Federal Tax
Information
Session
For
International
Scholars
Agenda
 Tax
Basics
 Forms You RECEIVE
 Forms You COMPLETE
 Tax Residency Status
 Tax Filing Information for Non-residents
 Treaty Information
 Filling out the Tax Returns
 Completing the Process
 State Tax Issues
Tax Basics
DO I HAVE TO FILL OUT TAX
FORMS? Aahhh!
No Matter What You Have Heard…
 All “tax non-residents” are legally required
to file at least one federal income tax form
for each year they are in the U.S. (by April
of the following year)
 Everyone
should copy and keep files for 7
years (or until you become a permanent
resident, if applicable)
What happens if I don’t?
 You may be overpaying your taxes (i.e.,
giving away your hard-earned money)
 Non-filing of taxes may affect a future
application for U.S. Permanent
Residency (i.e., “green card”)
 If you owe money, you could be subject
to substantial monetary fines
 In extreme cases involving fraud, you
could lose your legal immigration status
in the U.S.
Which Income Taxes?
 Federal
 State
 Local
(not in Albuquerque)
 If you have income you are normally
responsible for completing tax forms for
ALL relevant governments
 This presentation only covers FEDERAL
(US) taxes collected by the Internal
Revenue Service (IRS) with some state at
the end
3 Things to Remember:
1)This is NOT a conspiracy against you! (It’s
just a pain for everyone!)
2)The rules are NOT logical!
3)YOU are responsible for doing it correctly
and YOU suffer the consequences even if
you were misinformed. This is more unfair
for internationals as very few people know
non-resident tax laws (including IRS)
Who Is This Presentation For?
 International
Scholars: Researchers,
Teachers, Medical Residents in J-1 Scholar
status (may be students in home country,
but are not full-time students here)
 Dependents:
J-2 status here with the
scholar and had no income. Most
dependents CANNOT be claimed, but if so
will need an SSN or ITIN# (requires form
W-7 and supporting documents)
Other Presentation Information
 For
scholars with income typical at UNM. If
you have income from other sources you
should seek professional tax advice from a
qualified accountant
 Rules
for students and scholars are different
 Special
Cases: Anyone whose total stay will
be less than one year; some special treaties:
Canada, Korea, Mexico, China (we will
discuss these at the end)
What happens if I have questions later?
Come to the Tax Volunteer Site!
"Volunteers in Tax Assistance" (VITA) Site
Volunteers will be available to help you:
No income:
Wednesdays 2 – 4:30, March 18–April 8
With Income:
Fridays from 2 – 4:30, from March 20-April 10
WHERE: Language Learning Center, Ortega
Hall, 1st floor..
You Can Also Consult:


Internal Revenue Service (IRS): www.irs.gov
or call 267-941-1000, Press 4 and then 4 again
for an International Tax issue for individuals. Tax
treaties and forms are online.
Commercial sites: www.sprintax.com,
www.arcticintl.com/cintaxorder.htm,
www.thetaxguy.com offer information and
paid tax return preparation

Residents for Tax Purposes: Go to CNM
website for appointment with the Resident tax
volunteers, or seek paid preparers
Overview of Tax System:

U.S. tax system = Employer “withholding” +
individual “reporting” at end of year. They
take money out based on forms you fill out
(W-4, 8233)

At year end YOU need to do the accounting;
if the calculation was incorrect then either
you will owe money or get it back

