Is an F1 Student a US Person for Tax Purposes?

For international students on an F1 visa, the term “US person” has a specific definition for tax purposes that is distinct from immigration law. This classification, determined by the Internal Revenue Service (IRS), dictates how you are taxed and what you must report. Understanding your tax residency status is the first step in meeting your U.S. financial obligations.

Determining Your US Tax Residency Status

The Internal Revenue Service (IRS) uses two tests to determine tax residency: the Green Card Test and the Substantial Presence Test (SPT). As an F1 student, your status depends entirely on the SPT, which measures your days of physical presence in the United States.

To meet the SPT, you must be physically present in the U.S. for at least 31 days in the current year and 183 days over a three-year period. The 183-day total is calculated by adding all days from the current year, one-third of the days from the prior year, and one-sixth of the days from the second prior year.

A special rule exists for F1 students, who are considered “exempt individuals.” This means your days of presence in the U.S. do not count toward the SPT for your first five calendar years. This five-year exemption is a one-time allowance. For instance, if you arrived on an F1 visa in December 2023, the entire year of 2023 counts as your first exempt year.

After you have been in the U.S. as an F1 student for any part of five calendar years, the exemption ends. Beginning in your sixth calendar year, you must start counting your days of physical presence using the SPT formula. If you meet the 31/183-day requirements, you will be classified as a resident alien for tax purposes for that year.

Required Tax and Informational Forms

Your tax residency status dictates which forms you file. For F1 students classified as nonresident aliens, Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition, is a required filing. This statement declares that your days of presence should be excluded from the SPT because of your F1 status. You must file Form 8843 even if you have no U.S. source income.

If you are a nonresident alien with U.S. source income, such as wages or a taxable scholarship, you must file Form 1040-NR, U.S. Nonresident Alien Income Tax Return. On this form, you report only income from U.S. sources. Nonresident aliens generally cannot claim the standard deduction, though some tax treaties may offer benefits.

Once you become a resident alien by meeting the Substantial Presence Test, your filing requirements change. You will file Form 1040, the same return used by U.S. citizens. As a resident alien, you are taxed on your worldwide income, meaning you must report income from all sources, both inside and outside the United States.

Financial institutions will also require you to certify your tax status. As a nonresident alien, you provide Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). Once you become a resident alien, you are considered a “US person” and must provide Form W-9, Request for Taxpayer Identification Number and Certification.

Foreign Financial Account Reporting Obligations

Becoming a resident alien for tax purposes introduces a separate reporting requirement for foreign financial assets. This obligation is governed by the Financial Crimes Enforcement Network (FinCEN), not the IRS. As a resident alien, you are considered a “United States person” for this reporting.

This status requires you to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), if you have a financial interest in or signature authority over foreign financial accounts and the aggregate value exceeds $10,000 at any time during the calendar year. The $10,000 threshold is the combined total of all your foreign accounts. This includes assets like bank accounts, brokerage accounts, and mutual funds held outside the United States.

The FBAR is filed electronically through the BSA E-Filing System and has a specific due date. It is a disclosure form and does not involve any tax payment. The purpose is to provide the U.S. government with information about foreign accounts to combat tax evasion. Failure to file an FBAR when required can lead to penalties, which can be civil or criminal, making it an important compliance matter.