• Tax Information
    • Tax Information

In general, international students and scholars in nonimmigrant visa classifications must pay city, state and federal taxes if employed in the U.S.  However, they may be exempted from certain of these taxes because of tax treaties between the United States and their home countries, or if their employment can be considered a fellowship, as defined by the IRS.

  • Tax Determinations for F-1 and J-1 Status
    • Tax determinations are complex and do not always follow the categories of immigration law. Depending on the particular circumstances, an international student or scholar in F-1 or J-1 status could be considered a "nonresident alien for tax purposes"; under other circumstances, the same nonimmigrant could be considered a "resident alien for tax purposes."  Most F-1 and J-1 students are considered to be nonresidents for taxation purposes during their first five years of presence in the US. J-1 scholars are considered to be non-residents for taxation purposes during their first two years of presence in the US. It is important to note that these are calendar years, so if you arrive at any point in a year, even on December 30, that will count as the first year of presence.
    • In addition, students in F-1 and J-1 status do not pay US Social Security and Medicare (FICA) taxes for the first five calendar years of presence in the US. Scholars in J-1 status are exempt from FICA for the first two calendar years of presence in the US. After that point, they become resident taxpayers and are subject to FICA withholdings. Holders of H-1B status are subject to FICA withholdings, and are generally considered to be tax residents after their first six months of presence in the US.
    • If you are considered a "nonresident alien for tax purposes", please be aware that some popular tax programs, including TurboTax, may not include the required forms for this tax status.
    • The University's Corporate Tax Office (located in 329 Franklin Building) may assist a student, scholar or department in determining the student's or scholar's tax status.  However, if you have more complex questions about tax related issues or tax treaties, we recommend that you contact a tax professional.
  • Tax Email Instructions to Students
  • February 18, 2014

    Dear International Student,

    It's that time of year again when almost every international student must prepare and file an annual federal income tax statement or "tax return."

    Please read the tax information on the ISSS website: http://global.upenn.edu/isss/tax

    ***Please note that you may not yet have all of your personal tax documents from Penn that you will need to file your 2013 income tax returns.*** If you received what is classified as a non-service scholarship from Penn in 2013 or had income covered by a tax treaty, Penn will report this income to you on Form 1042-S. You should receive Form 1042-S by March 15th. If you think you have 2013 income reportable on Form 1042-S you should wait until you receive your Form 1042-S before preparing your 2013 tax returns. Please do not contact ISSS for your tax documents, as they will become available on your Penn Portal once they are ready. If you have not received them by March 15 you should contact the University's Payroll office.

    If you are an F-1 or J-1 student who first entered the US in F or J status after December 31, 2008, you are a "nonresident" for federal tax purposes. Non-resident students who had no US-source income in 2013 are not required to file a tax return; they must, however, file the Form 8843. If you first entered as an F or J student before this date, you probably still have to file-- at least if you earned any money in the US that was subject to federal withholding tax. If you earned any money in the US in 2013, you must file your tax returns by April 15, 2014. If you had no U.S.-source income or had only non-service scholarship income in 2013, you have until June 16, 2014 to file. Please note that dependents in F-2 or J-2 status must also file Form 8843 if they were physically present in the US for even one day in 2013.

    TAX PREPARATION SOFTWARE FOR YOUR USE

    This year ISSS is again offering a web-based tax preparation software program called Windstar Foreign National Tax Resource to all Penn international students.

    FNTR includes an extensive, searchable content library which will allow you (and if applicable, your dependents) to easily prepare Forms 1040NR, 1040NR-EZ and 8843. FNTR also includes tax treaty analyses and explanations, and provides a tax resource page for each state.

    In order to use Windstar FNTR, first log into iPenn at https://www.ipenn.oip.upenn.edu using your Pennkey and password. If you are unable to login with your Pennkey, return to https://www.ipenn.oip.upenn.edu and click "Limited Services" and log into your account as follows:
    University ID: Tax2013
    Date of Birth: (your own date of birth)
    Your PIN: (see email)
    After you log in, select "Taxes" on the left menu.

