Internal Revenue
Service
Wage and Investment
Stakeholder Partnerships, Education
and Communication
Winter/Spring 2015
Income Tax Workshop
for ��Nonresident Aliens��
Please Note
This workshop is for students on
F-1 or J-1 visas who have been in
the U.S. for 5 years or less.
It is also for scholars on
J-1 visas who have been in the U.S.
for 2 years or less
Please Note
• E-filing is not available for:
– F-1 and J-1 students who have been in the U.S.
for 5 years or less
– J-1 scholars who have been in the U.S. for 2 years
or less.
• If you e-file, you will misrepresent your tax
filing status. (This is tax fraud.)
Internal Revenue Service
• The taxation agency of the U.S.
Government to which you
– Report your immigration status
– File your personal Income Tax Return
State Tax Departments
• The taxation agency of the State
Government to which you may need to
– File your personal Income Tax Return
• If you resided in New York State in 2014, you
may need to file a NYS Income Tax Return.
• If you lived in another state, you may need to
file that State��s Income Tax Return.
• If you lived in two states, you may need to file
two State Income Tax Returns.
Basic Tax Vocabulary
•
Alien: generally, any person who is
not a U.S. citizen
•
Student: person temporarily in the
U.S. on an F, J, Q or M visa
•
Teacher or Trainee: person who is
not a student & who is temporarily in
the U.S. on a J or Q visa
Basic Tax Vocabulary (cont.)
•
Compensation/Earnings: wages,
salaries, tips
•
Income: wages, salaries, tips, interest,
dividends, some scholarship/fellowship
grants
•
IRS: Internal Revenue Service
•
Income Tax Return: statement filed
(submitted) by individual taxpayer to the
IRS
Who Must File
(a) 2014 Form(s) with the
Internal Revenue Service?
All individuals temporarily
in the U.S. on a(n) F-1 or
J-1 visa must file (a)
form(s) with the
Internal Revenue Service.
Which form(s) must
they file?
All individuals
in the U.S. on
F-1 or J-1 Student visas for 5 years or less
or
J-1 Scholar visas for 2 years or less
MUST file
Form 8843
��Statement for Exempt Individuals and
Individuals with a Medical Condition��
Form 8843
Form 8843 (cont.)
Form 8843 (cont.)
F
Form 8843 (cont.)
Do not complete the entity information and sign Form 8843 if you will
attach it to the Form 1040NR(EZ) (discussed later in the presentation).
What about F-1/J-1
students & J-1 scholars
who did not earn any U.S.
income in 2014?
They do not have to pay taxes,
but
they must send a form
to the IRS.
F-1/J-1 Students & J-1
Scholars: No U.S. Income
•
File Form 8843: ��Statement for Exempt
Individuals & Individuals with a Medical
Condition��
What about F-1/J-1
students
who received only a
scholarship or fellowship
grant in 2014?
F-1/J-1 Students: Scholarship
or Fellowship Grant Only
• Scholarship and fellowship grants are
not
included in taxable income
if used for
tuition, fees, books, supplies and
equipment required for courses
AND if
the student is pursuing a degree.
• Any portion of scholarship or fellowship
received for room & board or in exchange
for teaching or research
is included in
taxable income. (Unless exempt by treaty)
What is a Scholarship or
Fellowship?
• You call it:
• Internal Revenue calls it:
Non-taxable
Scholarship
(No work required)
Tuition Waiver
What is a Scholarship or Fellowship?
Room and Board
Waiver
Taxable Scholarship
•You call it:
•Internal Revenue calls it:
What is a Scholarship or Fellowship?
Teaching or Research
Assistantship Stipend
(recipient performs
work)
Taxable Wages
•You call it:
•Internal Revenue calls it:
What do I file if I have a
scholarship, but I don��t have to
pay taxes on it?
File Form 8843
What do I file if I have a
scholarship I must pay tax
on?
File Form 8843
AND
Form 1040NR OR 1040NR-EZ
What do I file if I have a
scholarship I must pay tax on
and can also claim a tax treaty
benefit on that scholarship?