If you worked at UNM all year, completed
employment forms correctly, and your
situation did not change, the tax withheld
should be “near” correct
Forms you RECEIVE
Copies to be sent to IRS with
your tax returns
Forms From Employer/School
W-2: lists wage income and tax taken for
federal, state, and local governments (if
applicable); must be sent to you by 1/31
1042S: lists scholarship and treaty income;
must be sent by 3/15
1098T: lists school tuition paid; cannot be
used as deduction by tax non-residents
This information is also sent to IRS
Gross Earned Income
Money taken out of your pay
Box 1 = Wages
Box 2 = Federal Tax Withheld
Box 17 = State Tax Withheld
Non-residents should not have amounts taken in 5 &6
Income Type
(key
attached)
Gross
Income
Federal
tax taken
Box 1 = Income Code/Type
Box 2 = Income exempt from tax
Box 7 = Federal Income tax withheld
Box 23 = State Income tax withheld
State tax
taken
Other Forms You May Receive
1099-INT: Interest report (Bank sends to
you if over $10)
1099-DIV: Dividend report (Financial
institution sends to you – if you have
this you will use 1040NR)
1099-MISC: Honoraria or contractor
income report
This information is also sent to IRS
Forms you COMPLETE
Make copies for your files!
Forms You Send to IRS
8843: Must be completed by all F and J
students, scholars, and dependents who
are “tax non-residents”
This form is also called, “Statement for
Exempt Individuals and Individuals with a
Medical Condition”
Forms You Send to IRS
(Cont’d)
1040NR: “U.S. Nonresident Alien Income
Tax Return”
OR
1040NREZ: “U.S. Income Tax Return for
Certain Nonresident Aliens with No
Dependents”
Forms for all tax non-residents with U.S.
income; also called “Tax Returns” (“Return” 
you get money back)
Important Tax Treaty Form
8233: Must be completed and given to the
UNM payroll office every year if you want to
benefit from a tax treaty in advance (i.e., you
don’t want them to take extra money from
each paycheck)
You can still get the benefits of any treaty at
the end of the year even if you did not
complete this form.
IRS Information/Publications
Publication 519: U.S. Tax Guide for Aliens
Publication 901: U.S. Tax Treaties
These publications have additional
information for those with unusual situations
or for whom a tax treaty exists between the
U.S. and the country of permanent
residence
Tax Residency Status
Am I a Resident or Non-resident
for Federal Tax Purposes?

Tax residency determines your basic obligations
under U.S. “federal” tax law (state is different)

You CAN be a “tax resident,” even if you are not a
"permanent resident" of the US (green card)

If you are a resident taxpayer you must pay federal
income tax on your worldwide income. However,
you do not have to file a "tax return," unless your
worldwide income exceeds a certain amount (This
year: $10,150 if single and $20,300 if married)
Resident or Non-resident for
Tax Purposes? (Cont’d)

If you are a nonresident taxpayer, you pay
federal income tax only on income you receive
from U.S. sources, but you must file an annual
income tax form, even if you had no income

Most J scholars at UNM are tax nonresidents

If you were in a status other than J since your
arrival, please see IRS pub 519, U.S. Tax Guide
for Aliens you may be “Dual Status”
Residency Test for Scholars
SCHOLARS (J-1), in the 6 years prior to tax year 2014
(2008-2013), during how many calendar years were you
present in the US on an J, Q visa?
(Even one day of presence counts )
2 or fewer of the
previous 6 years
More than 2 of the
previous 6 years
You are probably a non-resident for
tax purposes
You are probably a resident for tax
purposes
(If you entered the US for the first time
after 12/31/12 this is you)
(If you entered the US for the first time
before 1/1/2013 in J status and
haven’t left this is probably you)
More Info for Scholars

If you have only 3 yrs of presence and your
foreign employer paid all of your
compensation, you may still qualify to be a
non-resident (you will need form 8840)

Even if you were a tax resident you may still
be able to benefit from a tax treaty for 2014
(see IRS Publication 901)!
Info for Scholars NOT in J Status

If you are on an H-1 visa and arrived in the U.S.
in 2013 or earlier, you were a resident in 2014
(but you may still be able to benefit from a treaty)

If you are on an H-1 visa and arrived in the U.S.
in 2014, or if you are here on any type of visa
other than H or J, please see the discussion of
tax residency and non-residency on pp. 4-11 of
IRS Publication 519, U.S. Tax Guide for Aliens
Tax Residents
“Residents for tax purposes” will need to go
elsewhere for tax information
 You would file: 1040EZ OR Form 1040A OR
Form 1040 and other forms depending on
your situation; if a treaty applies, you
complete form 8233 also (we can help)
 Get help from the resident volunteers at CNM
 You are subject to the Affordable Care Act
requirements of having health care all year!

