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San Jose, CA 95128

Tax Considerations for International Students and Scholars

 Posted on April 12, 2017 in Taxation Law

San Jose tax law attorney, tax considerationsIs a Non-U.S. Citizen Required to File a U.S. Tax Return?

Non-U.S. citizens with taxable income must file a tax return and must adhere to special requirements. This situation often comes up with international students and scholars who work or receive scholarship funds.

Requirements for Non-U.S. Citizen Taxpayers

Non-U.S. citizen taxpayers are defined in the Internal Revenue Code as those who are resident or nonresident aliens who are engaged in trade or business within the country. These individuals must file a U.S. tax return.

Foreign teachers, trainees, or students who are temporarily in the country on F, J, M, or Q visas will be considered to be engaged in trade or business.

Most people with non-immigrant status of F-1, J-1, M-1, Q-1, and Q-2 can be employed in the U.S. If such people are employed, they can apply for a Social Security number. If someone is not eligible for a Social Security number and has a tax filing requirement, an Individual Taxpayer Identification Number can be applied for through the IRS.

It is critical that the non-U.S. citizen taxpayer’s name be listed on all documentation exactly as it appears on official documentation like a Social Security Administration card or other official documents.

Taxable Events

A taxable event includes the following:

  • A taxable scholarship or fellowship under Chapter 1 of Publication 970, Tax Benefits for Education;
  • Income partially or fully exempt from tax as provided under a tax treaty; and
  • Any other income taxable under the tax code.

Having a taxable event means that the non-U.S. citizen will have to file a Form 1040-NR or 1040NR-EZ.

Considerations for Withholding Agents

Withholding agents—such as universities or payroll professionals—should be sure that they file accurate forms. Errors on Form 1042-S (“Foreign Person's U.S. Source Income Subject to Withholding”) could slow down refunds due to non-U.S. citizen taxpayers.

A common error made by withholding agents is that two or more recipients will be listed in box 13a of Form 1042-S. In cases with joint owners, only one of the owners can be listed in this field.

Contact a Santa Clara County Tax Attorney

If you have questions about your tax obligation or about paying taxes as a non-U.S. citizen, you should seek legal counsel. Failure to properly pay taxes can result in fines or even criminal charges.

A knowledgeable tax law attorney can ensure that you are in compliance with the special requirements that apply to you as a non-U.S. citizen. Our firm can also assist universities who have international students and scholars. Contact a knowledgeable San Jose tax law attorney at John D. Teter Law Offices at 408-866-1810 today.


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