File Form 8843 and
Form 1040NR OR 1040NR-EZ
What do I file if I have an
assistantship stipend?
File Form 8843
AND maybe
Form 1040NR OR 1040NR-EZ
What about F-1/J-1
students and J-1 scholars
who earned income in
2014?
They must file Form 8843
AND maybe
Form 1040NR OR 1040NR-EZ
More Tax Forms
• W-2: Wage and Tax Statement
• 1042-S: ��Foreign Persons U.S. Source
Income Subject to Withholding�� form
– Normally used to report income covered by a
tax treaty
• 1040NR: U.S. Non-resident Alien Income
Tax Return
• 1040NR-EZ: U.S. Income Tax Return for
certain non-resident aliens who have no
dependents
More Tax Vocabulary
• Withholding:
– U.S. income tax automatically taken from your
paycheck
• U.S. Source Income:
– All income, gain or loss from U.S. sources
Forms W-2 & 1042-S
•You could have a W-2 or 1042-S or both of
these forms.
•The form was prepared by your employer and
mailed to you.
•You do not write anything on this form.
•You use this form as a reference when you
prepare your income tax return.
•When finished, you attach this form to your
income tax return.
SAMPLE W-2 FORM
Form 1042-S: Compensation
Used for 1040NR-EZ Example
Filing Requirement
You do not need to file Form 1040-
NR or 1040NR-EZ for 2014 if:
1. You have only taxable U.S. Source Wages
that were less than $3,950
AND
2. You don��t need to claim a refund of over-
withheld taxes.
How do I file a non-
resident income tax return
(Form 1040NR or 1040NR-EZ)?
First, learn the following tax vocabulary
. . .
More Tax Vocabulary
•
Standard Deduction: standard amount that
individuals may subtract from income before
calculating taxes owed
•
Itemized Deductions: allowable amounts that
individuals may subtract from income before
calculating taxes owed
–
Examples: charitable contributions, state & local
taxes withheld, etc.
•
Note: No one can have both a standard deduction
and itemized deductions. You have to choose one.
PLEASE NOTE
• Unless you are an Indian student, you
are only eligible for some Itemized
Deductions and a Personal Exemption.
•
Only Indian students are eligible for
a Standard Deduction
and a Personal
Exemption.
More Tax Vocabulary (cont.)
•
Personal Exemption: amount
deducted from income for yourself
and/or your dependents
For 2014, the amount is $3,950
Are there any exemptions
for spouses and children?
Spousal Exemptions available
for some Non-Residents
• Married individuals from Canada,
Mexico or South Korea
• Married individuals who are students
and are from India
Dependent Exemptions
for some Non-Residents
• Only individuals from Canada, Mexico or
South Korea can claim children who live
with them as dependents.
• Individuals from Canada and Mexico can
also claim children who don��t live with
them as dependents.
• Students from India may be able to claim
exemptions for children born in the U.S.
Is any non-resident
income exempt from
taxes?
Yes, but only some categories
of income . . .
Non-Resident Income Exempt
from Taxes
(Not connected with a trade or business)
Interest:
• Bank Deposits (including Certificates of
Deposit)
Tax Treaties
Many countries have Tax Treaties with
the U.S. that allow their residents to
earn some money while temporarily in
the U.S. without being subject to
income tax on those earnings.
See IRS Publication 901 for details.
Tax Treaty
People��s Republic of
China
Tax Treaty
India
Which non-residents can
use Form 1040NR-EZ?
• Individuals who do not claim any dependents
• Individuals whose taxable income is less than
$100,000
• Individuals who do not claim any itemized
deductions (except state and local income tax)
• Individuals who received only wages, tips and
scholarship or fellowship grants
• Miscellaneous other reasons (see Publication 519)
Let��s look at the
steps for completing
Form 1040NR-EZ
(Example of Chinese student��s
Form 1040NR-EZ)
FORM W-2
Used for 1040NR-EZ Example
FORM W-2
Used for 1040NR-EZ Example
Form 1042-S: Compensation
Used for 1040NR-EZ Example
Form 1042-S: Scholarship
Used for 1040NR-EZ Example
Form 1099-G
Prior Year State Refund
New York State no longer issues Form 1099-G
for your previous year��s state tax refund.
