• Green Card = Resident – file 1040!
• Substantial Presence – 31 days this year or 183 days over last 3 years
• Exempt are:
– Students with F, J, M or Q visas – 5 years exempt
– Family of students
– Teacher/researcher with J or Q visas – no more than
2 of last 6 years in US
– Exempt years are counted by calendar year – if student comes in December then that counts as a full year!
• They are complicated. List of Codes
• Form 1042-S instead of a W-2 for income exempted by treaty.
• India is the only country allowing students to claim the standard deduction
– most countries allow the personal exemption only.
• Scholarships – Code 15: List of Countries with limited nontaxable living expenses.
• Tuition for Services - taxable
• Code 18: Teaching and Research – 2 to 3 years for visiting professors.
• Does not apply to spouse’s earnings.
• Germany, India, Netherlands, Thailand and UK
– exceed the time limit and lose
ALL benefits!! Should claim no benefit.
• F-1 students must work on-campus only for the first year.
• Spouses of F-1 cannot work.
• Income limits by country.
• Yumiko from Korea earned $4,516 from working at the Case library.
Subject to Tax
Any Withholding should be returned to Yumiko.
• Personal service or non-related income is not covered by the treaty
– except Canada.
• Canada – under 10,000 exempt for NR; over
10,000 all taxable.
• India – Standard Deduction; Could lose Code 18 scholar benefit if over time limit
• China – Treaty is for 3 years though status would switch from Nonresident to Resident.
Third Year Form 8833 with 1040
• Cannot file as Head of Household
• Normally cannot claim family members.
• If they can be claimed then must have an
– similar to a SSN
• Claiming spouses – Canada, Mexico,
South Korea and India
• Married – usually filing separately.
• Cannot claim dependents even if they are
• Exceptions are:
– Canada and Mexico
– South Korea
– India (not F-2, J-2 or M-2)
• May be able to claim CTC and Child Care
Credit but doubtful; Child must be citizen, national or resident alien of US.
• F-2 status – should not be working
• J-2 status – authorized to work and have to pay social security taxes.
• Taxed at higher rate because not effectively connected with US business
– dividends, capital gains, rental income and interest EXCEPT bank interest
• Bank interest is excluded from income – it need not be reported.
• Nonresidents except Indian students are not entitled to the standard deduction
• Itemize state and local taxes – Will be income in the following year if a refund!!
• Charitable Contributions
• Some Job Expenses – Rare
• Student Loan Interest difficult to deduct.
• Education Credits – No (if nonresident alien)
• EITC – No (if nonresident alien)
• Helps exempt a nonresident from future substantial presence test.
• Should be completed by person filing a tax return
• Also, spouse and dependents should each file one too
– even without an ITIN or SSN
• Nonresidential Aliens do not pay Social Security and Medicare taxes.
• The exception is a J-2 working spouse.
• Client should contact employer for a reimbursement. If that doesn’t work then
• File Form 843 including
– Form 8316
Department of Treasury
Internal Revenue Service
Austin, TX 73301-0215