Scholars who have been in the U.S. less than 2 years (and are therefore nonresidents for tax purposes) 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 in 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.
It is best to make a determination of the scholar's tax status prior to withholding, to avoid taxes withheld in error. Please note that an extension of a scholar's program past two years may change their tax status.
Do scholars 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 scholars 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 further information, see the U.S. Department of Justice Handbook for Employers, Publication M-274.