Tax Residents

Those who were single and earned less than
$10,150 worldwide income in 2014 (or married
and earned less than $20,300) do not have to
file a federal tax return, but may want to get a
refund if taxes were taken

Remember, that as a tax resident, you can
claim education credits for tuition that you paid.
To do so, you will need to contact the UNM
Bursar’s office to ask for a 1098-T form to get
these credits on your resident tax return.
Filing Information for
Non-Residents
Which federal forms do
TAX Non-residents fill out?
Form #
Who Completes?
8843
ALL non-resident students and scholars and their dependents. If
you did not have any US income you ONLY need to complete this form
1040NR
If you received money from a US source, you also MUST complete
form 1040NR if:
a.Your income was $100,000 or more, OR
b.You had dividend, capital gains or other US income that his not wage
or scholarship
YOU MAY ALSO WANT TO COMPLETE FORM 1040NR IF:
c.You were married and you can claim your spouse (you can claim an
exemption for your spouse ONLY if your spouse did not work AND you
are from Canada, Mexico or Korea) (for US-born children ask)
OR IF:
d. You can claim educational, travel, or living expenses*
1040NREZ
If you received money from a US Source and none of the conditions for
1040NR above apply fill out this form with 8843
8843
Every Tax Non-resident fills out
this form, even dependents
8843 Student Sample
SSN or ITIN otherwise write “None”
Number of days
you were in
Scholar status
Sign here if no tax return
No Income?
 If
you had no US income in 2014 and you
are a non-resident you are DONE!
 Make a copy for your files and mail before
June 15, 2015
 If you are leaving the US you can find this
form in January at www.irs.gov under form
8843!
Mailing Address
Internal Revenue Service Center
Austin, Texas
73301-0215
Have Income???
Deductions and Exemptions to Income
Remember you will never get back
more than they took, so there is no
need to claim these if you will get all
your money back
Can I deduct living expenses?
Scholars can only deduct travel and living expenses
if you are a tax nonresident and your entire
program in the U.S. lasts less than one year (365
days)
If this applies to you, you may be able to treat your
stay in the U.S. as a "business trip" and deduct your
airfare, rent, local transportation expenses and part
of a daily allowance for food from your income. If
you will be in the U.S. for a total of less than one
year and your expenses are more than 2% of your
income, get Form 2106 from the IRS website,
complete it and list your expenses on page 3, line 7
of form 1040NR.
NO NEED IF YOU GET ALL YOUR MONEY BACK!
Can I Deduct Moving Expenses?
 Scholars
who will be in the U.S. for more
than 365 days may be able to deduct
moving expenses (including one way
airfares for you and your family)
 If
you moved to or from Albuquerque to
accept employment during the year look
at IRS form 3903 to see if this applies to
you (enter on Line 26 of form 1040NR)
Income types we WILL cover:
 Wages
from any U.S. job, on-campus or
off-campus, that you had in 2014 (Included
in this category is all income that your
employer(s) reported to you on Form W-2
or 1042S)
 Bank
interest (Not considered U.S. source
income for nonresidents so nontaxable)
Income types we will NOT cover
(These are also subject to tax)
Dividends
or capital gains from U.S. mutual
funds, stocks or bonds
Any
other income (such as rent, royalties,
copyright earnings) from U.S. sources
If
you had these types of income you will need
form 1040NR and you may want to seek
professional advice in preparing your return
Treaty Information
General Treaty Information
 Some
countries have tax treaties with the
U.S. which save you money on your
federal income tax. You can get the treaty
benefit even if you did not complete the
8233 in 2014
 Treaty
benefits depend on country of last
tax residence, not citizenship
 Benefits
are different for each country and
depend on your U.S. activity (e.g.,
teaching or research) and type of income
Scholar Treaty Information
 Most
treaties allow a scholar to exclude
the entire University salary from federal
taxation for a period of 2 or 3 years from
the date of arrival in the U.S.
 But
beware!: some treaties provide no
benefit at all if you stay in the U.S. more
than two years and back taxes may be
applicable (UK, Lux, NL, India)
Scholar Treaty Information
 The
numbers or Roman numerals in the
third column identify the relevant treaty
