2014TaxSessionF1andJ1Students.docxVIP

Financial Services - Payroll University of Chicago February 17, 2015 April 6, 2015 2014 Tax Session F1 and J1 Students Taxes: How it works Salary/Wages Compensation Scholarship Stipend Fellowship Independent Wages Income Withheld from payments Estimated tax payments Tax Payments File a yearend tax return to reconcile the total (annual) income earned and the taxes already paid Tax Return 1.) Do I have a filing requirement for 2014? 2.) What is my tax residency status? 3.) What type of income did I have (if any)? 4.) What tax forms should I receive? 5.) What tax forms do I file? 6.) How do I complete the tax forms? 7.) How do I get assistance? /taxes Steps to Tax Filing Do I Have a Filing Requirement? Tax ResidencyResident versus Nonresident Determining Tax Residency Tax Residency is determined by the Substantial Presence Test (SPT) To determine, count days of physical presence in the U.S. To “count” your days you use this calculation: Current Year x 1 ________ 1st Previous Year x 1/3 ________ 2nd Previous Year x 1/6 ________ If total equals 183 days or more = Resident for Tax If total equals 182 days or less = Nonresident for Tax Determining Tax Residency EXCEPTIONS to SPT F or J students receive 5 “exempt” years. Not exempt from tax, but of counting physical days of presence in the U.S. towards SPT. (So, for first 5 years, the SPT total will be “0”) J non-students receive 2 “exempt” years (of the past 6 years). (So, typically for the first 2 years, the SPT will be “0” – unless individual has had previous entries to the U.S. as an F, J, M or Q) “Exempt” years are CALENDAR years, not years from date of arrival Determining Tax Residency F1 or J1 Students who arrived for the first time in the US in 2010 or after are NONRESIDENT FOR TAX. F1 and J1 Students get 5 “exempt” years in a lifetime. Consider ALL entries to the US. Apply the SPT based on the CURRENT status. SPT looks at current year and past 6 years. Determining Tax Residency EXAMPLE: