Lets talk about TaxCUNY Graduate School 2018

I. Overview of tax for non-resident students and scholarsII. Student tax behavior in 2017III. Using Sprintax to prepare your tax returnsIV. Questions

Disclaimer: The aim of this presentation is to provide you with a general understanding of tax principles as they apply to international students and as such is for information purposes only. Each individual has a unique tax position and is responsible for his or her own tax determination and compliance.

www.sprintax.com

Topics:

Who must file a 2017 US tax return?

What tax forms should I receive?

Forms you need to complete and send to IRS

No income received- what form do I need to file?

Nonresidents for Tax – Spouses (J2, F2, H4)

What is FICA?What is ITIN?What is a 1098-T? State Tax ReturnsWhat happen if I don’t file my

US tax form(s)? Items you need to prepare

your Federal and State tax returns

Hands Up…

Independent of visa/immigration status

Resident or Non-resident for tax?

Generally, most international students who are on F, J, M or Q visas are considered non-resident for tax purposes.

International students on J1 & F1 visas are automatically considered non-resident for their first 5 calendar years in the US

Scholars/Researchers (and their dependents) on J visas are automatically considered non-residents for 2 out of the last 6 calendar years in the US

If you’ve been in the US for longer than the 5 or 2 year periods, the Substantial Presence Test will determine your tax residency.

If you had no earnings/income in the U.S. – you are still required to declare your non-resident status by completing Form 8843

If you received taxable earnings or income over the personal exemption -$4,050 for 2017 tax year from U.S. sources

If you worked in the US Received a taxable stipend, grant or allowance in 2017 If you overpaid tax which you wish to claim back

Everyone has some type of IRS filing obligation

Who must ‘file’ in 2018?

Form 8843 is the minimum filing requirement for all non-residents

“Statement for Exempt Individuals and Individuals with a Medical Condition.”

Form 8843

US Source Income Above $4,050 for 2017 tax year Wages Taxable Stipend, Grant, Scholarship, Award Interest, rental, royalty or other income

Optional filing Any level of income Claiming a refund

Only opportunity to reclaim overpaid tax, is by filing a return

Requirements for Federal tax filing (Form 1040NR/EZ)

Scholarship for tuition and related expenses

Scholarship received from outside the US

Money transferred from parents/relatives overseas

Income ‘earned’ in their home country (investment income,

rent, job before moving to US, etc.)

Interest on regular savings account

Gift of money from someone in the US*

‘Income’ which does not trigger a filing requirement

• Wages, Salary, Compensation (Employment earnings)W2

• Royalty Payments • Scholarship Stipend/Non-Degree Aid• Independent Contractor Services• Prize/Award/Miscellaneous foreign payments

1042-S

• Rent• Investment Income • Commissions• Other income

1099 Series• State Refunds• Settlements• Fees• Services

What tax (income)documents do students receive?

Income documents Passport Visa - I-20, DS-2019, etc. Entry and exit dates Social security / ITIN 4 c’s

– A comfortable Chair– Clear desk/table space – A strong cup of Coffee– Chocolate bar!Save the Cocktail until you’re finished!

Items needed when preparing a return

Federal tax 1040 NR: “U.S. Nonresident Alien Income Tax Return”or 1040 NR EZ: “U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents”

State tax• Income tax return for each state where student resided/earned income

during 2017

Tip: They are referred to as “Tax Returns”, because they are used to getting money back!

Income tax forms to be completed

Same requirements as visa holder

No joint returns for Nonresidents

Same filing obligations as visa holder Minimum is Form 8843 1040NR/EZ if applicable

Each dependent should mail them in separate envelopes

Nonresident can elect to file as resident – when married to a tax resident

Nonresident Spouse & Dependent(s) filing obligations

Non-resident international students and scholars (J1 & F1) should not be paying FICA

H-1B, J-2 and TN visa-holders, are subject to FICA taxes from their first day of employment.

