Is an F1 Student a U.S. Person for Tax Purposes?

An F1 student’s status as a “U.S. person” for tax purposes is a complex determination that rests entirely on tax law, not immigration status. The Internal Revenue Service (IRS) has a distinct set of rules to classify individuals for taxation, which can lead to outcomes that seem counterintuitive from an immigration perspective. Understanding this classification is the first step for any international student, as it dictates how income is taxed and what forms must be filed. This classification ultimately determines whether an F1 student is treated as a nonresident or a resident for tax purposes, a conclusion that carries significant financial implications and depends on the student’s time in the country.

Defining U.S. Person for Tax Purposes

The term “U.S. person” for tax purposes is defined by the Internal Revenue Code and includes U.S. citizens, permanent residents who hold a Green Card, and individuals who meet the definition of a “resident alien.” This definition is purely for tax administration and is separate from an individual’s immigration or visa status. For foreign nationals, including those on an F1 student visa, the central question is whether they are classified as a “resident alien” or a “nonresident alien.”

A resident alien is taxed in the same manner as a U.S. citizen, meaning their worldwide income is subject to U.S. taxation. In contrast, a nonresident alien is taxed only on income from U.S. sources. For an F1 student, their activities, such as on-campus employment or receiving certain scholarships, will determine if they have U.S. source income, but their tax classification dictates the scope of what must be reported. It is possible for an F1 student to be a nonresident alien for tax purposes for several years before transitioning to a resident alien, even while their F1 immigration status remains unchanged.

The Substantial Presence Test for F1 Students

The primary mechanism the IRS uses to determine if a foreign national is a resident alien is the Substantial Presence Test. This test is a mathematical formula based on an individual’s physical presence in the United States over a three-year period. To meet the test, a person must be present in the U.S. for at least 31 days in the current year and a total of 183 days over a three-year look-back period. The 183-day total is calculated by counting all days in the current year, one-third of the days in the first preceding year, and one-sixth of the days in the second preceding year.

A significant exception exists for F1 students, who are considered “exempt individuals.” This means that for the first five calendar years of their presence in the U.S., the days they are physically present do not count toward the Substantial Presence Test. This exemption preserves their status as nonresident aliens for tax purposes, provided they substantially comply with their F1 visa requirements. The five years are calendar years, and any part of a year counts as a full year.

Once the five-year exempt period is over, the student is no longer an exempt individual. Starting on January 1st of their sixth calendar year, they must begin counting their days of physical presence. For example, if a student who arrived in August 2018 remains in the U.S., their exempt years would be 2018 through 2022. In 2023, they would start counting days and would meet the Substantial Presence Test, becoming a resident alien for the 2023 tax year.

As a resident alien, the student must report their worldwide income to the IRS, not just income from U.S. sources. They would also switch from filing Form 1040-NR, for nonresidents, to filing Form 1040, the standard U.S. individual income tax return. This change in filing status occurs automatically by law once the Substantial Presence Test is met.

Required Tax Forms and Statements

The most common form for students during their exempt period is Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition. This form is not a tax return but an informational statement filed with the IRS to certify that the student is an “exempt individual” and that their days of presence should not be counted for the Substantial Presence Test. All F1 students, along with their F-2 dependents, must file Form 8843 for every year they are in the U.S. as a nonresident alien, even if they had no U.S. income.

The student must provide their passport and visa information, the date they entered the U.S., and their current nonimmigrant status. Part III of the form is designated for students and asks for the name and address of their academic institution and its director.

If an F1 student earns U.S. source income, such as from on-campus employment or a taxable scholarship, they will need to file a tax return in addition to Form 8843. As a nonresident alien, the correct form is Form 1040-NR, U.S. Nonresident Alien Income Tax Return. After the five-year exempt period, if the student becomes a resident alien, they will no longer file Form 8843 or Form 1040-NR and will instead file Form 1040.

Filing Obligations and Deadlines

The submission process for these forms depends on whether the F1 student has a tax return filing requirement. If the student earned no U.S. income and is only required to file Form 8843, the form must be mailed to the IRS by itself by June 15th of the year following the calendar year in question. The form should be sent to the IRS service center address listed in the Form 8843 instructions.

If an F1 student has a requirement to file a tax return, Form 8843 must be attached to their Form 1040-NR. In this scenario, the filing deadline for both forms is the standard tax deadline, April 15th. The complete package should be mailed to the address specified in the instructions for Form 1040-NR.

It is important to meet these deadlines, as failing to file can lead to complications. If a student cannot meet the filing deadline, they can request an automatic six-month extension by filing Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by the original due date. This extends the time to file to October 15th, but it does not extend the time to pay any tax that may be owed.