    Please note that ISSS does not have expertise to assist you in preparing your tax return. We are confident that you'll find FTNR easy to use to prepare your 2013 federal income tax return. Should you have questions, however, please contact FTNR by e-mail at Windstar.fntr@thomsonreuters.com

    For Pennsylvania state tax information, please visit our tax website for general information and links to PA forms and instructions.

    For a list of professional tax preparers, please check the Yellow Pages of your telephone directory.

    Regards,
    ISSS Staff

  • Tax Email Instructions to J-1 Scholars
  • February 18, 2014

    Dear J-1 Scholar,

    It's that time of year again when almost every J-1 scholar must prepare and file an annual federal income tax statement or "tax return."

    Please read the tax information on the ISSS website: http://global.upenn.edu/isss/tax

    ***Please note that you may not yet have all of your personal tax documents from Penn that you'll need to file your 2013 income tax returns.*** If you received non-service income from Penn in 2013 or had income covered by a tax treaty, the University will report this income to you on Form 1042-S. You should receive Form 1042-S by March 15th. If you think you have 2013 income reportable on Form 1042-S you should wait until you receive your Form 1042-S before preparing your 2013 tax returns. Please do not contact ISSS for your tax documents, as they will become available on your Penn Portal. If you have not received your documents by March 15, you should contact the University's Payroll office.

    If you are a J-1 scholar who first entered the US in J status after December 31, 2011, you are a "non-resident" for federal tax purposes, and if you received U.S.-source income during 2013 you must file a federal income tax return for the year 2013. If you entered the U.S. earlier or are here on another type of visa, you probably still have to file-- at least if you earned any money in the US that was subject to federal withholding tax-- but you are probably a "resident" for federal tax purposes and will fill different forms than a non-resident. If you had U.S.-source income in 2013, you must file your federal tax return by April 15, 2014. If you had no U.S.-source income or had only non-service income in 2013 you have until June 16, 2014 to file. Please note that dependents in J-2 status must also file Form 8843 if they were physically present in the US for even one day in 2013.

    TAX PREPARATION SOFTWARE FOR YOUR USE

    This year ISSS is offering a web-based, tax preparation software program called Windstar Foreign National Tax Resource to all Penn international scholars.

    FNTR includes an extensive, searchable content library which will allow you (and if applicable, your dependents) to easily prepare Forms 1040NR, 1040NR-EZ and 8843.  FNTR also includes tax treaty analyses and explanations, and provides a tax resource page for each state.

    In order to use Windstar FNTR, first log into iPenn at https://www.ipenn.oip.upenn.edu using your Pennkey and password. If you are unable to login with your Pennkey, return to https://www.ipenn.oip.upenn.edu and click Limited Services and log into your account as follows:
    University ID: Tax2013
    Date of Birth: (your own date of birth)
    Your PIN: (see email)
    After you log in, select Taxes on the left menu.

    Please note that ISSS does not have expertise to assist you in preparing your tax return. We are confident that you'll find FTNR easy to use to prepare your 2013 federal income tax return. Should you have questions, however, please contact FTNR by e-mail at windstar.fntr@thomsonreuters.com

    For Pennsylvania state tax information, please visit our tax website for general information and links to PA forms and instructions.

    For a list of professional tax preparers, please check the Yellow Pages of your telephone directory.

    Regards,
    ISSS Staff
     

 

U.S. Federal Income Tax

  • Windstar FNTR Web-Based Tax Preparation
  • This year ISSS is again making a web-based tax preparation called Windstar Foreign National Tax Resource (FNTR) available to all Penn international students and scholars.  FNTR includes an extensive, searchable content library which will allow you (and if applicable, your dependents) to easily prepare Forms 1040NR, 1040NR-EZ and 8843.  FNTR also includes tax treaty analyses and explanations, and provides a tax resource page for each state.

    • In order to use Windstar FNTR, first log into iPenn using your Pennkey and password.  In case you are unable to login with your Pennkey, ISSS will send an email message with alternate login instructions to all international students and scholars who were at Penn anytime during the past tax year.
    • After you log in, select "Taxes" on the left menu.  iPenn will give you a Windstar FNTR access code and a link to the Windstar FNTR account registration form.  Use the access code to create your Windstar FNTR account.

