Nonresident Alien Taxation
Anyone receiving payments from a U.S. source, whether they are U.S. residents or internationals are subject to U.S. taxation. There are specific regulations and processes required for determining the tax withholdings for international persons. In certain situations, there could be a tax treaty that may exist to exempt an international person from taxes or there may be regulations that allow a reduction in taxes.
There are four definitions that are important to the international tax process:
Nonresident Alien for Tax purposes
This is defined by U.S. tax regulations as an international person who has not been physically present in the United States for the amount of time required to be treated as a Resident Alien for Tax purposes. The status is determined based on the substantial presence test and the visa type of the individual.
Resident Alien for Tax purposes
This is defined by U.S. tax regulations as an international person who has been physically present in the United States for the amount of time required to be treated as a Resident Alien for tax purposes. The status is determined based on the substantial presence test and the visa type of the individual. Resident Aliens for tax purposes are taxed in the same manner as a U.S. citizen.
This is defined by U.S. immigration laws and generally means any person who is not a U.S. citizen, U.S. national, U.S. resident, Asylee, Refugee or Permanent Resident.
This is defined by U.S. immigration law and generally means any person who is a U.S. citizen, U.S. national, Asylee, Refugee or Permanent Resident.
The Ohio State University uses a secure online international tax compliance software called GLACIER. Glacier captures the information required to determine the actual tax status of an international person. All international persons who are not U.S. Residents and who are receiving payments from The Ohio State University are required to have a GLACIER record. Therefore, a GLACIER record is required even if an international employee, student, scholar or visitor meets the definition of a Resident Alien for Tax Purposes.
As a foreign national, you may already know how daunting understanding your tax obligations can be. That's why the university has provided you with a program called Glacier. Glacier is a web-based computer program that provides a "beginning to end" tax compliance solution. Once the university determines that you are a nonresident alien, you will receive an email to your osu.edu email address directing you to the Glacier website (www.online-tax.net) with a username and password for entry. After asking a few simple questions, the Glacier program will determine your taxation.
The Glacier system does the following:
- Makes tax residency, withholding, and income tax treaty determinations
- Provides all taxation paperwork
- Manages all paperwork
- Maintains individual taxation data and individual tax treaty data
- Provides year-end taxation documents
- Provides a process for completing a Federal tax return online (paper submission of the forms is required)
Throughout the year, international persons should update their individual Glacier record if any of the following changes occur:
- Immigration status (change in visa types)
- Departure date
- Dates present in the United States
- E-mail and home address
- Social Security Number or ITIN
After updating your information, your forms should be re-submitted as instructed.
If you are a nonresident alien and you have not received Glacier information, please email Payroll at Glacier@osu.edu.
If you are a nonresident alien (international student or worker), DO NOT complete the online W-4 on Employee Self Service system. Making changes on the online W-4 may cause an error in your tax withholdings. As a nonresident alien, completing Glacier will provide you with a nonresident Alien W-4 form.
If you have not received your username and password for Glacier, please email your formal first and last name, your OSU ID# and your pay frequency (biweekly or Monthly) to Glacier@osu.edu.
Filing Taxes in the United States
As an international student or scholar the income you earn in the U.S. is subject to taxation. Each year, the Internal Revenue Service (IRS) and the State taxation department require all individuals that earn income in the United States to file a tax return, which is due on April 15 of the following year. As a nonresident alien, you are required to file a federal tax return, Form 1040NR or Form 1040NR-EZ and state tax return Form IT 1040. As an employee of The Ohio State University, you can complete your federal tax return (1040NR-EZ or 1040NR) through the Glacier (Glacier Tax Prep) software.
About U.S. Taxes
The United States has several different sets of tax laws. Federal tax law applies to taxes paid to the United States government. State tax laws apply to taxes paid to the state in which you work and/or live. In some places there may also be local or city taxes. It is important to comply with all federal, state, and local tax laws that apply to you.
The federal and state tax system is based on a graduated tax system, which means that the percentage of tax a person pays is dependent on the amount of income they earn and the number of dependents they have (nonresident aliens can only claim one dependent, unless they are a resident of Canada, Mexico, South Korea or student from India). If you earn a smaller income, you pay a smaller percentage in tax, but if you earn a larger salary, you pay a higher percentage. The local or city taxes (work location) are not on a graduated tax system. Most local taxes are withheld based on a fixed percentage. For example, Columbus taxes are a fixed 2.5 percent.
