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Some Information About Taxes
If you have income during your stay at La Verne, there are three different types of tax with which you must be concerned: U.S. federal income tax, social security (FICA) tax, and California state income tax.
Federal Income Tax
Collection of Federal Income Tax in the United States is the responsibility of the U.S. Internal Revenue Service (IRS). Foreign students in the United States are subject to federal income taxation on any wages earned in the United States. The following is a summary of U.S. government requirements; for more detailed information regarding your tax obligations, obtain publications 519 (U.S. Tax Guide for Aliens), and 901 (U.S. Tax Treaties). These publications and tax forms are available by calling # 1-800-829-3676 or 1-800-TAX-FORM.
The federal tax obligations of foreign nationals are determined by several factors: immigration status, length of residence in the U.S., purpose for being in the country, intent to return to the home country or to remain for an extended period in the United States, country of citizenship, and type of income. Different combinations of these factors result in different tax obligations.
The first consideration is one's status as a resident or nonresident for tax purposes. In general, the following guidelines apply:
- F-1 and J-1 students are considered nonresidents for tax purposes in their first five years of study. After five years, students are presumed to be residents and must justify continued filing as nonresidents to the IRS.
- Individuals in J-1 status other than students in degree-granting programs, i.e., scholars, faculty, and researchers, are considered nonresidents for tax purposes during their first two years in the United States.
- All other nonimmigrant visa holders who reside in the United States for more than 183 days in the tax year (calendar year) are presumed to be residents for tax purposes.
- Permanent residents are residents for tax purposes.
Taxation of Residents: If you are a resident for tax purposes, you
- pay tax on your entire worldwide income
- may claim all of your dependents
- may take the standard deduction or itemize deductions
- file form 1040 or 1040EZ
Taxation of Nonresidents: If you are a nonresident, you
- pay tax only on income earned in the United States
- may claim only yourself as a personal exemption regardless of the number of accompanying dependents (citizens of Canada, Mexico, Japan, and South Korea excepted)
Filing Tax Returns and Obtaining Refunds
All individuals in F-1, F-2, J-1 or J-2 status must file a tax return, regardless of whether they have earned income in the U.S. or not. Nonresidents for tax purposes who have income from a source in the United States -- foreign students who have assistantships, fellowships, on or off-campus jobs -- must file the tax return form 1040NR or 1040NR-EZ plus attachments between January 1 and April 15 for the preceding tax year.
In many cases, taxpayers are due a refund because more money was withheld from their pay than they owe in taxes. If a refund is due, a check is sent approximately six months after the tax return is filed. In some cases, more tax may be due; in this case the taxpayer must send the IRS a check for the tax due with the return by the April 15 deadline.
It is not possible to receive a refund of money withheld without filing a return. Individuals who have earned income in the United States and who fail to file an income tax return may later be required to pay fines, penalties, and interest charges in addition to any taxes owed.