    Please note that ISSS does not have expertise to assist you in preparing your tax return.  We are confident that you'll find FNTR easy to use to prepare your 2013 federal income tax return.  Should you have any questions, however, please contact FNTR by email at windstar.fntr@thomsonreuters.com

  • Be Aware Of Scams
  • Please know that the Internal Revenue Service (IRS) will not contact anyone via email. If you receive such an email, you should not open it as it likely contains some sort of virus or malware. You should not provide your SSN/ITIN to anyone via an email.

    Should you have any tax-related questions, please contact a professional tax preparer.

    Please take a moment to carefully read the following messages from the IRS.

  • Refund e-Mail Scam
  • There are several variations of the refund scam, in which an e-mail claiming to come from the IRS falsely informs the recipient that he or she is eligible for a tax refund for a specific amount. The bogus e-mail instructs the recipient to click on a link to access a refund claim form. The form requests personal information that the scammers can use to access the e-mail recipient's bank or credit card account. This notification is phony. The IRS does not send unsolicited e-mail about tax account matters to taxpayers. Filing a tax return is the only way to apply for a tax refund; there is no separate application form. Taxpayers who wish to find out if they are due a refund from their last annual tax return filing may use the "Where's My Refund" link at www.irs.gov - the only official IRS Web site.

  • Substitute Form 1040 Fax Scam
  • This scam consists of a cover letter and form that are faxed, rather than e-mailed. The cover letter is addressed "Dear Valued Tax Payer (sic)" and appears to be signed by an IRS employee. The letter says that the IRS is updating its files and that recipients who supply the requested information will receive a nominal tax refund. It also states that those who fail to immediately return the completed form risk additional tax and withholding. The attached form is labeled a substitute Form 1040 and is titled "Certificate of Current Status of Beneficial Owner For United States Tax Recertification & Withholding." It requests a large amount of detailed personal and financial information, such as mother's maiden name (often used in security screening), bank account numbers, estimated assets and more. It asks the recipient to sign and fax back the completed form, as well as a copy of the recipient's driver's license and passport. The letter, signature and form are all fraudulent. Moreover, the IRS does not send unsolicited faxes to taxpayers and does not request such detailed personal and financial information.

 

Pennsylvania State Income Tax

  • Meeting Your State Tax Obligations
  • Meeting your tax obligations to the State of Pennsylvania is easier in two respects: the state tax rate is lower than the federal tax rate; and the State of Pennsylvania treats you exactly like it treats US citizens; there are no special rules or forms for international students. There are some important points to keep in mind, however, as you plan to meet your Pennsylvania State tax obligations.

    • First of all, to avoid confusion, please note that your nonresident or resident status for federal income tax purposes has nothing whatsoever to do with your nonresident or resident status for Pennsylvania state tax purposes. Please note also that any federal tax treaty benefit that you may have does not apply to Pennsylvania taxes.
    • You are usually considered a nonresident for Pennsylvania state tax purposes if you were in Pennsylvania solely to study as a full-time student for the past tax year.
    • You are usually considered a resident for Pennsylvania state tax purposes only if you were in Pennsylvania more than 183 days in the calendar year for a purpose other than study and you lived in housing that you leased for a period of 12 months. 
    • If you are a nonresident for Pennsylvania state tax purposes, you must file a Pennsylvania state tax return on Form PA-40 if you had more than the stated minimum in Pennsylvania taxable income for the year (checking the "Nonresident" box on the Form) even if no tax is due. You may be able to file your state tax return by telephone or internet if you have received a mailing from the PA Department of Revenue indicating that you can do so. If you were a nonresident your Pennsylvania taxable income includes only wages that you earned in Pennsylvania. It does not include any interest or dividends that you received during the past tax year.
    • If you are a resident your Pennsylvania taxable income includes wages that you earned and interest and dividend payments that you received while living in Pennsylvania during the tax year.
    • Whether you are a nonresident or resident for Pennsylvania state tax purposes, please note that any non-service scholarship income that you received, including portions paid to you to cover living expenses, is not Pennsylvania taxable income.

