Tax FAQs

• Current Students

  
  Information for Living in the US
• Current Students Main Page

Tax FAQs

Who must file US Tax Forms/Returns?

In general, international students and scholars must file tax returns if they engage in any trade or business in the US (Studying, teaching and performing research are all considered to be activities in which the taxpayer is engaged in a trade or business.)

Student and Scholar Exception:

Nonresident aliens who are students, teachers, or trainees and are temporarily present in the US under an F or J visa, must file a return if they have income that is subject to withholding, even if no tax is withheld. However, a form 8843 must be filed regardless of whether income was earned or not if you are excluding days of presence from the substantial presence test (used to determine if you are a resident or non-resident alien for tax purposes see IRS Tax Topic 851 ).

What is the difference between a non-resident alien and a resident alien for tax purposes?

Resident aliens for tax purposes are taxed like US Citizens. Generally, students are nonresident aliens for tax purposes for five years and after five years, become resident aliens for tax purposes. Generally, scholars are nonresident aliens for tax purposes for two years and after two years, become resident aliens for tax purposes. Since resident aliens and nonresident aliens are taxed differently, it is important for you to determine your status. You are considered a nonresident alien for any period that you are neither a US citizen nor a US resident alien, unless you make a first-year choice to be treated as a resident alien. You are considered a resident alien if you meet one of two tests for the calendar year. For specific information, refer to IRS Tax Topic 851, Resident and Nonresident Aliens.

Can nonresident aliens file joint tax returns?

Nonresident aliens cannot file joint Federal or state tax returns.

I do not have any US earned income; why should I file a tax form?

If you did not have any US earned income, or did not receive a scholarship or fellowship grant, then you do not have to file taxes. However, you still need to file Form 8843 if you are excluding days of presence from the substantial presence test (see IRS Tax Topic 851). If you are filing Form 8843 only, the due date is June 15.

If you do not have tax liability, the IRS will not penalize students and scholars for not filing (although they must still file Form 8843). However, students and scholars need to stay in compliance with all laws in the US, including income tax filing. If you want to apply for residency at a later date, you may be asked to show proof of tax compliance.

Instructions on how to file the form 8843.

I am only here for one semester.  How can I file US taxes outside the US?

If you will not be in the US when taxes are due, then you can file outside the US. Make sure that your employer knows your new address so that they can send you a W-2 form. IU is working to purchase software that you can use while you are outside the US that will assist you with completing mandatory federal forms and includes instructions for the state forms. Additional information on this software will be communicated to students and scholars as soon as possible.

How can I get help with filing Federal and State Tax forms?

The Indiana University Volunteer Income Tax Assistance (IU VITA) program will be available Mondays and Tuesdays from 5pm to 8pm, January 30, 2012 through March 9, 2012 for assistance in preparing your 2011 income tax return. The program is located on the 1st Floor of the IU Maurer School of Law located on Indiana Avenue in Bloomington. IU VITA will also offer two 'Super Saturday Events' from 11am – 5pm on March 3, 2012 and March 24, 2012 in the Kelley School of Business Undergraduate building. Bring your passport and visa, ITIN Tax number (if you have one), and any other income documents (such as W2, 1098-T, or 1042-S) and a certified volunteer will complete your taxes for you. This is a first come, first serve program. Email IndianaUniversityVITA@gmail.com for additional information.

The IU Office of International Services is also working to purchase a software product that will provide step-by-step assistance with filing your taxes. Additional information on this software will be communicated to students and scholars as soon as possible.

For additional assistance with tax or tax-filing questions please contact the local Federal IRS office by phone (812) 337-7600 or in person 2017 S. Liberty Dr., Bloomington, IN 47403.

What is a W-2 form?

The W-2 form is a statement from your employer that indicates how much money you were paid in the year and how much money was withheld from you in federal, state, and local taxes.

What is a 1042-S and will I receive one?

The 1042-S is a form used by the University to report non-employee type earnings (such as a grant or scholarship) of a non-resident alien for tax purposes, many of whom are claiming an exemption due to a US Tax Treaty.