article and paragraph numbers (you will
need these for your income tax return)
 Also
note any letters next to the name of
your countries; there is a key at the end of
the chart
Scholar Tax Treaty Summary
Country
Maximum Presence
Amount
Article #
Special Restrictions* see below
Armenia
2 yrs.
No limit
VI(1)
b, d
Azerbaijan
2 yrs.
No limit
VI(1)
b, d
Bangladesh
2 yrs.
No limit
21(1)
Belarus
2 yrs.
No limit
VI(1)
b, d
Belgium
2 yrs.
No limit
19(2)
b, e
Canada
No limit
$10,000
XV
f
China (PRC)
3 yrs.
No limit
19
b, e
Czech Republic
2 yrs.
No limit
21(5)
b, c, d
Egypt
2 yrs.
No limit
22
b, e
France
2 yrs.
No limit
20
b, c
Georgia
2 yrs.
No limit
VI(1)
b, d
Germany
2 yrs.
No limit
20(1)
b, e
Greece
3 yrs.
No limit
XII
Hungary
2 yrs.
No limit
17
b
Scholar Tax Treaty Summary
India
2 yrs.
No limit
22
a, b
Indonesia
2 yrs.
No limit
20
b, c
Israel
2 yrs.
No limit
23
b, e
Italy
2 yrs.
No limit
20
b
Jamaica
2 yrs.
No limit
22
b, c
Japan
2 yrs.
No limit
20
b, d
Korea
2 yrs.
No limit
20
b, d
Kyrgyzstan
2 yrs.
No limit
VI(1)
b, d
Luxembourg
2 yrs.
No limit
21(2)
a, b
Moldova
2 yrs.
No limit
VI(1)
b, d
Netherlands
3 yrs.
No limit
21(1)
a, b, e
Norway
2 yrs.
No limit
15
b, d
Pakistan
2 yrs.
No limit
XII
Scholar Tax Treaty Summary
Philippines
2 yrs.
No limit
21
b, e
Poland
2 yrs.
No limit
17
b, e
Portugal
2 yrs.
No limit
22
b, c
Romania
2 yrs.
No limit
19
b, e
Slovak Republic
2 yrs.
No limit
21(5)
b, c, e
Slovenia
2 yrs.
No limit
20 (3)
b, d
Tajikistan
2 yrs.
No limit
VI(1)
b, d
Thailand
2 yrs.
No limit
23
b, e
Trinidad/Tobago
2 yrs.
No limit
18
b, d
Turkey
2 yrs.
No limit
20 (2)
Turkmenistan
2 yrs.
No limit
VI(1)
b, d
Uzbekistan
2 yrs.
No limit
VI(1)
d, e
United Kingdom
2 yrs.
No limit
20A
a, b
Venezuela
2 yrs.
No limit
21(3)
b
Special Restrictions
a tax is retroactive if the scholar remains past 2 years
b If within the treaty time limit, the scholar may claim tax treaty benefits even if he/she qualifies as a resident for tax
purposes. Not applicable for permanent resident or immigrant status
c may only claim treaty exemption once in a lifetime
d if claiming back-to-back student/scholar, 5 year total limit on treaty benefits
e student & teacher benefits may not be claimed back-to-back without re-establishing home country residency
f scholar is taxable on full amount if income is over $10,000
Filling out the Tax Returns
Completing the “Tax Returns”
 Always
look to complete the easiest form
first. If you can get all your money back,
there is no reason to complete the long
form
 We
will review form 1040NREZ; you can
come to the VITA site to complete the forms
using the software or do it on your own
Form 1040NREZ
 Complete
this form first unless you have
non-wage income
 If you get all your money back, you will
send this form
 If you have other income or deductions
(such as contributions to US charities), the
1040NR may help you get a larger return
Earnings Information
 Look
carefully at all W-2 and 1042S forms
NOW: is all your income included here?
 Is
there any treaty income listed on the W-2
that should have been on the 1042S?
 Do
you have any questions about what is on
these forms?
 Contact
payroll: payroll@unm.edu
Earnings Information
 Add
all of your earnings income together from
these forms (interest and dividend income are
separate)
 Subtract
all of the income that should have
been covered by the treaty
 For
scholars, if you were covered by a treaty
for the whole year, your taxable earnings
income should have been “0”
Earnings Information
 The
remainder is your EARNED income: this
will go on the wages line of the tax return
 The
treaty income will all go on the treaty line
(s) of the tax return
1040NREZ Student Sample
Use a US address unless you won’t be here through June
1040NREZ Scholar Sample
1040NREZ Scholar Sample
4
4
4
4
1040NREZ Scholar Sample
1040NREZ Scholar Sample
1040NREZ Scholar Sample
Gross Earned Income
Money taken out of your pay
Box 1 = Wages
Box 2 = Federal Tax Withheld
Box 17 = State Tax Withheld
Non-residents should not have amounts taken in 5 &6
Income Type
(key
attached)
Gross
Income
Federal
tax taken
Box 1 = Income Code/Type
Box 2 = Income exempt from tax
Box 7 = Federal Income tax withheld
Box 23 = State Income tax withheld
State tax
taken
1040NREZ Scholar Sample
1040NREZ Scholar Sample
1040NREZ Scholar Sample
$3,950
1040NREZ Scholar Sample
1040NREZ Scholar Sample
1040NREZ Scholar Sample
Amount to
be refunded
Amount Owed
Enter UNM Site ID#
Completing the process
 Copy
 Mail