 

Other Taxes and Resources

  • Philadelphia City Wage Tax
  • In one respect, meeting your Philadelphia city tax obligation is easiest of all: you don't have to do a thing about your city taxes. Philadelphia city tax is a wage tax, not an income tax; that is, it is only applied to your earned income, not to your interest, dividend, or capital gains earnings.

    If you worked in Philadelphia during the tax year, your employer automatically deducted your city taxes from your pay checks and sent the money to the city. Unlike the Pennsylvania and Federal governments, there are no forms or reporting to complete. Also, you usually have no reason to contact them because there is no way to get any money back. (Occasionally people who work in the city but live in the suburbs are mistakenly charged the slightly higher city residents wage tax. If this happens, the city will refund the difference, but the difference is small. No matter where you live, if you work in Philadelphia you pay a city wage tax.)

  • Social Security (FICA) Tax Prevention and Recovery
  • If you are a foreign student or scholar on an F- 1 or J- 1 visa, and if you are also a nonresident alien for federal income tax purposes, you are exempt from Social Security (FICA) taxes (including Medicare tax) on income earned in the United States.

    F-1 or J-1 students usually become residents for federal tax purposes after five years in the US.

    J-1 scholars usually become residents after two years, including any prior time spent as an F-1 or J-1 visa holder.

    If you are an F or J visa holder who is considered a resident alien for tax purposes, your wages are subject to Social Security (FICA) and unemployment (FUTA) taxes on the same terms which apply to US citizens. J-2 and H visa holders, whether resident or nonresident, are also subject to Social Security tax. Social Security tax and benefits apply to US permanent residents on the same basis as US citizens.

    Regardless of immigration or tax residency status, income from the following is not subject to Social Security tax:

    • Services performed by an enrolled student for the school he/she regularly attends during the school year
    • Services performed for state or local government, unless an agreement with the federal government is involved
    • Services performed for a foreign government
    • Services performed for an international organization
  • Preventing Social Security Tax Withholding
  • Employers are frequently unaware of this provision of the Social Security tax law. This document, which includes citations of the relevant law, should help you demonstrate to an employer that as a nonresident F- 1 or J-1 student or scholar you are exempt from Social Security taxes.

    Section 3121(a-c)(19) of the Internal Revenue Code defines and discusses “wages”, “employment” and “employee” and Section 3121 (b)(19) specifically explains how F and J visa holders are exempt, stating that the term “employment” for FICA (Social Security) tax purposes will not include:

    …service which is performed by a nonresident alien individual for the period he is temporarily present in the U.S. as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act, as amended, and which is performed to carry out the purposes specified in subparagraph (F), (J), (M), or (Q), as the case may be.

    To qualify for the tax exemption of Section 3121(b)(19), an individual must:

    • Be a nonresident alien for income tax purposes

    As mentioned earlier, F-1 or J-1 students usually become residents for federal tax purposes after five years in the US; J-1 scholars usually become residents after two years, including any prior time spent as an F-1 or J-1 student/scholar.

    Note: Individuals who are residents for tax purposes because they hold the green card or meet the substantial presence test are not exempt under section 3121 (b)(19). The substantial presence test formula is available on the IRS web site at: http://www.irs.gov/businesses/small/international/article/0,,id=96352,00.html.

    • Be the holder of F, J, M or Q status (for Penn purposes, this only applies to those in F and J status). Status is documented on the I-94 card (if issued paper I-94) or US entry/admission stamp in passport  (if issued electronic I-94)
    • Perform services to carry out the purpose of his/her visa

    This is documented through the specific visa type since individuals are only permitted to work and earn income for activities directly related to the primary purpose of the issuance of their visa category. For instance, F-1 students may work on-campus without special authorization and off-campus with appropriate employment authorization (OPT or CPT). J-1 scholars are permitted to earn income while they are in the US pursuing their activity (research, teaching, etc.).

    Note: dependents of F, J, M or Q visa holders are not eligible for exemption from Social Security (FICA) & Medicare taxes.

