job, there is a standard exemption (i.e., amount not taxed). In 2000 this amount was $2800. For all income over the standard exemption amount of $2800, the person must pay tax, unless he or she comes from a country which has a tax treaty with the U.S that indicates otherwise.
4. The "Exempt" status of the W-4 form (which the student fills out at the time of employment) expires each year, and a new form must be completed by mid-February of the following year.
5. The deadline for filing tax returns and paying taxes every year is April 15th.
Social Security taxes/FICA
A separate tax issue is Social Security tax, also known as FICA. In general, as an F-1 student, you will be exempt from Social Security and Medicare taxes for your first five years in the United States, as long as you continue to declare non-resident status for tax purposes (see Internal Revenue Service Publication 519, U.S. Tax Guide for Aliens). [26 CFR 3121(b)(19)]. (These rules also apply to other students since all Undergraduate students enrolled in at least 6.0 credit hours and graduate students enrolled in at least 2.0 credit hours during fall and winter semesters are exempt from paying FICA (neither the student nor the department pays the FICA Tax). Of course, all international students must enroll in classes full time in order to maintain status. This is 8 credit hours for graduate students, and 12 credit hours for undergraduate students, unless an exception from full time enrollment has been granted in advance by the International Student Services Office.
F-1 students who worked off campus with the appropriate work authorization (economic hardship employment or practical training) are also exempt from these two taxes. However, F-1 students in the U.S. in this status for more than five years, and those in other non-immigrant statuses, and those who worked without authorization ARE subject to Social Security (FICA) and Medicare Tax.
Refunds of FICA Taxes
If FICA has been withheld in error, the employer must provide a refund. The employer applies for reimbursement by filing a claim on form 941C with IRS. Thus, if Social Security tax was withheld in error and your employer is a state or local government organization, including educational institutions, you should first request a refund from the local government employer or school administrator.
If the employer cannot or will not issue the refund, there is a special procedure you can use to obtain a refund of Social Security and Medicare Tax. This procedure is entirely separate from filing your income tax forms.
If your employer does not refund social security tax although it was withheld in error, you should request a refund from the IRS. You will be required to show on the forms that you attempted to contact your employer first. You will also be required to attach copies of your work authorization, a copy of your I-94 card, and a copy of your W-2 form. It all gets mailed to the IRS office in Philadelphia Pennsylvania. You should keep copies of everything you send and allow from eight to ten weeks for processing. To obtain a refund in this way, file a claim on Form 843 <http://www.irs.gov/pub/irs-pdf/f843.pdf> and Form 8316 with the IRS office to which your employer pays Social Security taxes. If you do not know which office this is, send your claim to: Internal Revenue Service Center, Philadelphia, PA 19255.
Go to the IRS website at <http://www.irs.gov/faqs/faq13-5.html> for instructions. Different kinds of taxes are withheld by employers. The W-2 form (Wage and Tax Statement) sent to you by your employer each January has boxes for reporting withholding of Federal Income Tax (box 2), Social Security Tax (box 4), Medicare Tax (box 6), State Income Tax (box 17) and local income tax (box 19).
IRS Tax Information
You may obtain publications on tax regulations and tax forms from these sources:
Student Services Office
The ISS has a variety of forms and publications available. It also offers an IRS (Internal Revenue Service) Tax Workshop each year conducted by IRS-trained volunteers, on campus to help the University's foreign students and staff complete their tax returns. ISS staff members are not qualified to answer tax questions so it is important that you attend this workshop!
The IRS web site is www.irs.gov/ . These web page offer IRS Publications and Forms (select "Forms and Pubs"), all listed in order of their number. These publications and forms may be downloaded and printed, along with their instructions. Most non-immigrant aliens on F, J and H visas will need to complete the 1040NR EZ form (Federal) and the IL-1040EZ form (State); BUT you must be sure to read the instructions to make sure that you are completing the correct forms.
Even if you did not work for the entire year 2001, you will still need to complete a Form 8843 www.irs.ustreas.gov/pub/irs-fill/f8843.pdf.
(On-Line Applications) http://www.irs.ustreas.gov/forms_pubs/fillin.html
(Downloadable Forms) http://www.irs.ustreas.gov/forms_pubs/forms.html
Note: The forms require Adobe Acrobat software, which may also be downloaded for free at the site.
Tax Treaties: www.windstar-tech.com
Web-Based Tax Advice: http://www.thetaxguy.com/nrtaxguide.htm
State of Illinois Forms:
(EZ On-Line application)
To order forms, instructions, and publications, call IRS telephone number (800) 829-3676. To ask tax questions, call (800) 829-1040.
Information on State Taxes:
There is also a toll-free number: (800) xxx-xxxx for automated forms ordering system.
IRS Local Office
You may go to the IRS building:
Internal Revenue Service
Monday through Friday
8:00 AM through 4:30 PM
Free assistance in tax preparation
Note: Lewis University staff members are not qualified to answer tax questions. If you have questions, you may contact IRS or your tax advisor.
By posting this information, the Office of International
Student Services is providing a service to the Lewis University
international student community. The Office of International
Student Services is not responsible for information or services
provided by the agencies, business, or individuals listed on
this page. The Office of International Student Services assumes
no responsibility, nor do we endorse any specific agency, business,
or individual listed. Moreover, the Office of International Student
Services may not intervene on behalf of either party should a
arise. Because of legal restrictions, the staff of International Student Services Office (ISS) is not qualified to answer individual questions from international students regarding their tax liabilities or to provide individual tax advice. United States tax law is extremely complex and each student's situation varies.
Please note also that the staff of the Office of International
Student Services is NOT able to provide any assistance to you
as you work on your taxes; we simply do not have the requisite
expertise to do so.