Residency and Non-Residency for Tax Purposes
U.S. tax law categorizes people as resident aliens or nonresident aliens for tax purposes only, which is not necessarily the same as residency according to immigration law. Resident aliens for tax purposes follow the same rules as U.S. citizens for taxation. For a nonresident alien for tax purposes there are special taxation rules that apply. There are also special rules that apply specifically to F-1 students, J-1 students and scholars and H-1 employees who are nonresident aliens for tax purposes. These tax statuses are significant because filing under the incorrect tax designation may result in taxes owed back to the government. So, it is important to know your status to file correctly. Nonresident aliens for tax purposes are taxed on U.S. source income.
The U.S. Department of Treasury Internal Revenue Service Publication 519 explains the rules used to determine tax residency for those who are not U.S. citizens.
Nonresident alien for Tax Purposes
If you are in F, J or H status and a nonresident alien for tax purposes:
If you received U.S. source income in the current calendar year, you are required to file a federal tax return with the IRS (Internal Revue Service). You must complete and mail IRS Form 1040NR or Form 1040NR-EZ and IRS Form 8843. You must file a federal tax return form even if your employer deducted ("withheld") money from your paycheck for federal taxes. The amount that is deducted from your paychecks is an estimated amount, so you may in fact, owe tax if an insufficient amount was withheld based on the IRS standard amounts. If the estimated amount deducted from your paychecks is higher than what you should have paid based on the IRS standard, you may receive a refund of taxes. Therefore, you must file a tax form to calculate the difference between what you owe and what you paid. Even if a tax treaty was applied to your paychecks during the year and the amount you owe in taxes is reduced or eliminated, you are still required to file a federal tax return with the IRS. You would file IRS Form 1040NR or Form 1040NR-EZ and Form 8843. The GLACIER Tax Prep link on the Glacier system will provide these forms, if applicable. Not filing a tax return is a violation of U.S. tax law.
Filing tax documents each year is an important part of maintaining your immigration status and is a federal requirement for international visitors and their dependents. Not filing your required taxes documents could lead to penalties, such as a fine, or even negatively impact your immigration status.
If you apply for future immigration benefits, such as H-1B, Permanent Residency, or other statuses, you will likely be asked to provide copies of tax filings for all previous years you were in the U.S. If you forgot or didn't file in previous years when you should have, the IRS recommends that you file now for previous years. You can find the relevant forms from past years on the IRS website. The IRS expects you to file your taxes each year--even if you file late. Penalties for late filing may include fines, interest on taxes owed, or other consequences.
IRS Form 8843 is a tax form used by foreign nationals to document the number of days spent outside of the U.S. and to help determine tax responsibility. All F and J foreign nationals (and their F-2/J-2 dependents) who are nonresident aliens for tax purposes are required to file Form 8843. You will file this form whether or not you received income or are filing a tax return. You must file form 8843 if BOTH of the following conditions are met:
- You were present in the U.S. in F/J status for any portion of the previous calendar year (the year for which you are filing)
- You are a nonresident alien for tax purposes.
Dependents (including children, regardless of age) should complete a separate Form 8843 independent of the F-1/J-1.
Instructions for form 8843 can be found here: www.irs.gov
Some international students and scholars are required to file a State of Ohio Tax Form: http://tax.ohio.gov/. If you worked in more than one U.S. state during the past calendar year, you may have to file tax returns in all the states in which you resided or worked. You should check the state revenue website of the other state(s) where you worked or lived for assistance in determining your tax filing obligations. The GLACIER Tax Prep link on the Glacier system only provides assistance with the Federal tax return. The Glacier Tax Prep system now provides a link to a third party vendor to help with completion of state tax return forms (fee applies).
Some cities require completion of a tax return for all residents. You should check with the city you live in.
Tax Return Deadlines
In order to meet these deadlines, the forms must be postmarked on or before April 15 each calendar year.
In order to complete your tax return, you will need some basic information about your employer, as well as detailed information about your income that you earned during the tax return year. As a nonresident alien, you will receive tax information through Form 1042-S for your tax treaty exemption amount or for your fellowship payments. As a nonresident alien you may receive a form W-2 for income that was not covered under the tax treaty exemption or non-fellowship income.