    For more information, refer to Publication 515: Withholding of Tax on Nonresident Aliens and Foreign Entities in the Withholding on Specific Income section under Pay for Personal Services Performed and Publication 519: US Tax Guide for Aliens in Chapter 8: Paying Tax Through Withholding or Estimated Tax under Student and Exchange Visitors contain helpful information for employers.  Both can be found on the IRS website at www.irs.gov.

  • Recovering Wrongly Held Social Security Tax
    • Employer Agrees to Refund Taxes Wrongly Withheld

    Occasionally Social Security tax is withheld in error. If your employer has already withheld Social Security taxes from you, you should ask the employer to refund the taxes to you. The employer can deduct the amount refunded to you from the company's next Social Security tax payment to the Internal Revenue Service and no further action is required from you.

    • Employer Does Not Agree to Refund Taxes Wrongly Withheld

    In case your employer is unable to stop withholding or refund Social Security taxes wrongly withheld, you can obtain a Social Security tax refund from the Internal Revenue Service (a process that can take more than six months). Prepare the following documents and mail the application to the IRS to regain wrongly withheld Social Security taxes:

    • Completed IRS Form 843, Claim for Refund and Request for Abatement
    • Completed IRS Form 8316, Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa
    • Copy of your W-2 Form(s)
    • Copy of your most recent nonresident income tax return (if available)
    • Copy of your I-94 Card – front & back (if issued paper I-94) or I-94 printout or US entry/admission stamp in passport (if issued electronic I-94)
    • Copy of your I-20 or DS-2019 Form – front & back
    • Copy of your permission to work in the US (EAD card, CPT authorization, etc.)
    • A written statement from your employer showing the amount of refund requested and the amount (if any) reimbursed by the employer. If you cannot obtain such a statement, you must verify that you have contacted your employer and that the employer was unable to assist you with the refund
    • Mailing Instructions -- make a copy of your application and mail all above documents via courier to return receipt to the IRS at:

    Internal Revenue Service Center, Austin, TX 73301 

    • Do not mail this application with your annual Federal Income Tax Returns.
  • Changes to ITIN Application Requirements
  • On June 22, 2012, the Internal Revenue Service (IRS) announced important interim changes to its procedures for issuing Individual Taxpayer Identification Numbers (ITINs), which required most ITIN applicants to submit original documentation establishing identity and status, along with the ITIN application (W-7). 

    • At that time, an exception was made for nonresident aliens applying for ITINs for the purpose of claiming tax treaty benefits or for certain other kinds of income.  The exception applied only to those submitting the Form W-7 without a tax return.  The IRS made available a set of questions and answers (link to FAQs) for ITIN applicants.
    • On October 2, 2012, the IRS established another exception to the general policy.
      • One of these applies to individuals admitted to the U.S. under and F, J or M visa who receive taxable scholarship, fellowship or other grants reportable by the school on Form W-2 or Form 1042S, and who will file a tax return. 
      • These individuals may provide copies of the required documentation to a Designated School Official or Responsible Officer (the staff of the ISSS office) who will be able to certify the authenticity of the documentation. 

    For a list of supporting documentation required for the W-7, please see:

    http://www.irs.gov/pub/irs-pdf/iw7.pdf

    The W-7 can be downloaded from the IRS web site:

    http://www.irs.gov/pub/irs-pdf/fw7.pdf

    Please see an ISSS advisor if you are filing the W-7 concurrently with your federal tax return.

  • Other Resources
    • Other US Tax Forms: Download forms from the Internal Revenue Service.
    • Pennsylvania Tax Forms: Download forms from the PA Department of Revenue.
    • Income Tax Treaties: Full texts of tax treaties between the US and foreign countries and the related US Treasury Department Technical Explanation on the IRS website.
    • TheTaxGuy.com: A commercial site offering information and for-fee tax return preparation for international students and scholars.

Note: ISSS tax information is intended only for international students and scholars at the University of Pennsylvania with income sources and levels typical of students and scholars (in F or J status) at the University. The University of Pennsylvania hereby disclaims all warranties as to the accuracy of such information and shall have no liability of any kind for any use made of such information by any person or organization. You should seek professional tax advice from a qualified accountant or attorney if you have questions or need clarification.