Texas State University International Student Orientation Foreign Student Tax Issues

1. Texas State University International Student Orientation Foreign Student Tax Issues

2. Today’s Presenters from the Payroll and Tax Compliance Office Sally Moss • Meets with all foreign student employees. Debbie Jones/Carmelita Mendoza • Meets with all foreign students with room & board scholarships, or those that receive prizes or awards.

3. Topics to be Covered • Types of Student Visas • U. S. Income Tax Withholding on Income Earned by Foreign Students • Types of Foreign Student income • Requirements for Foreign Students who Receive Income or Taxable Scholarships • U.S. Tax Filing Requirements for Foreign Students • Contact Information

4. Types of Student Visas • F-1: Issued to foreign students for the primary purpose of studying. The students may be issued limited work authorization on campus. • F-2: Issued to dependents (e.g., the spouse and/or children of an F-1 visa holder). F-2 dependents may be authorized to study but are not authorized to work.

5. Types of Student Visas (continued) • J-1 Exchange Visitor: Issued to an exchange student for the primary purpose of studying. J1 students may be issued limited work authorization on campus. • J-2 Exchange Visitor: Issued to dependents (e.g., The spouse and/or children of an J-1 visa holder). The J-2 dependents are allowed to study and may work with USCIS authorization.

6. U.S. Income Tax Withholding on Income Earned by Foreign Students • NRA (Nonresident Alien) tax withholding: A foreign student is considered a “nonresident alien” for tax purposes, is subject to federal withholding tax rates for nonresident aliens, andis exempt from paying Social Security and Medicare taxes for the first 5 years. • RA (Resident Alien) tax withholding: After residing in the U.S. for more than 5 years, a foreign student may become a “resident alien for tax purposes only”, and would be subject to the same federal withholding tax rates as a U.S. citizen.

7. Types of Foreign Student Income • Employment Income: Income earned by foreign students employed on campus as Student Workers or Graduate Teaching, Research or Instructional Assistants. • Limited to working 20 hours a week during regular semesters • Room & Board Scholarship The portion of a scholarship that pays room & board expenses for a nonresident alien. • Cash Prize or Cash Award Cash prizes or awards received by a nonresident alien may be taxable.

8. Requirements for Foreign Students who Receive Income or Taxable Scholarships • Student workers: All foreign students who receive employment income must schedule an appointment with Sally Moss in the Payroll and Tax Compliance Office to complete required paperwork. • Taxable Scholarship or Cash Award Recipients: All nonresident alien students who receive scholarships for living expenses or cash prizes or awards must schedule an appointment with Carmelita Mendoza to complete required paperwork.

9. Requirements for Foreign Students who Receive Income or Taxable Scholarships(continued) Please bring the following documents to your appointment: • Passport • Visa • I-94 www.cbp.gov/I94 • I-20 or DS-2019 • Social Security card or receipt of filing application for Social Security number

10. Requirements for Foreign Students who Receive Income or Taxable Scholarships(continued) • Tax Withholding: During your appointment, you will learn about tax withholding requirements, tax exemptions, and complete all necessary paperwork. • Tax Treaties: During your appointment we will determine if there is a tax treaty between the U.S. and your country that may exempt your income from federal withholding tax. If so, you will have the option to complete a form which will allow you to take advantage of the tax treaty.

11. U.S. Tax Filing Requirements for Foreign Students • Nonresident aliens who have received taxable income during the prior calendar year must file a U.S. Nonresident Alien Income Tax Return by April 15th each year. • IRS Form 1040NR or 1040NR-EZ • Resident aliens who have received taxable income during the prior calendar year must file a U.S. Individual Income Tax Return by April 15th each year. • IRS Form 1040 or 1040-EZ • All foreign students on campus must file an additional IRS form each year: • IRS Form 8843 • Tax Training available for nonresident alien students: Before the tax filing deadline, the Payroll & Tax Compliance Office will hold a training session for nonresident alien students on how to complete the required U.S. tax returns using Glacier Tax Prep software. It will be available on the International Office website. Nonresident aliens cannot use tax software available online for U.S. citizens or resident aliens (e.g. Turbotax).

12. Contact Information Employment • Sally Moss, Nonresident Alien Tax Specialist and Payroll Services Assistant • Please e-mail or call for an appointment • Phone number: (512) 245-8310 • email: sm15@txstate.edu • Campus Office: J.C. Kellam Bldg (JCK), 5th Floor, Room 516 • Office Hours: Monday – Friday 9 – 11:30 a.m. and 1:30 – 4:30 p.m.

13. Contact Information Room & board scholarships Prizes/awards • Debbie Jones/Carmelita Mendoza • Please e-mail or call for an appointment • Phone number: (512) 245-2543 • email: taxspecialist@txstate.edu • Campus Office: J.C. Kellam Bldg (JCK), 5th Floor, Room 582 • Office Hours: Monday – Friday 9 – 11:30 a.m. and 1:30 – 4:30 p.m.