Usually only applied to off campus employment However resident, graduates and on campus OPT do pay

Opportunity to claim back Form 843 & Form 8316

FICA Taxes

Required when filing Federal return

Most common among scholarship recipients (athletes)

Not needed on Form 8843

Application process is tricky!

CAA may now certify dependents(Certifying Acceptance Agent)

ITIN - Individual Taxpayer Identification Number

Tuition Statement

Mostly used to claim education tax credit

Significant cause of mis-filing

Not relevant for nonresidents

Often all students with an SSN on file with school will get one –even nonresidents, so it causes lots of confusion!

1098-T

Tax scams

Use caution and common sense IRS would never ask for personal details without proper

communication IRS not seeking to penalize anyone – just want to make sure

the fair and correct taxes are paid on time Same format (internationally!) Money owed ‘Instant’ payment will make problem go away Voucher/prepaid credit card reference preferred payment option

New York State Tax Return

Do I need to file New York state tax return?

You must file a NY Tax Return if:

You are a non-resident with New York source income and your New York adjusted gross income exceeds your New York standard deduction, $8,000 for 2017 tax year

You are resident and you have to file a federal return

You may have additional filing responsibilities if you have Yonkers or New York City income.

Most post-graduates, including part time students, J1 international professor, researchers and scholars, and individuals in H4 status are considered NY residents for state and city tax purposes if they both

1) had a place to stay in NY for at least 11 months2) were physically in NY for at least 6 months of the year.

Most full time undergraduate students (F1’s and J1’s) are considered non-residents of NY state and city for tax purposes

Resident v Non-resident for NY State Tax

New Jersey State Tax Return

International students, professors and scholars are considered non-residents for NJ state tax purposes unless they had a “permanent home” in NJ.

Filing obligation for income over $10,000

Filing deadline is 17th April, 2018

1095-A B and C series

Form 1095-A: Healthcare coverage purchased through Health Insurance Marketplace –

‘ObamaCare’ Generally not applicable to international students & scholars Can be used on a ‘resident’ tax return, in limited circumstances

Form 1095-B: Healthcare coverage provided through insurance provider or self-insured

employer You do not need 1095-B for your non-resident return

Form 1095-C: Healthcare provided through employer (generally more than 50 employees) You do not need 1095-C for your non-resident return

Wages Summary

ITIN Applications

Request from Employer/Payer for your ITIN or SSN

Document that proves you are a non resident and eligible for a certain tax treaty

Given to an employer so they can tax you correctly (mostly for residents)

(BEN)

Timelines for a refund

Federal 6 weeks - 6 months Contact IRS to follow up

Tracking your refund ‘Where’s my refund’ Httpss://irs.gov/refunds

Missed a year filed as resident by mistake

Don’t panic - but do set the record straight

Misfiled: 1040X - Amended U.S. Individual Income Tax Return Simple form, similar to 1040

Never filed Catch up Can back file at any stage Can only claim a refund for previous 3 years

Common questions

I received money from a relative overseas – what do I do?

I never filed in 2017 – what do I do?

I filed as a resident by mistake, what do I do?

Can I have the refund paid into a bank account?

I never received the income documents, what do I do?

Implications of not filing

International students are required to comply with all US laws, including IRS

Filing tax forms (even if only 8843) is part of maintaining visa status in US

Not filing could affect future immigration status (like H1B, LPR)

Fines, penalties, interest can accrue if funds are owed

If you don’t owe, claim a refund!

I. Overview of tax for non-resident students and scholarsII. Student tax behavior in 2017III. Using Sprintax to prepare your tax returnIV. Questions

Federal Refund State Refund

86%Received Refund

Average CUNYRefund

$777

74%Received Refund

Average CUNY Refund

$353

$54m in Federal Tax Refunds

$13m in State Tax Refunds

($311,559 – CUNY)

$86,466 - CUNY

I. Overview of tax for non-resident students and scholarsII. Student tax behavior in 2017III. Using Sprintax to prepare your tax returnIV. Questions

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