SEVIS  |  Regulations and Procedures  |  Employment  |  Taxes  |  Dependent

OVERVIEW OF U.S. TAXATION

Students may be subject to U.S. taxation based on the source and type of income and the number of years they have been present in the U.S. Tax treaties with over 40 countries may alter tax liability. Other forms of taxation include state income tax, state and local sales tax, and Social Security/Medicare. Under the U.S. system, it is the individual's responsibility to determine tax liability and file the appropriate forms in a timely manner.

We suggest that you attend the tax workshop organized by the International Center with a representative from Internal Revenue Services (IRS) in the month of March.

How to Determine Tax Status: A key factor in determining an individual's income tax liability is his or her status as a resident alien or non-resident alien for tax purposes. This status may or may not coincide with their resident or non-resident status with the Bureau of Citizenship and Immigration Service (USCIS). Many individuals who are in a non-immigrant status are considered resident aliens for tax purposes only.

Students who are in the United States in F-1 or J-1 status for fewer than five (5) calendar years, including partial years, are exempt from counting days and are automatically considered non-resident aliens for tax purposes. For example, if a student arrived in November 1990, the five-year exemption ended on 31 December 1994. After that time (January 1995), they should use the substantial presence test to determine how to file their taxes.

Substantial Presence Test: Once a person is no longer exempt from counting days of presence, the substantial presence test is used to determine resident vs. non-resident status. The individual must have been in the United States for at least 31 days in the current calendar year, AND have been present in the United States for 183 days in the current and two (2) preceding calendar years as follows (the days that one was exempt from counting while in F-1 or J-1 status should not be included): all days from current year + 1/3 of days from last year + 1/6 of days from two years ago. If the total is 183 days or more, the individual may be entitled to file as a resident alien. Further information may be obtained from the IRS website.

Overview of U.S. Taxation for J-1 and H-1B Visitors
Professors and Researches: The term scholar herein will refer to professors, researchers and short-term scholars working temporarily at U.S. colleges and universities on J-1 or H-1B visa. Scholars may be subject to U.S. taxation based on the source and type of income and the number of years they have been present in the U.S. Tax treaties with over 40 countries may alter tax liability. Other forms of taxation include state income tax, state and local sales tax, and Social Security/Medicare. Under U.S. system, it is the individual's responsibility to determine tax liability and file the appropriate forms in a timely manner.

How to Determine Tax Status: A key factor in determining an individual's income tax liability is his or her status as a resident alien or non-resident alien for tax purposes. This status may or may not coincide with their resident or non-resident status with the Bureau of Citizenship and Immigration Service (USCIS). Many individuals who are in a non-immigrant status are considered resident aliens for tax purposes.

Generally, teachers, researchers and trainees who are in the United States in J-1 status for under two calendar years, including partial years, are exempt from counting days of presence and are considered non-resident aliens for tax purposes. A scholar who was in the U.S. for over two (2) calendar years on a J visa must start counting days of presence and is a resident alien for tax purposes, provided the substantial presence test is met. H-1B scholars are not exempt from counting days and must start counting from the date of arrival.

Substantial Presence Test: Once a person is no longer exempt from counting days of presence, the substantial presence test is used to determine resident vs. non-resident status. The individual must have been in the United States for at least 31 days in the current calendar year, AND have been present in the United States for 183 days in the current and two (2) preceding calendar years as follows (the days that one was exempt from counting while in J-1 status should not be included): all days from current year + 1/3 of days from last year + 1/6 of days from two years ago. If the total is 183 days or more, the individual may be entitled to file as a resident alien.

For specific tax information and/or tax publications, visit the Internal Revenue Service website.
http://www.irs.gov/businesses/small/internationalindex.html
http://www.irs.ustreas.gov/individuals/foreignindex.html