Federal Tax

Information

Session

For

International

Students

AGENDA

➢Tax Basics

➢Forms You RECEIVE

➢Forms You COMPLETE

➢Tax Residency Status

➢Tax Filing Information

for Non-residents

➢Tax Treaties

➢Filling out the Tax

“Returns”

➢Completing the

Process

➢State Tax Issues

➢Using the Sprintax

Software

TA X BASICS

DO I HAVE TO FILL OUT TAX FORMS? A AHHH!

No Matter What You Have Heard…

• All “tax non-residents” are required to file at least

one federal income tax form for each year they are in

the U.S. (by April of the following year); this year we

are doing 2019 taxes (if you weren’t in the US, in

2019 you don’t have to do this now!)

• Everyone should copy and keep files for 7 years (or

until you become a permanent resident, if applicable)

WHAT HAPPENS IF I DON’T?

➢ You may be overpaying your taxes (i.e., giving away your hard-earned money)

➢ Non-filing of taxes may affect a future application for U.S. Permanent Residency (i.e., “green card”)

➢ If you owe money, you could be subject to substantial monetary fines

➢ In extreme cases involving fraud, you could lose your legal immigration status in the U.S.

WHICH INCOME TAXES?

• Federal

• State

• Local (none for Albuquerque)

• If you have income you are normally responsible for completing tax forms for ALL relevant governments

• This presentation only covers FEDERAL (US) taxes collected by the Internal Revenue Service (IRS) with some state info at the end

3 THINGS TO REMEMBER:

1)This is NOT a conspiracy against you! (It’s just a pain for everyone!)

2)The rules are NOT logical!

3)YOU are responsible for doing it correctly and YOU suffer the consequences even if you were misinformed. This is more unfair for internationals as very few people know non-resident tax laws (including IRS)

WHO IS THIS PRESENTATION FOR?

➢International Students: Full-time students in F-

1 or J-1 Student Status (individuals in degree

programs, CELAC, exchange students)

➢Dependents: Those who are here in F-2 and J-2 status with no income. Most dependents CANNOT be claimed, but if so will need an SSN or ITIN# (requires form W-7 and supporting documents – see Linda)

OTHER PRESENTATION INFORMATION

• For students with income typical at UNM.

• Otherwise seek professional tax advice from a qualified accountant or attorney

• Rules for students and scholars are different

WHAT IF I HAVE QUESTIONS LATER?

Come to the Tax Volunteer Site!

"Volunteers in Tax Assistance" (VITA) Site

Volunteers will be available to help you:

DATES: March 12, 13, 26, 27 and April 2, 3, 9, 10

TIMES: 1:00 – 4:00 pm

LOCATION: Student Union Building (SUB), Lobo Computer Lab, Lower Level

YOU CAN ALSO CONSULT

•Residents for Tax Purposes:

• UNM Dean of Student’s Office – CFC Volunteers

• CNM VITA Site

• Turbo taxDON’T WAIT UNTIL THE LAST MINUTE!!!

• Students from China may still be able to benefit from a treaty. We can show you at the UNM Non-resident VITA site.

OVERVIEW OF TAX SYSTEM

• U.S. tax system = Employer “withholds” andindividual “reports” at end of year. Employer takes money out based on forms you complete when you start your job (W-4 for income, 8233 for treaty benefits) – you can update this information to change “withholding”

• At year end YOU need to do the accounting; if the calculation was incorrect then either you will owe money or you will get some back

FORMS YOU RECEIVE

C O P I E S M U S T B E S E N T TO I R S W I T H YO U R

TA X “ R E T U R N S ”

FORMS FROM EMPLOYER/SCHOOL

W-2: lists wage income and tax taken for federal, state, and

local governments (if any); must be sent to you by 1/31

1042S: lists scholarship, treaty and award income; must be

sent by 3/15 (UNM sent them the last week of February)

1098T: lists school tuition paid; cannot be used as deduction

by tax non-residents

This information is also sent to IRS

Box 1 = Wages

Box 2 = Federal Tax Withheld

Box 17 = State Tax Withheld

Non-residents should not have amounts taken in 5 &6

Money taken out of your pay

Gross Earned Income

Pan

Box 1 = Income Code/Type

16 = Scholarship Income

20 = Wage Income

Box 2 = Income exempt from tax

Box 7 = Federal Income tax withheld

Box 21 = State Income tax withheld

Income

Type (key

attached)

Gross

Income

Federal tax

already taken

State tax

taken

19

Pan

Employer # Federal

Employer # State

OTHER FORMS YOU MAY RECEIVE

1099-INT: Interest report (Bank sends to you if over $10)

1099-DIV, 1099-B: Dividend/stock report (Financial institution sends)

1099-MISC: Honoraria or contractor income

1095 (A, B, C): shows that you complied with the insurance requirements of the Affordable Care Act

(1095A shows Marketplace insurance subsidy that you must report –B and C just keep for your records)

1099-G: shows state tax refund for prior year

This information is also sent to IRS

FORMS YOU COMPLETE

M A K E C O P I E S F O R YO U R F I L E S !

FORMS YOU SEND TO IRS

8843: Must be completed by all F and J students,

scholars, and dependents who are “tax non-

residents” – if you have no income and no insurance

subsidies you ONLY complete this form.

This form is also called, “Statement for Exempt

Individuals and Individuals with a Medical Condition”

FORMS YOU SEND TO IRS (CONT’D)

1040NR: “U.S. Nonresident Alien Income Tax Return” – LONG FORM

OR

1040NREZ: “U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents” – SHORT FORM

These forms must be completed by tax non-residents with U.S. income. They are also called “Tax Returns” (“Return” you get money back)

IMPORTANT TAX TREATY FORM

8233: Must be completed and given to the UNM payroll office every year if you want to benefit from a tax treaty in advance (i.e., you don’t want them to take extra money from each paycheck)

You can still get the benefits of any treaty when you file your taxes even if you did not complete this form.

IRS INFORMATION/PUBLICATIONS

Publication 519: U.S. Tax Guide for Aliens

Publication 901: U.S. Tax Treaties

These publications have additional information for

those with unusual situations or for whom a tax

treaty exists between the U.S. and the country of

permanent residence

TA X RESIDENCY STATUS

I M P O R TA N T ! ! !

AM I A RESIDENT OR NON-RESIDENT FOR FEDERAL TAX PURPOSES?

• Tax residency determines your basic obligations under U.S. “federal” tax law (state is different)

• You CAN be a “tax resident,” even if you are not a "permanent resident" of the US (green card)

• If you are married to a resident for tax purposes you can choose to file jointly as residents

• If you are a resident taxpayer you must pay federal income tax on your worldwide income.

RESIDENT OR NON-RESIDENT FOR TAX PURPOSES? (CONT’D)

• If you are a nonresident taxpayer, you pay federal income tax only on the income you receive from U.S. sources, but you must file an annual income tax form, even if you had no income

• Most F and J students at UNM are “tax nonresidents”

• If you were in a status other than F or J since your arrival, please see pp. 4-11 of IRS pub 519, U. S. Tax Guide for Aliens you may be “Dual Status”

RESIDENCY TEST FOR STUDENTS

HOW MANY YEARS WERE YOU PRESENT IN THE U.S. IN F, J, M OR Q STATUS?(EVEN ONE DAY OF PRESENCE IN A YEAR COUNTS )

Less than 5 years(e.g., You arrived AFTER

12/31/2014 and you were never

in the US before on F, J, M, or Q

status)

More than 5 years

(e.g., You arrived BEFORE

1/01/2015 or you were in the US

for more than 5 years total in F, J,

M, or Q status since 1985)

You were probably a

“nonresident for tax

purposes” in 2019

You were probably a

“resident for tax purposes”in 2019

TAX RESIDENTS

• “Residents for tax purposes” will need to go

elsewhere for tax information

• You would file: Form 1040 and other forms

depending on your situation

• Get help from the resident volunteers at UNM

Dean of Students, CNM or use Turbo Tax

• You are subject to the Affordable Care Act

requirements of having health care all year!

TAX RESIDENTS

➢You have to report your worldwide income.

➢Tax residents can claim education credits for

tuition that you paid. To do so, you will need to

contact the UNM Bursar’s office to ask for a

1098-T form to get these credits on your

resident tax return.

FILING INFORMATION

FOR NON-RESIDENTS

W H I C H F O R M S ? ? ?