If you have received a scholarship or a grant that is not a part of your employment and that did not go to cover your tuition or other "qualified" expenses, you will receive a 1042-S. In some cases the 1042-S will show the amount of funds that are exempt from tax withholding due to a tax treaty.

What are “qualified expenses”?

Income in the form of a scholarship or fellowship is treated in one of three ways:

1. Excludable—which means that a student who is a candidate for a degree may be able to exclude from income some or all amounts received under a “qualified” scholarship (both residents and non-residents).  A qualified scholarship is any amount received as a scholarship or fellowship grant and used for tuition, fees, books, supplies, and equipment that the student is required to buy.
2. Exempt by a tax treaty.
3. Taxable—scholarships that pay for room and board, travel, are taxable, for example.

What is form 1098 T and what should I do with it?

You should keep it with your tax records, but you do not need to send it with your return or mention it on the return. The purpose of the form is to let you know that you were a student of the college or university that issued it. It usually contains information on how much tuition and fees you paid.

What forms do I need to use to complete my Federal and Indiana State tax returns?

• 1040NR or 1040NR-EZ:

  These are Federal Tax forms. Additional forms may be required based on your individual circumstances. OIS is working to purchased software that will help you to complete your taxes. Additional information on this software will be communicated to students and scholars as soon as possible. Federal tax forms and instructions can also be downloaded from the IRS website. Details specific to international tax filers may be found in IRS Publication 519.

• IT-40, IT-40EZ or IT-40PNR:

  These are the Indiana State Tax forms. Additional forms may be required based on your individual circumstances. An individual who was a resident of an Indiana county that had adopted a county income tax should also file CT-40, CT-40EZ, or CT-40PNR. Indiana tax forms and instructions can be found at the Indiana Department of Revenue website.

• For those who need to file other state(s)’s tax returns, please download the tax forms from the respective state government website.  Please click here for state tax directory.

Can I claim any exemptions for dependents on my Federal and State Tax Forms/Returns?

Generally, no. Nonresidents from Canada, Mexico, Korea, or India may be able to claim exemptions for one or more of their dependents. See IRS Publication 519 for details. See below for a brief summary of these exceptions:

• Canada and Mexico:

  Residents of Canada or Mexico may be able to claim a personal exemption for a spouse if the spouse had no gross income for US tax purposes and was not a dependent on another US return. See IRS Publication 519 for more information.

• South Korea:

  Residents of South Korea may be able to claim a personal exemption for a spouse. The spouse must live with the taxpayer. If the student or scholar also has income from outside the US, the exemption will have to be prorated. See IRS Publication 519 for more information.

• India:

  Some nonresidents from India may be eligible to claim a personal exemption for a spouse. The deduction applies only to students and business apprentices. A student may be able to claim an exemption for a spouse if the spouse had no gross income during the year and cannot be claimed on someone else's US return. See IRS Publication 519 for more information.

My dependents do not have SSN or ITIN, what do I do?

F-2s are not eligible for SSN numbers and J-2s are eligible only if they have applied for one and received employment authorization from the USCIS. Those dependents not eligible for SSN must file Form W-7 to apply for an Individual Tax Identification Number (ITIN). You can obtain form W-7 by visiting www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676). The W-7 form needs to be attached with the taxpayer's tax return.

Is my country eligible for tax treaty benefits?

Not all treaties include benefits for all types of income. Please refer to Publication 901 on the IRS website. For a current list of countries that have tax treaties with the US see the IBFD website.

What if I worked in another state other than Indiana?

Then you should file taxes for the state that you worked in. You should be able to find tax forms for other states on the state's Government websites. If you worked in Indiana as well, then you can claim a credit on Schedule E for certain states that you paid taxes to. Please click here for state tax directory.

What if I forgot to file in previous years?

Many students and scholars who are required to file returns either don't file, or file incorrectly. Many of them would be eligible for a refund if they filed the required forms.

If you had no tax liability, the IRS will not penalize you for not filing (although you must still file form 8843). However, the terms of students' and scholars' visas require that they stay in compliance with all laws of the US, including income tax filing. If you forgot to file in the past, you can still file from previous years using old forms found at the IRS website.

What should I put for the address and phone number of the academic institution question?

Indiana University, Bloomington, IN 47405, (812) 855-9086