Basic Tax Information for International Students
In the United States each individual or family receiving any kind of earnings from employment, investments, scholarships etc. is required to file a tax return for the previous financial year on April 15. This document is a very basic guide to help explain your responsibilities within the U.S. tax system and familiarize you with some of the forms and terminology you will be coming across.
In addition to this guide St. Mary’s also provides a special service to help members of our community to file their tax forms correctly. This program is called Volunteer Income Tax Assistance (VITA). For more information about VITA please call 210-431-4393.
General Information for all International Students Social Security Numbers
In order to receive payment for service you must have a Social Security Number or SSN. The purpose of the SSN is to track an individual for taxation purpose. SSNs are a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents. You must apply for an SSN through the Social Security Administration Office. For more information please contact the International Student and Scholar Services Office.
Tax Identification Numbers
If you are not eligible or required to obtain a Social Security Number, but are required to file a U.S. tax return because, for example, you receive a scholarship, then you must have a Tax Payer Identification Number (TIN). In order to be assigned a TIN you must file form W-7 with the IRS either in person or by mail.
- W-2-This form is issued by an employer for every individual under their employ. It reports the wages earned and the taxes withheld from them. You should receive your W-2 by the end of January each year. If you think you should have received one of these from St. Mary’s University but have not please seek assistance from ISSS.
- W-4- This form must completed by you, with the Human Resource Office, prior to beginning work. It is used to determine the amount of federal income tax that will be withheld from your paycheck. Non-residents aliens are currently required to claim ‘single’ with one exemption.
- W-7- Also known as an Application for IRS Individual Tax Identification Number, this may be submitted in person or by mail. Along with this form you will also need to file original or notarized copies of documents that substantiate the information provided on the W-7, for example you passport.
- 1040NR/1040NR-EZ- Nonresident aliens (including students) file their tax returns using one of these forms (1040NR-EZ is easier and more convenient; if your tax situation is more complex then you will have to file the non EZ). The deadline is April 15. You must file your W-2(if applicable) and form 8842.
- 8233-This is only used to claim exemption from federal income taxes on compensation earned for personal service due to a tax treaty. In cases where this is applicable, the form must be submitted to the Finance Office, who then forward it to the IRS. Taxes are withheld until the form is filed. To find out if your country has a tax treaty with the U.S. please contact the Finance Office.
- 8843- All nonresident students are required to file this form, along with form 1040NR by April 15th. Even in cases where you may be exempt from filing a 1040NR you must still file 8843 by June 15th.
FICA Tax Exemption
You are exempt from FICA taxes under Section 3121(b)(19) of the Internal Revenue Code if you meet the following requirements:
- Are a nonresident alien for tax purposes
- Are present in the United States under and F,J,M, or Q visa
- Are performing services in accordance with the primary purpose of you visa.
Information for those on Scholarships and/or Fellowships
If you are in receipt of scholarship or fellowship funds you are required to file some specific forms in addition to Form 8843 and 1042NR/1042NR-EZ. If you are not eligible for a Social security number you will also need to apply for a TIN.
- Form W-8BEN - This form must be completed ONLY to claim an exemption from federal income taxes on non-service scholarship/fellowship earnings due to a tax treaty. Please contact the Finance Office to ascertain if your country of residence has a tax treaty with the U.S. The completed form should be signed and forwarded to the Finance office. Taxes will be withheld until this form is filed with the Finance Office. The W-8BEN is valid for three years.
- 1042-S - This form is required in order to file form 1042NR/1042NR-EZ correctly. It reports the taxable amount of scholarships that you received, and the amount of taxes that were withheld. You will receive this form by March 15th each year ONLY if you received scholarships that exceed the required expenses of tuition, fees, books and equipment.
Tax Calculation Process for Scholarships Received
To meet the Internal Revenue Service requirements, the University must take the following steps:
- St. Mary’s must determine if you are a resident or nonresident alien for U.S. tax purposes. If you are present in the U.S as a student under an ‘F’ or ‘J’ visa you are considered a nonresident alien for tax purposes.
(Please note that if you have been present in the United States for any part of the last 5 calendar years, and were physically present in the U.S. at least 183 days in the current year, you are considered a Resident Alien for tax purposes, and are not required to receive a 1042-S. Please contact the Finance Office if this is the case.)
- Once this determination is made, the source of your scholarship must be considered. If your scholarship is from a U.S. source (e.g. St. Mary’s), it is considered taxable.
- Finally St. Mary’s must determine what portion of your scholarship is taxable.
- Under section 117 of the Internal Revenue Code, amounts received that are considered “qualified scholarships” are exempt from U.S. withholding taxes. “Qualified scholarships” only include amounts used for (a) tuition and fees required for enrollment or attendance at the educational organization, or (b) fees, books, supplies, and equipment required for courses of instruction.
- Amounts used for room and board are not treated as “qualified scholarships”, and are therefore subject to withholding tax.
- If you hold an F, J, M, or Q visa your tax rate is 14%.
- The only other way this amount can be excluded from taxes is if your country has a tax treaty with the United States. If so, the form W8-BEN, described above, must be filed with the Finance Office.
If it is determined that a portion of your scholarship/fellowship is taxable, you will receive a letter each semester informing you of the tax amount. The University will submit this tax to the IRS on your behalf, and then charge this amount to your student account. You can contact the Business Office for assistance if you cannot pay these taxes immediately. You must make arrangements with the Business Office to assure that late charges, or holds are not placed on your account.
The University will then send you the form 1042-S, no later than March 15, showing the taxes you paid or were charged for the previous calendar year. You will then be required to file the 1040NR (as stated above) by April 15 to claim a refund for all or a portion of these taxes.
Additional Information and Support
With the exception of the W-2 and 1042-S the forms above are available on-line from the IRS website (www.irs.gov).
Publication 519, “U.S. Tax Guide for Aliens”: This publication can be downloaded from the IRS website (www.irs.gov), and has information to assist you with any tax reporting requirements you may have.
Social Security Administration: For queries and more information about Social Security Numbers please visit the Social Security Administration website (www.ssa.gov).
Several Offices at St. Mary s will also be able to help you with certain aspects of your tax return. Please see the contact details below:
- Finance Office: Sheila Nix, Director Accounting Operations – 210-861-4138
- Business Office : Dora Ybarra, Director – 210-436-3731
- Financial Assistance: David Krause, Director – 210-436-3141
- Human Resources: Karla Benavidez – 210-436-3725
- VITA: 210-431-4393 or 210-431-5704