Ohio State is required to furnish your yearly 1042-S by March 15 of the following year. You may elect to receive your 1042-S online through Glacier. Otherwise, you will receive a copy of your Form 1042-S by U.S. Mail.
Some nonresident aliens may receive both a W-2 and a 1042-S. If you consented for online delivery of your W-2, you can access it via Employee Self Service.
A 1042-S Form is a year-end tax document given to a Nonresident Alien who:
- Received wages covered under a tax treaty
- Received Fellowship payments
A Form 1042-S will be generated for all of the above through Glacier. The Form 1042-S will indicate the income code, which describes the type of income that you received during the year.
In certain cases, you may receive multiple 1042-S forms with different income codes.
- 16 Scholarship or Fellowship
- 17 Independent Personal Services
- 18 Dependent Personal Services (generally limited to individuals from Canada)
- 19 Teaching or Research
- 20 Studying and Training
- 42 Payments to Performers/Artists
- 43 Payments to Performers/Artists (signed Central Withholding Agreement required)
- 54 Other Income
Form W-2 reports all taxable wages you received from The Ohio State University during the calendar year and all taxes withheld from those wages. The form serves as an annual statement that enables you to file your personal income tax return with the Internal Revenue Service (IRS) as well as state and local taxes. Form W-2 reports only wages paid during the calendar year, regardless of when they were earned; that is, it does not include amounts earned but not paid until the next year. The Ohio State University employees may elect to receive their W-2 electronically or on paper. The paper W-2 forms are required to be post-marked no later than January 31 each year.
The W-2 forms will be available on Employee Self Service if you are an active employee who consented for online delivery (W-2 Online). If you are no longer an active employee, your W-2 form will be mailed to the last home address we have listed for you in the HR system.
Glacier Tax Prep
GLACIER Tax Prep (GTP) software is designed to assist foreign nationals to prepare their U.S. federal tax return. GLACIER Tax Prep is available for Ohio State University students and scholars.
GLACIER Tax Prep is able to provide the following services:
- Determine your U.S tax residency status
- Determine eligible tax deductions, credits, and allowances
- Review eligibility to claim tax treaty benefits
- Calculate tax refund or tax due to the IRS
- Prepare all required federal tax returns, statements, and forms for both the student/scholar.
Before logging into GLACIER Tax Prep, make sure you have the following items:
- Any income tax documents you received for the appropriate tax year (Form W-2, Form 1042-S, etc.)
- Copy of last year's nonresident tax return, if you filed a return
- A tax filing number (either ITIN or SSN) for both yourself and any dependents you wish to claim on your tax return.
- Note: only students from Mexico, India, Canada, and South Korea are able to claim their dependents on their tax returns under very specific circumstances.
Please make sure you have all your income documents before starting GTP to avoid filing your taxes incorrectly. You will receive income forms only for the income types you received. For example, if you received a Fellowship, then you will receive Form 1042-S. If you did not have a job with wages, then you will not receive Form W-2.
The United States has tax treaties with a number of foreign countries. Under these treaties, residents of foreign countries are taxed at a reduced rate, or are exempt from U.S. federal and state taxes on certain types of income and/fellowship payments they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific types of income. If the treaty does not cover a particular type of income, or if there is no treaty between your country and the United States, you must pay tax on that income. For the list of tax treaty countries and their treaties, reference the IRS Publication 901 at www.irs.gov.
FICA Tax and Exemptions
General Student FICA exemption:
FICA taxes do not apply to payments received by students employed by a school, college, or university where the student is enrolled full time and pursuing a course of study.
International Student and Scholar FICA exemption:
International students, scholars, professors, teachers, trainees, researchers, physicians and other nonresident aliens for tax purposes present in the United States in F-1, J-1, M-1 or Q-1/Q-2 nonimmigrant statuses are exempt from FICA taxes on wages.
Limitations on FICA exemption for International Persons:
- The FICA exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
- The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 nonimmigrants who change to an immigration status which is not exempt or to a special protected status.
- The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 nonimmigrants who become resident aliens.
- The FICA exemption only applies to international persons in F-1, J-1, M-1, Q-1, or Q-2 visas and who are still classified as nonresident aliens for tax purposes under U.S. tax regulations.
