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Foreign National Tax Guide

Filing Requirements

This site is dedicated to helping you comply with U.S. tax laws if you are a foreign national (resident or nonresident alien) visiting the United States on a temporary visa. For most Americans, completing their tax return is a confusing and frustrating exercise. We can only imagine how ominous the task must seem for your, a foreign visitor. Hopefully the information you find here will make the job easier.

In this section:

• Who Needs to File a Return?

• What Happens If You Don't File?

• When and Where To File

• How To Find Free Tax Help

• Choosing a Paid Preparer

• Filing Your Own Return

Who Needs to File a Return?

If you are a nonresident alien doing business in the United States, you are required to file a tax return if you have US source income greater than your personal exemption ($3,400 in 2007). (To "file a return" means to send it to the IRS, either through the mail or electronically.) You are considered to be engaged in business even if you are an employee working for wages. If you are a student or scholar visiting the United States on an F, J, M or Q visa, and are classified as a nonresident for U.S. tax purposes, you are required to file a tax return each year you are here if you have any income subject to U.S. income tax.

Additionally, if you are an exempt individual (explained under "Residency Status"), you are required to file Form 8843 regardless of your income. Here is a description of the forms you are required to file:

• Form 1040NR, U.S. Nonresident Alien Income Tax Return, or, if you qualify, Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, and
   

• For exempt individuals, Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition.

These forms and instructions can be downloaded from the IRS Web site at www.irs.gov. 

Update: In 2008, a one-time rebate of tax is available for certain taxpayers with income of $3,000 or more reported on their 2007 tax returns, even if they pay no tax. Under the "Economic Stimulus Act of 2008," a check comes in the mail after you file your 2007 tax return as an advance refund of your 2008 tax. However, there are a couple of important exceptions. Nonresident aliens are not eligible for the rebate under new Sec. 6428. Also, anyone for whom a dependency exemption is "allowable" to another taxpayer is not eligible. Thus, students who are (or could be) claimed as dependents by their parents don't get the rebate , even if they have enough income to file a return.

In prior years, nonresident alien students and scholars  were required to file an income tax return regardless of their income. The IRS changed this policy in 1997 to require a return only if you have income subject to U.S. tax. However, a formal interpretation has not been issued by the IRS specifying exactly what they mean by this. One IRS official has stated that if you have received only a "qualified scholarship" that is excluded by U.S. statute, you do not have to file a return. Another IRS official stated that you must file a return if you have income exempt by treaty in order to claim the treaty exemption. It doesn't matter that your employer withheld adequate tax from your paychecks, or that you have a small amount of income and owe no tax; you are still supposed to file. 

Form 8843 is required if you are an "exempt individual." This does not mean you are exempt from paying U.S. taxes, but that you are exempt from the substantial presence test for determining residency status. See "Residency Status." You must file Form 8843 even if you are not required to file an income tax return.

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What Happens If You Don't File?

Studies have shown that most nonresidents either do not file a return, or file incorrectly. However, it has also been shown that there is massive overpayment of U.S. taxes by nonresidents who do not file, rather than underpayment (J.W. Antenucci, "Widespread Noncompliance and Overpayment of Taxes by Foreign Scholars," Tax Notes, May 13, 1996). Just because your employer has withheld tax from your wages does not mean that you have paid the proper amount. You could have a sizeable refund due!

If you do not have a tax liability, you might be wondering what will happen if you do not file a return. Well, the IRS will not impose penalties if no tax is due. However, the terms of your visa require you to comply with all laws of the United States, including the requirement to file an income tax return. You might be required to show proof that you filed if you wish to change your visa status, or obtain permanent residency, or regain entry into the United States once you have left. Don't risk your visa status by failing to comply with this requirement.

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When and Where To File

If you received wages subject to U.S. tax withholding, the due date for filing your tax return is April 15 of the following year. If you did not receive taxable wages during the year, the due date for filing your tax return is June 15 of the following year. Your Form 1040NR or Form 1040NR-EZ (including Form 8843) must be sent to the Internal Revenue Service Center, Philadelphia, PA 19255. See page 33 of Publication 519 for more information.

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How To Find Free Tax Help

Call the local IRS office and ask for the Taxpayer Education Coordinator to find out about free taxpayer assistance. If you are a student or visiting faculty member, contact your International Student Services advisor on campus for information.

Choosing a Paid Preparer

If your tax situation is complex, seek the aid of a professional tax preparer. Unfortunately, there are relatively few preparers who have experience in preparing returns for foreign nationals. Be sure to ask prospective preparers if they are familiar with Form 1040NR and the rules applicable to F, J, M and Q visa holders. Do not engage a preparer who is not. The professional designations of "Certified Public Accountant" or "Enrolled Agent" are indications of a preparer's competency, but are not guarantees. Most tax preparers charge on a per hour basis rather than a fixed fee. If a preparer will not state an exact fee in advance, you should at least be told the maximum amount that you might have to pay. Even if you are planning to hire a preparer, it's best to learn as much as you can on your own. Take some time to look through these pages; you might find that you can do the job yourself. We happen to offer affordable tax return preparation services under Our Tax Services.

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