2012 Non-Resident Alien Tax Filings

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1 2012 Non-Resident Alien Tax Filings Spring 2013 The Colorado College Business Office OMIS

your federal income tax and state income tax liability will be.

2 Overview of the U.S. Income Tax System Your employer withholds from your earnings an estimate of what your federal income tax and state income tax liability will be. At the end of the year, you are required to complete a federal and state tax return to compute your actual liability and mail it to the IRS and state government.

3 U.S. Tax Rules Pertaining to Aliens An alien is anyone who is not a citizen of the U.S., either by birth or naturalization A resident alien is taxed the same as U.S. citizens May also enjoy treaty benefits Subject to tax on worldwide income A nonresident alien is subject to special rules Limited deductions and credit Taxed only on U.S. source income

4 Resident for Tax versus Non-Resident for Tax Permanent Residents are always Residents for Tax.

5 Who Is a Nonresident Alien? A nonresident alien is anyone who Has not been granted permanent resident status by the USCIS (the green card test), and Has not passed the substantial presence test Resident alien for tax purposes does not mean resident for immigration purposes

6 The Substantial Presence Test Generally, if an alien is physically present in the U.S. for 183 days or more during the year, the substantial presence test is met. Exception for exempt individuals An exempt individual does not count days present in the U.S. for the purpose of the substantial presence test, and is therefore considered a nonresident alien An exempt individual is not exempt from paying U.S. tax

7 Determining Tax Residency/Status Substantial Presence Test (SPT) Current Year x 1 = 1 st Previous Year x 1/3 = 2 nd Previous Year x 1/6 = = If the total is LESS than 183 days = NON-RESIDENT ALIEN FOR TAX PURPOSES If the total is MORE than 183 days = RESIDENT ALIEN FOR TAX PURPOSES

8 Examples to SPT If an F-1 Student enters the US on 12/31/04. Their exempt years are She cannot become a resident for tax until 07/03/2009 (183 days but FICA taxes begin 1/1/09). If a J-1 Research Scholar enters the US on 2/1/04. His exempt years are 2004 & He cannot become a resident for tax until 07/03/2006 (but FICA taxes begin 1/1/06). H-1B Employee will begin counting days immediately.

9 Who Is a Resident Alien? A student (F or J visa) present in the U.S. longer than 5 calendar yrs who passes the substantial presence test A teacher or researcher (J visa) present in the U.S. longer than 2 calendar yrs who passes the substantial presence test A nonresident or dual-status alien who is married to a resident at yr end & elects to be treated as a resident for the whole yr

10 Determining Tax Residency/Status Substantial Presence Test (SPT) Exceptions 1.) Students in F or J status are exempt from counting days of presence in the US for 5 calendar years. 2.) Visitors in J-1 Non-Student status are exempt from counting days of presence in the US for 2 calendar years out of the current and past 6. 3.) Residents of Barbados, Hungary and Jamaica may claim resident status regardless of SPT. Exempt years equal zero countable days towards the SPT.

11 Dual Status Individuals/Residency Elections Non-Resident and Resident in the same year. May file a special tax return called a Dual Status Return described in Publication 519. A dual status alien or non-resident married to a U.S.citizen or to a resident alien may elect to file a joint income tax return with his/her U.S. citizen or resident alien spouse. Refer to "Non-Resident Spouse Treated as a Resident" in Publication 519, U.S. Tax Guide for Aliens.

12 Special Tax Rules for Nonresident Aliens Either Form 1040NR or Form 1040NR-EZ Must be filed by NR aliens on F, J, M & Q visas who have any income subject to tax Due April 15 if taxpayer had taxable wages Any exempt individual must file Form 8843 even if they have no income (Form 8843 only is due June 15, 2013) Sent to special address: Department of the Treasury, Internal Revenue Service Center, Austin, TX

13 Social Security and Form 843 Nonresident aliens on F-1 and J-1 visas do not pay social security tax (FICA) Resident aliens do pay social security tax How to get a refund? If you are not supposed to pay, ask your employer for a refund If the employer refuses, file Form 843 with the IRS Form 843 and instructions can be found at

14 Forms you need to submit for federal taxes: 1040NR-EZ Form 8843 Form 1042-S (if applicable) W-2 Due April 15, 2013

15 Forms you need to submit for state taxes: Form 104 Copy of your Federal Tax Form (1040NR- EZ) W-2 Due April 15, 2013

16 Tax Forms

17 W2 Form Employment/Compensation Income To receive payment, you must provide a service. If all income was exempted under a tax treaty, NO W2 will be issued (unless FICA/Medicare taxes are withheld).

18 1042-S Form (Non-Residents for Tax Only) Scholarship Income Tax Treaty Benefits (applies to Residents for Tax Also)

19 Federal Forms for Filing 1040NR Long Form. Used for people who itemize. 1040NR-EZ Easy form Statement For Exempt Individuals and Individuals with a Medical Condition - You were temporarily in the United States as a teacher or trainee on a "J " visa. - You were temporarily in the United States as a student on an "F or J visa. State Form: Form 104

20 Federal Tax Filing Deadline for reportable income is April 15, 2013 Deadline for form 8843 only June 15, 2013

21 Resources and Miscellaneous Information

22 Resources for Federal Filing IRS: (800) IRS forms and publications may be accessed through their web site at: or ordered through the IRS toll-free forms line at: which is available 24 hours a day, 7 days a week, with 7-10 days delivery time.

23 Resources For Colorado State Filing Forms, further information and customer service: ome.asp.

24 CC Tax Questions Business Office Payroll Spencer Center #312 (719)

25 Questions? Thank you for your time!

Foreign Student and Scholar Volunteer Tax Return Preparation. VITA Training 1

Foreign Student and Scholar Volunteer Tax Return Preparation VITA Training 1 e-learning Options & Understanding Taxes Website http://www.irs.gov/app/understandingtaxes/index.jsp VITA Training 2 Foreign