DISCLAIMER: The following information is general guidance for the benefit of Tufts international students, scholars, and employees. The International Center is not authorized to provide specific tax guidance on individual tax situations. Additionally, the information below pertains to US federal government and state income taxes, not other taxes such as sales tax, property tax, or local excise taxes, such as taxes and fees on automobiles.
US Income Tax Basics
All international students, scholars, and employees have US income tax obligations. Knowing and following these tax obligations is essential to maintaining valid immigration status.
Income tax issues come up at two primary times:
When starting a job, or when receiving other taxable US income such as a taxable stipend (tax withholding). The US has a "pay-as-you go" tax system (see below), which means that income taxes can be withheld from you part when you start a job (or when receive other types of taxable income, such as a taxable scholarship or fellowship). In these situations, your employer or income provider may be required to withhold some of your income as taxes. See the information below about the "pay as you go" tax system. You may need to complete a Foreign Tax Analysis as well as other paperwork that determines how much taxes are withheld from your pay or stipend.
During the annual tax filing season (tax return filing). By April of every year, you may need to file a tax return or other tax form to report your tax situation for the previous tax year. For example, the tax year January 1 - December 31, 2022, the tax filing season starts in 2023 with a tax filing deadline of April 15. During the tax filing, you will report how much income you earned during the tax year, how much in tax was already withheld, and calculate whether you have a tax bill (you owe more tax) or can get a tax refund (you paid more tax than you owe).
Other Key Tax Concepts
Tax Resident versus Tax Non-Resident. The US federal government differentiates between tax residents (who are taxed in the same way as US citizens and permanent residents) and tax non-residents. Most international students and scholars will be non-residents, at least for their initial period of study or stay in the US. For example, F-1 students are usually considered tax non-residents for the first five years of physical presence in F-1 status. Tax residency will affect the definition of what counts as a taxable income, your tax benefits (including eligibility for tax treaty benefits), and how much tax may be withheld from your pay or other taxable income.
For Tufts employees (including student, staff, and faculty) who will be working or receiving taxable income from Tufts, click here to complete a Foreign Tax Analysisto determine your tax residency and eligibility for tax treaty benefits
Federal and State Income Taxes: US income taxes can be at both the US federal (national) level as well as the state level. While the US federal government and states usually follow the same tax calendar, there are often different tax rules between the federal government and different states. For example, US federal taxes are managed by the Internal Revenue Service (IRS) while the Massachusetts Department of Revenue manages Massachusetts state tax requirements.
US Tax ID: Everyone with taxable income must have a tax ID number. For international students and scholars, any income based on employment (e.g., on-campus employment, practical training, H-1B employment) requires a US Social Security Number (SSN), which is a lifetime, permanent number. Persons with taxable scholarships that does not involve employment can apply for an Individual Taxpayer ID Number (ITIN). The ITIN is temporary and can be replaced by a SSN if and when eligible for the SSN.
US federal tax laws distinguish between residents and nonresidents for tax purposes. Tax residency affects your level of taxes and your tax benefits, and what kinds of tax forms you need to complete. Some of the differences include:
In general, the US taxes the worldwide income of tax residents, but only the US-source income for nonresidents
There are significant differences in the kinds of benefits and deductions residents and nonresidents can claim
Who are Tax Residents / Nonresidents?
The IRS categorizes all US citizens and lawful permanent residents as tax residents. However, most incoming F and J student visa holders are considered tax nonresidents for the first five (5) calendar years in F or J student status. These five years are lifetime maximums counted from January 1, 1986 onward. For example, an F-1 student who was in the US in F-1 status in 2012 and 2013, and then again in the years 2015 to 2017, would have reached the five years in 2017 (2011, 2012, 2015, 2016, and 2017). From 2018 onward, a different test would need to be used to determine tax residency.
J-1 scholars are considered nonresidents for the first two (2) calendar years in the US. Other visa holders may need to determine tax residency by following IRS guidance for determining tax status.
Once you are beyond the five year / two year limitations, you may need to decide your tax residency by taking two different tests: the "green card" test and the "substantial presence" test. For more information about these tests, go to Chapter 1 of IRS Publication 519.
Tax Treaty Benefits
F-1 / J-1 students and J-1 scholars may be eligible for certain types of tax benefits available under a US tax treaty. A description of current tax treaties between the US and other countries is listed in IRS Publication 901, US Tax Treaties. When reading Publication 901, it is important to realize that each tax treaty is negotiated differently. Not every country has a tax treaty with the US, and the terms of each treaty provide different types of benefits for different groups, such as students, scholars, or others. Tax treaty benefits may be limited by income maximums and/or available for only a limited number of years, and in certain cases, tax benefits may be lost retroactively if your stay in the US and/or your US source income exceeds treaty limits.
If you have tax treaty benefits, you can request that they be applied at the time of tax withholding (see next section on Tax Withholding) or your annual tax filing (see section on Annual Tax Filing). You must have a valid Social Security Number (SSN) when requesting your tax treaty benefits - no other number can be used to claim tax treaty benefits.
Tax Withholding (including W-4 Information)
When you earn income in the US through employment or other types of income-generating sources, your income may be subject to tax withholding. Under tax withholding, your employer (or the entity providing you with US income) is required to deduct taxes from your overall earnings and send those taxes to the IRS (and state tax agencies, if applicable). In addition to employment, certain other types of income-generating activities (e.g., such as certain types of stipends, prizes, or investment income) may be subject to tax withholding.
How much income tax is withheld will depend on your tax residency and your estimated income tax obligation for the year. In addition, some tax nonresidents may have tax treaty benefits that will affect the overall rate (percentage) of withholding on your income.
Tax Withholding and Employment
When you start employment, you may be required to complete forms that will tell your employer how much tax to withhold from your salary. For nonresidents, these include:
IRS Form W-4 withholding allowance certificate: File this form with your employer. F-1 and J-1 students who are within their first five years of student status are usually considered nonresident aliens and should complete Form W-4 using the special instructions for nonresident aliens
IRS Form 8233 to request exemption or reduced withholding based on tax treaty benefits and accompanying Tax Treaty Statement (from IRS Publication 519 Appendix A for students and Appendix B for professors / teachers)
You will receive certain kinds of tax forms from Tufts and/or any other company, organization, or entity that has provided you with US-source income. These forms report your US income for the tax year. You should keep these forms in your permanent tax records. If you notice any errors, contact the employer / agency that issued you the form.
Form W-2 Wage and Tax Statement
January 31 for the previous year
Issued to all employees
Reports wages (salary) and any US federal and state taxes withheld from earnings from employment
Form 1042-S, Foreign Person's US Source Income Subject to Withholding
March 15 for the previous year
Issued to foreign persons or persons presumed to be foreign
Reports various kinds of income, including (1) the amount of wages that was exempt under a tax treaty benefit and (2) the non-qualified taxable amounts of a fellowship or scholarship
In general, the non-qualified taxable portion of a fellowship / scholarship is the amount that exceeds the cost of tuition and fees required for attendance; scholarships for non-degree students are considered taxable in their entirety
Form 1099-MISC, Miscellaneous Income
January 31 for the previous year
Issued to persons receiving miscellaneous income and/or medical and health care payments
Form 1099-INT, Interest Income
January 31 for the previous year
Reports interest income earned, e.g., simple interest from a savings account