How Foreigners Can Get a USA Tax Refund

Non-U.S. citizens who earn income in the United States may be eligible for a tax refund from the Internal Revenue Service (IRS). A refund is issued when the amount of tax withheld from paychecks or other income sources exceeds the actual tax owed.

The process requires specific documentation, and eligibility depends on an individual’s visa type, income, and tax residency status. Understanding these requirements is the first step for any foreign national seeking to reclaim an overpayment from the U.S. government.

Eligibility for a Tax Refund

A foreign national’s ability to claim a U.S. tax refund depends on their tax residency status. The IRS classifies individuals as either resident aliens or non-resident aliens. A resident alien is taxed like a U.S. citizen on worldwide income, while a non-resident alien is taxed only on income from U.S. sources. This distinction determines which income is taxable and what deductions can be claimed.

Tax residency is determined by the Substantial Presence Test, which measures the number of days an individual is physically present in the U.S. over a three-year period. Meeting the day-count threshold makes you a resident alien for tax purposes. However, individuals on certain visas, such as students on F, J, M, or Q visas and scholars on J or Q visas, are often exempt from counting days of presence for a specific number of years.

This exemption allows them to remain non-resident aliens for tax purposes for a longer duration. For example, students with F-1 or J-1 status are typically exempt for their first five calendar years in the U.S., while J-1 scholars are often exempt for their first two calendar years. Another reason for a refund is the over-withholding of federal income tax from wages.

Additionally, Social Security and Medicare (FICA) taxes may be refundable. Non-resident alien students and scholars on F, J, M, or Q visas are exempt from FICA taxes on wages for services that align with their visa’s purpose. If these taxes are withheld in error, a refund can be claimed.

Sales taxes paid on goods and services are not refundable at the federal level. While a few jurisdictions have local programs for foreign visitors to reclaim sales tax, this is not a federal program and is not widely available. Refunds are generally limited to overpaid income and FICA taxes.

Required Information and Forms

To file a refund claim, you need a proper taxpayer identification number. This means having either a Social Security Number (SSN), issued to individuals authorized to work in the U.S., or an Individual Taxpayer Identification Number (ITIN). An ITIN is for tax-processing purposes for those who are not eligible for an SSN and is required to file a federal tax return.

To obtain an ITIN, you must submit Form W-7, Application for IRS Individual Taxpayer Identification Number, with your first tax return. This application requires you to provide proof of your foreign status and identity, often through original documents like a passport. You generally cannot apply for an ITIN in advance of filing a return unless you meet a specific exception.

You will also need documents that report your U.S. source income and any taxes withheld. The most common is Form W-2, Wage and Tax Statement, from an employer, which details your total wages and the amount of federal, Social Security, and Medicare taxes withheld. Another document is Form 1042-S, which reports other income paid to foreign persons, such as scholarships or fellowships.

The primary return for a non-resident alien is Form 1040-NR, U.S. Nonresident Alien Income Tax Return. On this form, you report your U.S. income, calculate your tax liability, and compare it to the total tax withheld. If you overpaid, the difference is your refund. To reclaim incorrectly withheld FICA taxes, first request a refund from your employer. If they cannot provide one, you must file Form 843, Claim for Refund and Request for Abatement, separately from the 1040-NR.

The Refund Application Process

First-time filers applying for an ITIN must file by mail. The completed Form 1040-NR, Form W-7, and original or certified identity documents must be mailed to the IRS address in the Form W-7 instructions. Attach copies of your income documents, like the W-2 or 1042-S, to your Form 1040-NR.

Processing times vary. Returns with a Form W-7 ITIN application take longer because the IRS must issue the ITIN before processing the tax return. This can extend the total waiting time to several months.

You can monitor your refund’s status using the “Where’s My Refund?” tool on the IRS website. You will need your SSN or ITIN, filing status, and the exact refund amount from your return. The tool shows when your return is received, approved, and when the refund is sent.

Approved refunds can be issued via direct deposit to a U.S. bank account or as a paper check. For direct deposit, provide your bank account and routing numbers on Form 1040-NR. Otherwise, the IRS will mail a check to the address on your return, which can be a U.S. or foreign address.