Tax Reporting

Income Withholding

All foreign nationals living in the United States as students, scholars, and temporary workers are subject to U.S. and state income tax regulations, just as US citizens and residents are, but only on income you earn in the U.S.

There are different types of taxes: Federal Social Security (FICA) taxes and federal and state income taxes. If you have been in the U.S. for fewer than 5 years as a student, you are not required to pay FICA taxes, therefore they should not be withheld from your paycheck. Money will be withheld, however, to cover any federal and state taxes you may owe at the end of the year. If you do not owe taxes, then that money is refunded to you.

When you start a job, your employer will ask you to fill out a W-4 Form. The information you provide on this form will determine how much money will be withheld from your paycheck.

April Tax Time

Once a year you need to calculate how much, if anything, you owe in federal and state taxes, based on how much money you earned that year. You have until mid-April to report your earnings for the previous calendar year. To do this, you need to file Federal Form 1040NREZ or 1040NR, plus Massachusetts Form 1-NR.

If you owe any taxes, you must include full payment when you send your forms. You also need to attach the W-2 form you receive from each employer you have worked for during the year. The W-2 form is the employer’s report of the amount you earned and the amount withheld.

In general, if your earnings are less than $3,300, you will owe no tax. But you still must fill out tax forms and send them. In fact, you must file tax forms even if you earned no money during the year. Failure to report, or to pay the taxes you owe, can result in serious penalties.

Tax Treaties

The U.S. has established agreements, called tax treaties, with many foreign governments that may reduce the amount of tax you owe. For example, U.S.-based scholarship grants that cover room, board, and other personal expenses can be considered as taxable income—unless the U.S. has a tax treaty with your home country that specifies otherwise. To learn more about tax treaties and how they might benefit you, see the Social Security/Taxes area in the Resources section on this website.