Students who have been in the U.S. less than 5 years (and are therefore nonresidents for tax purposes) and who are on practical training off-campus are not subject to any FICA (social security) and Medicare withholdings. The mechanism for the exemptions are found under Internal Revenue Code 3121 (b)(19) and is available to persons n F-1, J-1, M-1 and Q immigration status. It is a blanket exemption with the only qualification being that the person be a nonresident for tax purposes and that the work is authorized (CPT, OPT, AT). IRS Publication 519 is a good resource.
Though F-1 and J-1 students working off campus are exempt from FICA, they are subject to the higher federal (and state) withholding for nonresident aliens. It is best to make a determination of the student’s tax status prior to withholding, to avoid taxes withheld in error.
Do students have to file taxes?
Yes. All non-residents (for tax purposes) who were present in the U.S. in F-1, F-2, J-1, J-2, M-1, or M-2 status during the previous tax year must file Form 8843, even if they received no income. This form does not require a social security number or ITIN.
Does ISSS provide assistance with tax forms?
ISSS does not provide tax advice or assist with completing tax-related forms. However, we do help coordinate a volunteer VITA program for non-resident aliens during the tax season. Additionally, we also purchase a web-based tax return preparation software program designed to assist non-resident alien students in preparing U.S. federal income tax forms. Free access is available during the tax season. The UI College of Business sponsors a VITA program for residents.
Does ISSS complete the I-9?
No, ISSS does not assist with completing this form. Please contact Payroll with specific questions.
The employer should mark in Section 1 that the student is “an alien authorized to work until” (date of expiration of work authorization). The admissions number is the 11 digit number given on both his/her I-20 or DS-2019 and the I-94 entry document.
For studentt on Optional Practical Training, the employer can use the I-688B to complete List A on the I-9. The document title is “Employment Authorization Document”, issuing authority is CIS, document number and expiration can both be found on the front of the card.
For further information, see the U.S. Department of Justice Handbook for Employers, Publication M-274.