WHICH FEDERAL FORMS?Form # Who Completes?

8843 ALL non-resident students and their dependents. If you did not have any US

income and you did not buy government “Marketplace” insurance, you ONLY need

to complete this form.

1040NR If you received money from a U.S. source, you MUST complete form

1040NR if:

• Your income was $100,000 or more, OR

• You had dividend, capital gains or other U.S. income that is not wage or

scholarship, OR

• You got subsidized insurance from a U.S. health insurance exchange (Info

sent to you on form 1095A). You will need to complete form 8962

You may also WANT to complete Form 1040NR if:

• You can claim a credit for a U.S. born child (you can claim a credit ONLY

if your child is a citizen of the US, Mexico or Canada AND you are from

Canada, Mexico or Korea or a STUDENT from India)

• You contributed money to a U.S. or Canadian charity or had capital

losses

1040NREZ If you received money from a US Source and none of the conditions for

1040NR above apply fill out this EZ form with 8843

8843

E V E RY TA X N O N - R E S I D E N T F I L L S O U T T H I S

F O R M , E V E N D E P E N D E N T S

8843 Student Sample

SSN or ITIN otherwise write “None”

8843 Student Sample

Number of days you were

in student status

8843 Student Sample

8843 Student Sample

Diversity Visa Lottery does

NOT count

Sign here if no tax return needed

NO INCOME?

• If you had no US income and no Marketplace

insurance subsidies in 2019 and you are a non-resident

you are DONE!

• Make a copy for your files and mail before June 15

• If you are leaving the US you can find this form in

January next year at www.irs.gov under form 8843!

MAILING ADDRESS

Internal Revenue Service Center

Austin, Texas

73301-0215

MARKETPLACE INSURANCE?

• If you or your dependents bought Marketplace

insurance in 2019 and you are a non-resident you

still have to complete form 1040NR

• You will also need to complete form 8962

• We will help with both of these forms at the tax

volunteer site

DEDUCTIONS AND EXEMPTIONS TO INCOME

• Very few for Non-residents (charity, state

and local taxes, student loan interest)

• Remember that non-residents will never

get back more than they paid in tax!

INCOME TYPES FOR STUDENTS• Non-service scholarship or fellowship grants

from U.S. sources

➢Amounts granted to cover tuition and fees are not taxable; these amounts do not have to be reported on your tax return)

➢The University or other granting institution should report any portions which are NOTtuition or educational expenses to you on IRS Form 1042-S (e.g., Athletic scholarships and small departmental scholarships at UNM)

INCOME TYPES FOR STUDENTS

• Wages from any U.S. job, including an assistantship (not the tuition portion)

➢ALL income that your employer(s) reported to you on Form W-2)

➢Any amount reported on Form W-2 cannot be considered non-service scholarship or fellowship income but might be treaty exempt income

• Bank interest

OTHER INCOME TYPES(THESE ARE ALSO SUBJECT TO TAX)

• Dividends or capital gains from U.S. mutual

funds, stocks or bonds

• Any other income (such as rent, royalties,

gambling/prizes, copyright earnings) from

U.S. sources

• If you had these types of income you may

want to seek professional advice in

preparing your return

TREAT Y INFORMATION

GENERAL TREATY INFORMATION

• Some countries have tax treaties with the U.S. that save you money on your federal income tax. You can get the treaty benefit even if you did not complete the 8233 in 2019

• Treaty benefits depend on country of last tax residence, not citizenship

• Benefits are different for each country and depend on your U.S. activity (e.g., student or scholar) and type of income

STUDENT TREATY INFORMATION

• For students, these benefits often last for 5

years (the same amount of time you are a tax

non-resident – China is an exception)

• Type of Income IS Important

• I will name countries separately for wage and

for non-service scholarship (and give handout

for those who have appropriate treaties)

STUDENT TREATY INFORMATION• The numbers or Roman numerals in the third

column identify the relevant treaty article and paragraph numbers (you will need these for your income tax return)

• Also note any letters next to the name of your countries; there is a key at the end of the chart

• Indian treaty does not have a dollar amount, but allows students to claim the “standard deduction” (better than “itemized”)