If you do not have your income tax records from
last year and do not know if you received a NYS
refund, you may call the 1099-G Hotline at 518-
457-5181 and ask a department representative
for that information.
Tax Treaty
People��s Republic of
China
Form 1040NR-EZ
Form 1040NR-EZ
From Form 1042-S ($5,000 Wages &
$3,000 Scholarship)
From Forms W-2
Box 1 Wages, etc.
State Income Tax
Refund from last year.
Note: Indian students
should leave this blank.
From Forms W-2 Box 17
State Tax Withheld.
Students from
India put
Standard Deduction
amount of
$6,200 and
write on dotted line
��Standard Deduction
Allowed by Treaty��
Personal Exemption
amount of
$3,950
1040NR-EZ 2014 Tax Table
Tax Tables for
Form 1040-NR EZ can be
found on page 23 in
Form 1040-NR EZ
Instructions booklet
www.irs.gov/pub/irs-pdf/i1040nre.pdf
Form 1040NR-EZ
Add all Box 2 amounts
from Forms W-2 and/or
Forms 1042-S Box 7
Tax From Tax Table
Form 1040NR-EZ (cont.)
Form 1040NR-EZ (cont.)
Students from India would
complete this section for
the Standard Deduction
using Treaty Article 21(2).
The amount is $6,200.
Enter SIDN on 1040NR-EZ
S14011387
PTIN= S14011387
When do I file
a non-resident
income tax return?
The Filing Deadline is
April 15, 2015 or June 15, 2015 with
an Extension
If you are filing
Forms 8843
AND 1040NR/1040NR-EZ
June 15, 2015
If you are required
to file
ONLY Form 8843
Where do I file
non-resident
income tax returns?
Internal Revenue Service
Austin, Texas 73301-0215
Remember!
Additional Issue
for
Discussion
Social Security and Medicare
Taxes were incorrectly
withheld from my wages.
What can I do?
FIRST,
Contact your Employer.
Ask for a Refund.
If they refuse, then file a
claim for a refund with the
IRS. Use Form 843 to do this.
Claiming a Refund of Social Security and
Medicare Tax from IRS
Suggested Explanation
Additional Statement
• If you cannot obtain reimbursement from the
employer, you will need a signed statement
from the employer. It should indicate you
have not authorized them to file a claim, nor
have you been reimbursed by the employer
for the amount over-withheld.
Attach statement to Form 843
Attachments to Form 843
F-1 Students
•
Copy of W-2
•
Copy of Form I-94
•
Copy of your valid entry
visa
•
Copy of Form I-20
•
If on OPT, copy of your
EAD Card
•
Form 8316
•
Copy of 1040NR-EZ
•
If you changed your visa
category, copy of Form
I-797
J-1 Exchange Visitors
•
Same as student except
•
Copy of DS-2019 (instead
of Form I-20)
Where do I mail Form 843 to?
File the claim, with attachments, to the
IRS Center where the employer��s returns
were filed.
For New York State:
Internal Revenue Service
Cincinnati, OH 45999-0005
Forms and Publications
ON THE WEB
www.irs.gov
www.buffalo.edu/intlservices
PHONE ORDERS
1-800-829-3676
IRS Resources
• IRS Website:
–
http://www.irs.gov/Individuals/International-
Taxpayers/Foreign-Students-and-Scholars
• IRS International Customer Service:
267-941–1000
Adding the Site
Identification Number
(SIDN)
Enter S14011387 in the PTIN box
of the Form 1040NR-EZ.
Enter SIDN on 1040NR-EZ
S14011387
PTIN= S14011387
Thank You For Coming!
