How Much Tax Do International Students Pay in the U.S.?

For international students, U.S. tax obligations depend on your tax residency, what income is taxable, and filing the correct documents with the Internal Revenue Service (IRS).

Determining Your Tax Residency Status

Your U.S. tax obligations are based on your tax residency status, not your immigration status. For tax purposes, you are classified as a “nonresident alien” or “resident alien.” Most students on F, J, M, or Q visas are initially nonresident aliens, a status determined annually.

Tax residency is primarily determined by the Substantial Presence Test, which measures your physical presence in the U.S. over a three-year period. To meet the test, you must have been in the U.S. for at least 31 days in the current year and a total of 183 days over the last three years, using a weighted formula. The formula counts all days from the current year, one-third of the days from the previous year, and one-sixth of the days from the year before that.

Students on F-1 or J-1 visas are “exempt individuals,” meaning their days in the U.S. do not count toward the Substantial Presence Test for their first five calendar years. For non-student J-1 visa holders, like teachers or researchers, this exemption is for two years. A calendar year runs from January 1 to December 31, and arriving anytime within a year, even in December, counts as the first of the exempt years.

After your exemption period ends, you must apply the Substantial Presence Test annually. If you meet the test, you become a resident alien for tax purposes that year. This change means your worldwide income becomes subject to U.S. taxation, similar to a U.S. citizen.

Identifying Taxable Income and Exemptions

As a nonresident alien, you are taxed only on income from U.S. sources, unlike resident aliens who are taxed on worldwide income. U.S. source income includes payments for services performed in the United States, such as wages from on-campus jobs, Curricular Practical Training (CPT), or Optional Practical Training (OPT).

The portion of a scholarship used for tuition, fees, books, and required supplies is not taxable. However, funds used for other expenses like room, board, or travel are taxable income. For students on F-1 or J-1 visas, these taxable amounts may be subject to a 14% withholding tax rate.

Students on F-1 and J-1 visas are exempt from FICA taxes (Social Security and Medicare) on wages from services that align with their studies. This exemption from the 7.65% tax can result in significant savings.

Tax treaties between the U.S. and many foreign countries can further reduce your tax liability by offering lower tax rates or exemptions on certain income. Consult IRS Publication 901, “U.S. Tax Treaties,” to determine if a treaty with your home country affects your tax liability.

Required Forms and Information for Filing

A Taxpayer Identification Number is required for filing. If you are authorized to work, you will have a Social Security Number (SSN). If you are not eligible for an SSN but must file taxes, you must apply for an Individual Taxpayer Identification Number (ITIN) using Form W-7.

Your employer or school will provide forms reporting your income. Form W-2, “Wage and Tax Statement,” details your annual wages and taxes withheld. You will receive Form 1042-S, “Foreign Person’s U.S. Source Income Subject to Withholding,” if you had a taxable scholarship or income subject to a tax treaty, which reports the gross income and any federal tax withheld.

All individuals on F or J visas must file Form 8843, “Statement for Exempt Individuals and Individuals with a Medical Condition,” even if they earned no income. This is an informational return used to certify your exempt status and does not involve any tax calculation.

Nonresident aliens with U.S. source income must file Form 1040-NR, “U.S. Nonresident Alien Income Tax Return.” You will use the information from your Form W-2 and Form 1042-S to report your income. If claiming a tax treaty benefit, you must report it on Form 1040-NR and may need to attach a statement detailing the treaty article.

The Federal Tax Filing and Payment Process

Form 1040-NR and the accompanying Form 8843 are typically filed by mail. Send your return to the address listed in the Form 1040-NR instructions to avoid delays. E-filing options for nonresident aliens are available but may be limited.

For nonresident aliens with wage income subject to withholding, the deadline to file a tax return is April 15th of the following year. If you did not have wages subject to U.S. income tax withholding, the deadline is June 15th. These dates can shift if they fall on a weekend or holiday.

If your completed Form 1040-NR shows that you owe taxes, payment must be submitted by the filing deadline. Payment can be made directly from a bank account using IRS Direct Pay, with a debit card, credit card, or digital wallet via an approved processor, or by mailing a check or money order to the U.S. Treasury.

After filing, the IRS will process your return. Refunds are issued by paper check or direct deposit to a U.S. bank account. The IRS will contact you by mail if there are issues with your return. Keep copies of all filed forms and documents for at least three years.

State Tax Considerations

You may also have state tax obligations, which are separate from federal requirements. Each state has its own tax laws, and you could have a state filing requirement even if you do not owe federal tax.

State tax residency rules differ from federal rules, and you could be a state resident even while being a federal nonresident alien. State residency is often based on factors like the duration of your stay or maintaining a permanent home in the state.

Each state has its own tax forms, filing deadlines, and regulations. Some states have no income tax, while others tax wages and other types of income earned within their borders.

To ensure you are compliant, you must determine the requirements for the state where you reside. The official website of your state’s department of revenue or taxation is the best source of information. There you can find the necessary forms, instructions, and guidance to complete your state tax return.