Anyone that is a resident of another country that enters the US and has not met Substantial Presence. There are many factors that are used in determining residency status for tax purposes.
The University uses a program called Sprintax Calculus. It is an online program that employees/students complete. Based on the information gathered, we determine if the person is a nonresident or resident for tax purposes.
This is dependent on the Immigration Status, along with other factors. Not every nonresident is eligible for all types of payment.
No, once the immigration status expires, the person must no longer work. Paperwork extending the immigration date should be submitted prior to expiration date to avoid any lapse in payment.
Yes, a nonresident must pay the same taxes as a U.S. resident. There are some exceptions based on Immigration Status, length of stay in the US, previous visits, and country of residence.
Per IRS Publication 519, www.irs.gov, nonresidents are only able to claim single or married filing separately on their W-4 Form. Residents of Canada, Mexico or South Korea, as well as students from India, may claim additional withholding allowances on their W-4. They still may only claim Single or Married; but withhold at the higher single rate.
- Residents of Mexico and Canada can claim spouse if the spouse had no gross income or cannot be claimed by someone else as a dependent. To determine if someone qualifies as a dependent, they must use the same rules as US citizens.
- Residents of South Korea have the same rules except, 1) the spouse or children must live with them in the US some time during the year, and 2) The additional deduction for the exemptions must be prorated based on the ratio of the alien’s U.S. source gross income effectively connected with a U.S. trade or business for the tax year to the alien’s entire income from all sources during the tax year.
- Students from India can claim a spouse if the spouse had no gross income or cannot be claimed by someone else as a dependent. They can claim exemptions for each of your dependents not admitted to the United States on "F-2," "J-2," or "M-2" visas, if they meet the same rules that apply to U.S. citizens.
No, those that have become Resident Aliens for tax purposes, those on a H1-B, TN or O-1 immigration status and Permanent Residents all may complete their W-4 as a US person.
Yes, an F-1 is always a student whereas a J-1 is an exchange visitor and there are different J-1 types (examples are: Professors, scholars, short term scholars, Research Scholars, Students, Trainees, Teachers, Specialists, Alien physician, Nannies/Au pairs, and Camp counselors).
Possibly, taxes are based on length of time a nonresident is present in the U.S., treaty availability, and W-4 withholding allowances.
J-1 and F-1 students are both exempt from FICA for 5 years from date of entry into the US. Other J-1 Visa types are exempt from FICA for 2 years. Also, J-1 non-student status can change from FICA exempt to FICA subject and back based on their time in the US.
No, with an exception for those claiming a Federal Tax Treaty. These employees may not claim exempt from state tax during the treaty period.
If an employee/student changes status, they may no longer qualify for a tax treaty. Treaty exemption is usually based on the original purpose in entering the US. Also, some countries don’t have treaty agreements for all Visa types.
The nonresident should update their Sprintax Calculus record and submit the proper documentation to the Payroll Operations office. They will use the User ID and Password they created when they originally completed Sprintax Calculus. If they cannot remember their password, there is a link available on the Sprintax Calculus login screen that will send an email with a link to create a new password. The Sprintax Calculus record should be updated immediately after the status change (within 10 days). ISS also sends a list each month with immigration status changes. Not updating status in a timely manner can mean tax owed.
Yes, IRS Publication 901, US Tax Treaties at www.irs.gov. The publication contains complete information on countries with U.S. tax treaties and who is eligible to claim a treaty.
Unfortunately, no. There is no one on campus that can assist with completing tax forms. Anyone with questions should contact the IRS or a financial advisor. We do offer Sprintax Calculus Tax Prep to assist nonresidents in completing their tax returns.
A student that is not working only needs to complete Sprintax Calculus if a portion of their Scholarship/Fellowship is non-qualified (taxable). If Sprintax Calculus is completed by a student that will not have taxable Scholarship/Fellowship, there will be no tax implications.
Any part of a scholarship that is non-qualified (exceeds the cost of tuition and mandatory fees).
- For taxable wages/compensation (income earned for work performed), the nonresident will receive a Form W-2.
- If there is income exempt under a tax treaty, the nonresident employee will receive a Form 1042-S.
- For taxable scholarship/fellowship, a 1042-S will be issued. For all other types of payments, a 1042-S will be issued.
The Form W-2 is available through UAccess > Self Service > Payroll and Compensation > View W-2/W-2c Forms. The 1042-S Form is available after logging in to Sprintax Calculus.
The University of Arizona does not facilitate the US-Canada income tax treaty as it has a total income dollar limit. The US-Canada income tax treaty limits your total income in the tax year to $10,000.00. If your income is $10,000.01 or more, the entire amount of income is taxable. Wages, interest, dividends, scholarship, and royalties are a few examples of income that would be reported as part of the $10,000.00 income limit.
The University of Arizona has taken a conservative route in making this decision. The University feels it is better to withhold tax during the calendar year, rather than the students/employees possibly owing taxes to the IRS at the end of the year.
Students/employees may be eligible for a refund by claiming the treaty on their income tax (1040-NR).
The University of Arizona has taken a conservative route in making this decision. The University feels it is better to withhold tax during the calendar year, rather than the students/employees possibly owing taxes to the IRS at the end of the year.
Students/employees may be eligible for a refund by claiming the treaty on their income tax (1040-NR).