Tax Case Scenarios
An F-1 or J-1 international did not work or receive a scholarship during 2005. Does the student have to file an income tax return?
Yes! But instead of completing a 1040NR or 1040NREZ, the student will complete only the 8843.
H-1B visa holder enters the U.S. to begin work on December 3, 2005. Which income tax form should he/she file?
An H-1B visa holder who does not pass the substantial presence test must file a nonresident alien tax return (1040NR or 1040NREZ).
An F-1 student changes status to H-1B on June 1, 2005. Which tax returns should the student file, a resident or nonresident return?
An F-1 student who changes status to H-1B and passes the substantial presence test will file a dual status tax return, a nonresident return for the time spent in F-1 status and a resident alien return for time spent in H-1B status. Alternatively the student could file as a Resident Alien for the entire year.
An F-1 student from Hungary entered the U.S. on September 1, 2002. Which tax return does the student file?
Students from Hungary (as well as Barbados and Jamaica) can elect to file as residents (1040, 1040A, 1040EZ).
An F-1 student obtains permanent residence on December 31, 2005. Can the student file as a resident alien (1020, 1040A or 1040EZ) for the 2005 tax year?
Yes, the student can file as a resident alien for the 2005 tax year. This option might reduce their tax liability because they can claim dependency exemptions and standard deductions, but they will not be able to take advantage of tax treaty benefits.
An F-1 student has a spouse who becomes a permanent resident on December 31, 2005. Can the F-1 student file as a resident (1040, 1040A, 1040EZ) and file a joint return with the spouse?
Yes, the student can file as a resident alien for the 2005 tax year. This option might reduce their tax liability because they can claim dependency exemptions and standard deductions, but they may be excluded from claiming certain tax treaty benefits.
An F-1 student who arrived in the US in 2004 from China has a child born in the U.S. Can that student claim child care expenses? Does the answer change depending upon the country the student is from?
Nonresidents cannot claim the U.S. born child because they cannot claim dependents on their return. Once they become residents for tax purposes the child could be claimed as a dependent. The exceptions are students from American Samoa, Canada, Japan, Mexico, the Republic of Korea, Northern Mariana Islands or India. To claim the exemption their spouse must not have received any income during the tax year. If they are from Japan or the Republic of Korea their spouse must also be present in the U.S. with them to claim the exemption. If they are eligible to claim an exemption for your spouse he/she will not have to file a separate U.S. tax return. All dependents must have either a U.S. Social Security Number or an Individual Taxpayer Identification Number.
Can F-1 and J-1 students claim deductions for books and other educational expenses (equipment, mandatory fees, etc.)?
F-1 and J-1 students cannot claim educational expenses such as books, equipment and mandatory fees as deductions. The educational expenses deduction is only allowed when it maintains or improves skills required by current employment, or if they are involved in teaching.
An F-1 or J-1 student present in the U.S. for less than five years has taxes improperly withheld on Social Security and Medicare (FICA). Can the student claim a refund on their tax return of the taxes that were improperly withheld?
No, students cannot claim a refund of FICA taxes on their income tax return. They must obtain a refund by: 1) obtaining a refund from the employer. The employer will need to correct their Form 941 Employment Tax Return for the quarter(s) in question; 2) Complete IRS Form 843 Claim a Refund and Request for Abatement. Submit it with copies of their W-2 for the year in question, a copy of their Form I-94, and proof of permission to work to the IRS with Form 8316.
A student from a tax treaty eligible country fails to claim the exemption (or doesn’t receive the full benefit under the treaty). Can the student claim the treaty benefit on their income tax return?
Yes, a treaty benefit can be claimed when filing an income tax return. CINTAX will prompt the student to claim the tax and make the calculation for them.
An individual comes to the U.S. originally on F-2 (dependent) status and later changes to F-1 student status without leaving the U.S. Can this student claim tax treaty benefits?
No, the student cannot claim tax treaty benefits.
An F-1 or J-1 student receives a 1099INT from their bank indicating the amount of interest they received on checking/savings accounts for the 2010 tax year. Does this interest get reported on their income tax return?
No, interest from checking/savings accounts is not reportable income for nonresidents. Interest received from other sources reported on Forms 1099DIV, MISC, 1099G, 1099R, etc. are reportable sources of income.
Can F-1 and J-1 students claim the standard deduction on their income tax return?
F-1 and J-1 cannot claim the standard deduction on their income tax return unless they are from India. Indian students can claim the standard deduction due to the tax treaty between India and the U.S.
An H-1B professor wants to claim the tax treaty benefit accorded teachers and researchers. Can the professor claim the exemption?
In most cases the professor can only claim the tax treaty benefit if he/she has not passed the substantial presence test. Some tax treaty benefits allow this.
A married couple from India (both are on F-1 student status) worked and earned income during 2010. Can the couple file jointly or must they file separately?
The students must file separately. Nonresidents (in general) cannot file joint returns. Indian can file jointly but only if one of the spouses does not work.
A married F-1 couple is getting ready to file their tax return. One of the F-1 spouses has been in the U.S. for all or part of six tax years, the other, four tax years. What tax return can the couple file?
The couple can file jointly on a resident alien return (1040, 1040A, 1040EZ) because one of the spouses has met the substantial presence test.
An F-1 student receives a 1099R from the State of Ohio (Refund of Retirement Money Withheld). Does the student have to report the income?
Yes, any student who obtains a 1099R must report the income on his/her income tax return. In addition, the student will be assessed a 10% penalty on any income reported on a 1099R.