all documents for your files
Together:
8843
1040NREZ
Copy of W2
Copy of 1042s
Any other earnings forms
Any payment you owe
Mailing Address





If you do NOT need to pay any additional federal tax,
mail to:
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
If you DO NEED to pay additional federal tax mail with
payment to:
 Internal Revenue Service
 P.O. Box 1303
 Charlotte, NC 28201-1303
1040NR
Come to the volunteer hours:
 For scholars with dependents from
Canada, Mexico, or South Korea who
cannot get all their money back from
completing form 1040NREZ
 For scholars with income other than wage
 For scholars with income more than
$100,000
 For scholars who have other deductions
(charities, losses, etc.)
NM State Tax
 Once
you complete your federal tax you
can complete the state tax forms
 You will need the “Adjusted gross
income”, “Itemized deduction” and
“exemption” amounts to do your forms
(see handout)
 Forms and instructions are on the website:
http://www.tax.newmexico.gov/Individuals/perso
nal-income-tax-forms.aspx
NM State Tax
 People
who reside in New Mexico for more
than 185 days are residents for state tax
 You


can only e-file if you:
You did not have a treaty, OR
If you did have a treaty and all of your nontaxable income was listed on the 1042S
NM State Tax
 If
all your income was exempt by treaty
and was on a 1042S (not a W2) you do
need to file state forms
 If
more than $10,000 of your income was
on a W-2 OR if you had state taxes
withheld and you want the money back,
you will need to file state tax forms
NM State Tax
 If
you will file state tax forms, and you have
a treaty, you should include copies of the
federal forms with your state tax forms
 You
may also want to include a letter
stating that you are a federal tax nonresident and that your income is not
taxable because of the treaty (it would not
hurt to include the relevant text from the
treaty (available at www.irs.gov)
Happy Tax Preparing!!!
Come to our VITA site for help!
No income:
Wednesdays 2 – 4:30, March 18–April 8
With Income:
Fridays from 2 – 4:30, from March 20-April 10
Language Learning Center
Ortega Hall, 1st Floor
Software Program
OR:
 https://trr.windstar.com/
 Access Code: BNCTHSG7SEUN
 You should follow the instructions for
“New” or “Returning” users
Software Program
 You
must read all instructions and enter
days in and out of the US in each tax year
to get through the program successfully
 Once you have completed the information,
you click on “Get Forms”
 You must print out all forms, attach your
earnings statements (W-2, 1042s, etc.)
 Copy and Mail to IRS (instruction sheet on
“Get forms” page has address)