- International students in F-1 and J-1 nonimmigrant status are entitled to the FICA exemption for the first 5 calendar years of physical presence in the United States. After this period of time has passed, international students are classified as Resident Aliens for Tax Purposes and are subject to FICA tax withholding. However, if they remain students (primarily) they may be able to claim the Student FICA exemption.
- The five-year exemption permitted to F-1 and J-1students also applies to any period in which the international student is in "optional practical training" allowed as long as the foreign student is still classified as a nonresident alien for tax purposes.
- International scholars, teachers, researchers, trainees, physicians, other non-students in J-1, Q-1 or Q-2 nonimmigrant status who have been in the United States less than two calendar years are classified as nonresident aliens for tax purposes and are exempt from FICA taxes for that two-year period of time. However, once the two calendar years have passed, this group of international persons is classified as resident aliens for tax purposes and is subject to FICA tax withholding.
- Spouses and dependents of alien students, scholars, trainees, teachers, or researchers temporarily present in the United States in F-2, J-2, or M-2 status are NOT exempt from Medicare taxes, and are fully liable for Medicare taxes on any wages they earn in the United States. International persons in H-1B, TN, O-1 or E-3 status are fully subject to FICA tax withholding. No FICA exemption is available to persons in these visa categories.
Form 8843 - Instructions for required fields
- Download the Form 8843 off the IRS web site
- Fill in your name exactly as it appears on your passport
- For the box requesting your U.S. taxpayer identification number, write in your Social Security or Individual Taxpayer Identification Number (ITIN). If you do not have either one of these, leave it blank.
Part I: General Information
Required for: Everyone completing Form 8843
- 1a Enter your status (i.e. F-1, J-2, H-1B, etc.) that you used to enter the U.S. most recently and the date you entered
- 1b Your current nonimmigrant status should be the same as #1a unless you changed status while in the U.S. If you requested a change of status (e.g. you entered the U.S. in H-1B status and without leaving changed to F-1) in the U.S. enter your current non-immigrant status (F or J) and the date that your change of status was approved (see I-797 form). Otherwise, all you need to do is enter your current non-immigrant status as you stated in #1a; no date is required.
- 4a Count the number of days you were physically present in the U.S. in each of the last 3 calendar years. Make sure to enter the actual number of days you were present. Exclude days when you were outside of the U.S.
- 4b Substantial Presence Test: enter the number of days you were present in the U.S. during the tax year. This should be the same number that you entered in the first blank on #4a.
Part II: Teachers and Trainees
Required for: J-1 Research Scholars', Sort-Term Scholars, Professors and Specialists ONLY. See box #5 on your DS-2019 for category. Do not fill out if you are a 'J-1 Student' or 'F-1 Student'.
- 5 Enter: The Ohio State University 901 Woody Hayes Drive, Columbus, OH 43210 PH#614-292-2311
- 6 – 8 Answer each question according to your individual situation.
Part III: Students
Required for: F-1 and J-1 Students (and F-2/J-2 dependents) ONLY
9 Enter: The Ohio State University 901 Woody Hayes Drive, Columbus, OH 43210 PH#614-292-2311
- F-2/J-2 Dependents write: Spouse/Dependent of student attending The Ohio State University 901 Woody Hayes Drive, Columbus, OH 43210 PH#614-292-2311
- 10 Enter: Gifty Ako-Adounvo 1712 Neil Ave, #100 Columbus, OH 43210 PH#614-292-2311
- F-2/J-2 Dependents write: Spouse/Dependent of student attending The Ohio State University whose Program Director is Gifty Ako-Adounvo 1712 Neil Ave, #100 Columbus, OH 43210 PH#614-292-2311
- 11 – 14 Answer each question according to your individual situation.
Part IV: Professional Athletes
Leave all spaces blank. Does not apply to those present in the U.S. in F or J non-immigrant status.
Part V: Individuals With a Medical Condition or Medical Problem
Leave all spaces blank. Does not apply to those present in the U.S. in F or J non-immigrant status.
Required for: Everyone completing Form 8843
- Sign and date the bottom of page 2
Deadline for submitting the forms:
If you are filing the Form 8843 only, the deadline to file is June 15.