STUDENT TAX TREATY SUMMARYWAGES

Country Maximum Presence

Amount Article # Special Restrictions * see below

Bangladesh 2 yrs. $ 8,000 21 (2) In effect after 01/01/07, b

Barbados - - - **see special note below

Belgium No limit $ 9,000 19 (1)(b) b, g, h ***see special note below

Bulgaria No limit $ 9,000 19 (1)(b) b, g, h ***see special note below

Canada 5 yrs. $10,000 XV a

China No limit $ 5,000 20 (c) b, c

Cyprus 5 yrs. $ 2,000 21 (1) b, i

Czech Republic 5 yrs. $ 5,000 21 (1) b, c, d

Egypt 5 yrs. $ 3,000 23 (1) b, c, i

Estonia 5 yrs. $ 5,000 20 (1) b

France 5 yrs. $ 5,000 21 (1) b, g, h

Germany 4 yrs. $ 9,000 20 (4) b, c, e **see special note below

Hungary - - - **see special note below

STUDENT TAX TREATY SUMMARYWAGES

Iceland 5 yrs. $ 9,000 19 (1) b, c, h

India 5 yrs. Standard Deduction

21 (2) For 2011 this is $5,800

Indonesia 5 yrs. $ 2,000 19 (1) b

Israel 5 yrs. $ 3,000 24 (1) b, c, h

Jamaica - - - **see special note below

Korea 5 yrs. $ 2,000 21 (1) b, f, g, h

Latvia 5 yrs. $ 5,000 20 (1) b

Lithuania 5 yrs. $ 5,000 20 (1) b

Malta No limit $ 9,000 20 (2)

Morocco 5 yrs. $ 2,000 18 b

Netherlands No limit $ 2,000 22 (1) b, c

Norway 5 yrs. $ 2,000 16 (1) b, c

Pakistan No limit $ 5,000 XIII (1)

Philippines 5 yrs. $ 3,000 22 (1) b, f, h

For 2019 this is $12,200

STUDENT TAX TREATY SUMMARYWAGES

Poland 5 yrs. $ 2,000 18 (1) b, f, h

Portugal 5 yrs. $ 5,000 23 (1) b

Romania 5 yrs. $ 2,000 20 (1) b, f, h

Slovak Republic 5 yrs. $ 5,000 21 (1) b, c, f

Slovenia 5 yrs. $ 5,000 20 (1) b, c, h

Spain 5 yrs. $ 5,000 22 (1) b

Thailand 5 yrs. $ 3,000 22 (1) b, c, f, h

Trinidad & Tobago 5 yrs. $ 2,000 19 (1) b, h

Tunisia 5 yrs. $ 4,000 20 b

Venezuela 5 yrs. $ 5,000 21 (1) b

STUDENT TAX TREATY SUMMARYWAGES

* Special Restrictions

a student is taxed retroactively on full amount if income is over $10,000

b if within the time limit, the student may claim tax treaty even if s(he) qualifies as "resident alien" for tax purposes but not applicable for permanent resident or immigrant status. Students from PR China however, may claim the treaty as long as they are primarily enrolled to be a student, even if they become US permanent residents or have immigrant status.

c if treaty benefits are used as a student, they may not be used immediately following as a teacher/researcher

d treaty benefits may be used only once in a lifetime

e tax is retroactive if the student remains past 4 years

f if individual re-establishes home country residency s(he) can claim both student & teacher treaty benefits

g student can claim back-to-back treaty exemptions as a student then as a scholar

h limited to 5 calendar years from date of arrival in the U.S.

i students continuing on for graduate level studies may continue to claim treaty benefits for the additional time needed to complete degree requirements

** Special note: Students from Barbados, Hungary & Jamaica can elect to be treated as a "resident alien" for tax purposes. This benefit is not available to scholars/researchers from these countries.

