Do International Students Pay State Taxes?

State income taxes in the U.S. are a separate financial obligation from federal income taxes. International students residing in the United States must understand these state-level requirements, as they vary considerably depending on the state where they live or earn income. This article clarifies state tax obligations, taxable income types, and the general filing process for international students.

Understanding State Tax Residency

Determining state tax residency is the first step in understanding an international student’s state tax obligations. State tax residency rules are distinct from federal tax residency classifications. While federal tax residency often uses tests like the Substantial Presence Test, states employ their own criteria to classify individuals as residents, non-residents, or part-year residents.

A central concept in state tax residency is “domicile,” which refers to an individual’s true home or intended permanent abode. Factors indicating domicile can include voter registration, the location where mail is received, and the state that issued a driver’s license. For international students, their domicile is often considered their home country, as they typically intend to return there after completing their studies.

Beyond domicile, states often use “statutory residency” rules, which commonly involve a physical presence test. Many states consider an individual a resident if they spend more than 183 days within the state during the tax year. However, the exact number of days can vary by jurisdiction, and states also consider other ties. These additional factors can include property ownership, the location of bank accounts, and where family members reside.

The classification as a resident or non-resident significantly impacts state tax liability. Residents are generally taxed on their worldwide income by the state, similar to how U.S. citizens are taxed federally. Conversely, non-residents are typically only taxed by a state on income sourced within that state. If an international student moves between states within a single tax year, they might be considered a part-year resident in multiple states. International students should research the specific residency rules of any state where they lived or earned income.

Identifying Taxable Income and State-Specific Rules

After determining state tax residency, the next step involves identifying which types of income are subject to state taxation. International students commonly receive income from sources such as wages earned from on-campus employment, or through Optional Practical Training (OPT) and Curricular Practical Training (CPT). Scholarships and stipends also represent common income types, though their taxability can depend on whether they cover qualified educational expenses like tuition and fees, or non-qualified expenses such as living costs.

Many states generally align their definitions of taxable income with federal tax law. However, important differences can exist at the state level. Some states might offer specific exemptions or deductions that could apply to international students, such as exempting certain scholarship amounts even if they are considered federally taxable. Tax withholding may occur for both federal and state obligations.

Tax treaty benefits, which can reduce or eliminate federal tax on certain types of income for non-resident aliens, primarily apply at the federal level. While some states may conform to these federal treaty provisions, others might not, or they may have their own rules regarding treaty-exempt income. Consult the specific tax authority guidance for each state to determine how tax treaties are applied.

An Individual Taxpayer Identification Number (ITIN) is necessary for international students who have a tax filing obligation but are not eligible for a Social Security Number (SSN). This includes individuals receiving non-employment income like certain scholarships or fellowships that require a tax return. The ITIN serves as a tax processing number issued by the Internal Revenue Service (IRS) for tax filing purposes.

State Tax Filing Process

Once an international student has determined their state tax residency and identified their taxable income, the final step involves filing. Each state that imposes an income tax has its own specific tax forms. These forms capture the relevant income and deduction information for that state’s tax system.

To complete state tax forms, certain documents are typically required. These include federal tax forms like Form W-2 for wages, Form 1042-S for certain types of income subject to withholding, and Form 1099 for miscellaneous income. Having the completed federal tax return can also be helpful, as state returns often rely on information from the federal filing.

State tax filing deadlines generally align with the federal tax deadline, which is typically April 15th of the following year for income earned in the prior calendar year. However, these dates can vary slightly by state or shift if April 15th falls on a weekend or holiday. Extensions to file may be available, but these typically only extend the time to file the return, not the time to pay any taxes owed.

Common methods for filing state taxes include using the state tax agency’s official website for online filing, utilizing commercial tax software, or submitting paper forms via mail. Some tax preparation services cater specifically to international students and can assist with both federal and state filings. After filing, students can expect to receive confirmation, and states may follow up if additional information is needed. Refund processing times can vary by state. For complex tax situations, seeking assistance from a qualified tax professional is recommended.