F-1 Tax Requirement
The following is a general overview of federal-tax obligations for F-1 students. The staff of the Office of International Student Services is not licensed to offer tax advice. Students should consult a tax professional (known as an Enrolled Agent) or use the government resources listed below for assistance with specific tax questions.
If I don't work, do I have to fill out any tax forms?
- Yes! All F-1 international students must complete and send a Form 8843 to the U.S. Internal Revenue Service (IRS).
- The Form 8843 requires information about your visa status, the school you attended, and the number of days you were present in the U.S. during the last three years. You must keep a copy of each Form 8843 that you file. Start a "personal tax folder" that you can easily locate each year.
- If you were present in F-1 status during any portion of a calendar year (January 1 through December 31), you must fill out a Form 8843 to report the number of days you were present. Even if you were present for only one day in a particular year (suppose you entered the U.S. as an F-1 student on December 31), you must file a Form 8843 for that year. Keep a record of your departure and entry dates.
Why do I need to keep track of my days of presence?
- The IRS uses, among other things, the number of days an alien (an individual who is not a U.S. citizen or lawful permanent resident) is present in the U.S. to determine how the individual is taxed.
- Based on the number of days of presence, an alien's tax status maybe one of the following: (1) nonresident alien, (2) resident alien or (3) dual-status alien.
- Regardless of their number of days of presence, F-1 students are automatically considered nonresident aliens for tax purposes for the first five years of presence in the U.S. while in F-1 status. The Form 8843 serves as a record of the F-1 student's exemption from potentially being classified as a resident for tax purposes by disregarding the days of presence.
What if I worked on campus or received a room-and-board scholarship?
- If you obtain a job on campus, or if you receive a room/board scholarship, you must make an appointment with the Payroll Office for a "tax interview." During this interview your taxes will be estimated. Your country of residence may have a tax treaty with the U.S. which may reduce your taxes. If such tax-treaty benefits do not apply to you, taxes must be deducted at the time you receive wages (known as withholding). Accordingly, taxes will be deducted from each paycheck, and in the case of a room-and-board scholarship, taxes will be billed to your student account.
What about off-campus employment?
- If you receive permission to work off campus under the provisions of the F-1 status (CPT, OPT, or employment due to severe economic hardship), you must provide information about your tax status to the employer in order that the appropriate taxes may be withheld.
- Income for services performed by nonresident aliens in F-1 status is not subject to withholding of Social Security or Medicare taxes.
What other types of income do students typically receive?
- For nonresident aliens in F-1 status, interest received on deposits held in the "banking business" is not taxable, unless the nonresident holds large sums in a bank for the purpose of earning money.
- Scholarships that cover tuition, fees, books, supplies and equipment that a student is required to buy, are not taxable. Amounts used for other purposes, such as room and board, are taxable.
- Some students invest in stocks or real property and may receive income such as interest or dividends, rent, or capital gains, while others may receive gambling winnings or prizes, perhaps even alimony and royalties. These types of income are taxable and must be reported on your tax return.
What are the tax forms I may receive?
- In January of each year, you will receive important tax documents pertaining to the preceding tax year. For example, if you worked on campus you will receive a Form W-2 and/or Form 1042S from the Payroll Office or from your non- Pepperdine employer (such as food services or the bookstore). You must provide a current mailing address so that you will receive tax-related documents, some of which may be:
- Form 1098T, Tuition Statement
- Form W-2, Wage and Tax Statement
- Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding
- Form 1099-INT, Interest Income
- Form 1099-G, Certain Government Payments (report of state income tax refund received for the previous tax year)
What are the tax forms I must file?
- For every tax year in which you received taxable income in the U.S., you must file a tax return in addition to the Form 8843. A tax return is a report of the taxpayer's income and taxes, filed by the taxpayer on an IRS form. Most F-1 nonresident aliens file a Form 1040NR-EZ and receive a partial or full refund of taxes that were withheld or paid in advance.
What if I have been present in F-1 status for more than five years or changed my visa status?
- If you did not receive taxable income during the sixth year in F-1 status, and you do not intend to remain in the U.S. beyond the sixth year, it is not necessary to file a Form 8843.
- Special rules apply for determining tax status for F-1 students who received income during the sixth year. Generally, if you expect to remain in the U.S. for more than six years, you should file a tax return as a resident alien in the sixth year and continue to do so for subsequent years, unless you choose to file a Form 8840 to establish a closer tax connection to your country of residence and intent to eventually leave the U.S. permanently.
- Special rules apply for F-1 students who received permanent residency status; changed nonimmigrant status to an H visa or other status; or left the U.S. permanently during the sixth year. The year in which any of these occurred may be a dual-status tax year.
What are the consequences of not filing tax forms?
- You are responsible for mailing the tax forms to the IRS and keeping a copy. Neglecting to do so, or filing the forms incorrectly, can result in severe penalties, including fines and interest on unpaid taxes. It can also impact future nonimmigrant or immigrant visa applications. If taxes were not withheld, and you do not file a tax return, you may receive a letter from the IRS years later, asking you to pay the taxes plus penalty and interest.
- Tax forms and publications can be downloaded from the U.S. Internal Revenue Service http://www.irs.gov/. California state tax forms and publications can be downloaded from the California Franchise Tax Board.
- IRS Publication 519, US Tax Guide for Aliens, includes information on how to determine residence or nonresident status for tax purposes; what types of income are taxable; the effect of tax treaties on tax liability; how to claim exemption by treaty; and much more.
- IRS Publication 901, US Tax Treaties, lists treaties in effect at the time of publication each year, with brief synopses of tax treaty articles relating to students and scholars.
- IRS tax assistance
- Automated Refund Service
- "Sprintax" online tax preparation software