STUDENT TAX TREATY SUMMARY NON-SERVICE SCHOLARSHIP

Country Maximum Presence

Amount Article # Special restrictions * see below

Armenia 5 years $10,000 VI (1) a

Azerbaijan 5 years $10,000 VI (1) a

Bangladesh No limit No limit 21 (2) In effect after 01/01/07

Belarus 5 years $10,000 VI (1) a

Belgium 5 years No limit 21 (1)

P.R. China No limit No limit 20 (b) b

Cyprus 5 years No limit 21 (1)

Czech Republic 5 years No limit 21 (1)

Egypt 5 years No limit 23 (1)

Estonia 5 years No limit 20 (1)

France 5 years No limit 21 (1)

Georgia 5 years No limit VI (1) a

Germany No limit No limit 20 (3)

STUDENT TAX TREATY SUMMARYNON-SERVICE SCHOLARSHIP

Iceland 5 years No limit 22 (1)

Indonesia 5 years No limit 19 (1)

Israel 5 years No limit 24 (1)

Kazakstan 5 years No limit 19

Republic of Korea 5 years No limit 21 (1)

Kyrgyzstan 5 years $10,000 VI (1) a

Latvia 5 years No limit 20 (1)

Lithuania 5 years No limit 20 (1)

Moldova 5 years $10,000 VI (1) a

Morocco 5 years No limit 18

Netherlands 3 years No limit 22 (2)

Norway 5 years No limit 16 (1)

STUDENT TAX TREATY SUMMARYNON-SERVICE SCHOLARSHIP

Philippines 5 years No limit 22 (1)

Poland 5 years No limit 18 (1)

Portugal 5 years No limit 23 (1)

Romania 5 years No limit 20 (1)

Russia 5 years No limit 18

Slovak Republic 5 years No limit 21 (1)

Slovenia 5 years No limit 20 (1) c

Spain 5 years No limit 22 (1)

Tajikistan 5 years $10,000 VI (1) a

STUDENT TAX TREATY SUMMARYNON-SERVICE SCHOLARSHIP

Thailand 5 years No limit 22 (1)

Trinidad & Tobago 5 years No limit 19 (1)

Tunisia 5 years No limit 20

Turkmenistan 5 years $10,000 VI (1) a

Ukraine 5 years No limit 20

Uzbekistan 5 years $10,000 VI (1) a

Venezuela 5 years No limit 21(1) c

STUDENT TAX TREATY SUMMARYNON-SERVICE SCHOLARSHIP

* Special Restrictions

a also exempt are scholarship/grant amounts of up to $10,000 received from U.S. soruces to provide ordinary living expenses.

b does not include Hong Kong

c students continuing on for graduate level studies may continue to claim treaty benefits for the additional time needed to complete the degree requirements

FILLING OUT THE TA X

RETURNS

COMPLETING THE “TAX RETURNS”

• You can come to the VITA site to complete the forms

or do it on your own using the software (for those

with Marketplace insurance, please come to the site)

• If you don’t understand the question on the software,

please ask!

EARNINGS INFORMATION

• If you have any questions about what is on

these forms (for UNM) contact:

– Wage income: pay@unm.edu

– Scholarship income tax@unm.edu

Both of these offices are at the UNM Business

Center (Lomas and University Blvd)

EARNINGS INFORMATION

• Look carefully at all W-2 and 1042S forms: is all

your income included here?

• If your country has a treaty: has all of the treaty-

exempt income been listed on the 1042S? (if not,

you will need to subtract some income from your

W-2 - some will be wages and some will be treaty

exempt)

EARNINGS INFORMATION

• Add all of your earnings income together from

these forms (interest and dividend income are

separate)

• Subtract all of the income that should have been

covered by the treaty (wage and scholarship related

to study only)

• The remainder is your taxable earnings

Box 1 = Wages

Box 2 = Federal Tax Withheld

Box 17 = State Tax Withheld

Non-residents should not have amounts taken in 5 &6

Money taken out of your pay

Gross Earned Income

Box 1 = Income Code/Type

16 = Non-service Scholarship income

20= Wage income

Box 2 = Income exempt from tax

Box 7 = Federal Income tax withheld

Box 21 = State Income tax withheld

Income Type

(key

attached)

Gross

Income

Federal

tax taken

State tax

taken

1040NREZ Student Sample

Use a US address unless you won’t be here through June

1040NREZ Student Sample

1040NREZ Student Sample

1040NREZ Student Sample

1040NREZ Student Sample

1040NREZ Student Sample

This will be filled in by the software

Sample for student with treaty

$5,000

OTHER DOCUMENTS/QUESTIONS

• Wage income (you will pay tax on what is not covered by a treaty)

• State tax return information from the prior tax year (you need to know if you got a refund in 2019 from your 2018 STATE taxes)

• Treaty information on 1042S code 16 is non-service scholarship, code 20 is wage covered by treaty

• If you had non-service scholarship, did you have any educational expenses?

