International Student & Scholar Services

International Programs

Tax Information for International Students & Scholars at the University of Pennsylvania

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.

In most instances, international students and scholars in nonimmigrant visa classifications must pay city, state and federal taxes if employed by the University of Pennsylvania.

In certain instances they may be exempted because of tax treaty between the United States and their home country, or if their employment can be considered to be a fellowship, as defined by the IRS.

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.

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. Visit their web site at http://www.finance.upenn.edu/comptroller/tax/ for information of the documentary requirements.

US Federal Income Tax

Each year OIP-ISSS makes CINTAX, a web-based tax preparation software program, available for your use. CINTAX allows you to easily prepare your federal income tax return from any computer connected to the internet.

After you collect all of your tax and immigration information, it should take you only twenty to forty minutes to complete your federal income tax return using CINTAX. Once you answer CINTAX's questions about your immigration status, income, and related matters, CINTAX will produce (in PDF format) your completed federal income tax forms ready for printing, signing, and mailing to the Internal Revenue Service.

To use CINTAX, you will receive in an email message containing the password from OIP-ISSS. If you are currently an international student or scholar at Penn, or if you were an international student or scholar at Penn at anytime during the past tax year, and you did not receive a password from OIP-ISSS, please request your password by email (from your Penn email account) to oipadm@pobox.upenn.edu.

Please note that OIP-ISSS cannot provide email or telephone support for CINTAX, but CINTAX, with its clear format and many help menus, is easy to use to prepare your federal income tax return.

Pennsylvania State Income Tax

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.

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.)

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.

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.

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 Form – front & back (it’s the small white card generally stapled in your passport)
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

IRS Forms can be downloaded at: http://www.irs.gov/formspubs/

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.

	International Programs Penn Abroad \| ISSS \| International Travel and Research
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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. In most instances, international students and scholars in nonimmigrant visa classifications must pay city, state and federal taxes if employed by the University of Pennsylvania. In certain instances they may be exempted because of tax treaty between the United States and their home country, or if their employment can be considered to be a fellowship, as defined by the IRS. 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. 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. Visit their web site at http://www.finance.upenn.edu/comptroller/tax/ for information of the documentary requirements. US Federal Income Tax Each year OIP-ISSS makes *CINTAX,* a web-based tax preparation software program, available for your use. CINTAX allows you to easily prepare your federal income tax return from any computer connected to the internet. After you collect all of your tax and immigration information, it should take you only twenty to forty minutes to complete your federal income tax return using CINTAX. Once you answer CINTAX's questions about your immigration status, income, and related matters, CINTAX will produce (in PDF format) your completed federal income tax forms ready for printing, signing, and mailing to the Internal Revenue Service. To use CINTAX, you will receive in an email message containing the password from OIP-ISSS. If you are currently an international student or scholar at Penn, or if you were an international student or scholar at Penn at anytime during the past tax year, and you did not receive a password from OIP-ISSS, please request your password by email (from your Penn email account) to oipadm@pobox.upenn.edu. Please note that OIP-ISSS cannot provide email or telephone support for CINTAX, but CINTAX, with its clear format and many help menus, is easy to use to prepare your federal income tax return. Pennsylvania State Income Tax 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. 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.) 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. 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. 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 Form – front & back (it’s the small white card generally stapled in your passport) 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 IRS Forms can be downloaded at: http://www.irs.gov/formspubs/ 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.
	International Programs Penn Abroad \| ISSS \| International Travel and Research