OTHER DOCUMENTS/QUESTIONS

• What is the amount of state tax you paid in 2019 (on

your W2s and 1042S)?

• What is the amount of federal tax you paid in 2019

(on your W2s and 1042S)?

• What is the Employer ID number for federal taxes

OTHER DOCUMENTS/QUESTIONS

• Did you pay any student loan interest in 2019 that

you were required to pay?

• Did you pay any other income tax to the government

outside of your employer withholding (doesn’t count

sales tax)

• What is the Routing number and Account Number

for your bank?

Amount to

be refunded

Amount Owed

We will enter Site ID#

COMPLETING THE PROCESS• Make sure you have a copy of all documents for

your files

• Mail Together:

– 8843

– 1040NREZ or 1040NR (and 8962 if you had marketplace insurance)

– Copy of W2 (if you have one)

– Copy of 1042s (if you have one)

– Copy of any other earnings forms

– Any payment you owe

MAILING ADDRESSIf you do NOT need to pay any additional federal tax, mail to:

• Department of the Treasury

• Internal Revenue Service

• Austin, TX 73301-0215

If you DO NEED to pay additional federal tax mail with

payment to:

• Internal Revenue Service

• P.O. Box 1303

• Charlotte, NC 28201-1303

GETTING HELPCome to the volunteer hours:

• For students with dependents from Canada, Mexico, or South Korea you will need to apply for ITIN numbers if you can get credits for kids them (only possible if kids are US, Canadian or Mexican)

• For students with income more than $50,000 you need to go elsewhere

NM STATE TAX• Once you complete your federal tax you can

complete the state tax forms

• You will need the “Adjusted gross income” and

“Itemized deduction” amounts to do your forms (see

GEO handout)

• Forms and instructions are on the website:

http://www.tax.newmexico.gov/Individuals

/personal-income-tax-forms.aspx

NM STATE TAX• People who reside in New Mexico for more than

185 days are residents for state tax

• You can only e-file if you have a New Mexico

Driver’s License or State ID AND:

– Have filed before (you have to have an account) OR

– You did not have a treaty, OR

– If you did have a treaty and all of your income was listed

on the 1042S (you aren’t going to list it on the state form

if it was not taxed)

NM STATE TAX• If all your income was exempt by treaty and

was on a 1042S (not a W2) you do NOT need

to file state forms

• BUT! If you had state taxes withheld and you

want the money back, you will need to file state

tax forms

NM STATE TAX

• If you file state tax forms, you have a treaty, and

some of the treaty income was on form W-2,

you should include copies of the federal forms

with your state tax forms

• You may also want to include a letter stating

that you are a federal tax non-resident and that

your income is not taxable because of the

treaty (it is a good idea to include the relevant

text from the treaty -available at www.irs.gov)

PREPARING YOUR FINAL TAX RETURNSCome to the Tax Volunteer Site!

"Volunteers in Tax Assistance" (VITA) Site

Volunteers will be available to help you:

DATES: March 12, 13, 26, 27 and April 2, 3, 9, 10

TIMES: 1:00 – 4:00 pm

LOCATION: Student Union Building (SUB), Lobo Computer Lab, Lower Level

BRING: All immigration and all tax related documents and SSN

SOFTWARE PROGRAM

OR:

• Sprintax.com/university-of-new-Mexico-main-campus

• Access Code: SpTx2019UNINM601F

• You will need to set up an account first

• Make sure to record your password

• UNM has paid for federal filing only for those with

income.

HTTPS://WWW.SPRINTAX.COM/UNIVERSITY-OF-NEW-MEXICO

SOFTWARE PROGRAM• Read the instructions on each page!!!

• Once you have completed the information, you

will be taken to a pdf with many pages of

instructions, and two copies of all of the forms

you must file

• You may want to only print some of these

forms.

• Save the copies for your records!!!

SOFTWARE PROGRAM• Don’t forget to attach your earnings statements

(W-2, 1042s, etc.)

• Make copies for your records!!!

AND

• Mail to the correct IRS address as listed on the

instruction sheet (mail state forms to the correct

state address on the paper)

If you have issues, come to the VITA SITE!