Tax Information for International Employees
Anyone receiving payments from a U.S. source (Ohio University), whether they are U.S. residents or internationals are subject to U.S. taxation.There are specific regulations and processes required for determining the tax withholdings for all international persons. In certain situations, there could be a tax treaty that may exist to exempt an international person from taxes or there may be regulations that allow a reduction in taxes. For information about current tax treaties available see IRS Publication 901.
Ohio University partners with Arctic international, LLC to provide a secure web based international tax compliance software called GLACIER. The GLACIER software will capture all required information to determine the tax status of an international person. All international persons who are not U.S. Residents and who are receiving payments from Ohio University are required to have a GLACIER record. A GLACIER record is required even if an international employee, student, scholar or visitor meets the definition of a Resident Alien for Tax Purposes.
Once it is determined that you are a foreign national that will be receiving a payment from Ohio University, you will receive an email to your email address on file directing you to the GLACIER website with a temporary username and password. After completing a short questionnaire, the GLACIER program will determine your taxation.
The GLACIER system does the following:
- Makes tax residency, withholding, and income tax treaty determinations
- Provides and manages all taxation paperwork
- Maintains individual taxation and l tax treaty data
- Provides year-end taxation document 1042S
- Provides a process for completing a Federal tax return online
GLACIER should be updated annually or if any of the following changes occur:
- Immigration status (change in visa types)
- Departure date
- Dates present in the United States
- E-mail and home address
- Social Security Number or ITIN
After updating your information, your forms should be signed and submitted along with any required documents as instructed.
Please submit original copies of the following:
- Passport page and expiration date
- Visa stamp
- I-20, I-797, DS-2019, or other employment authorization documents
- Social Security card
If you are a nonresident alien and you have not received GLACIER information or have additional questions, please email email@example.com
Filing Taxes in the United States
As an international student or scholar the income you earn in the U.S. is subject to taxation. Each year, the Internal Revenue Service (IRS) and the State taxation department requires that all individuals earning income in the United States to file a tax return, which is due on April 15 of the following year. As a nonresident alien, you are required to file a federal tax return, Form 1040NR or Form 1040NR-EZ and state tax return Form IT 1040. As an employee of Ohio University, you can complete your federal tax return (1040NR-EZ or 1040NR) through the GLACIER software.
About U.S. Taxes
The United States have many sets of tax laws and levels of taxing authorities. Federal tax law applies to taxes paid to the United States government. State tax laws apply to taxes paid to the state in which you work and/or live. In Ohio there are local and school district taxes. It is important to comply with all federal, state, and local tax laws that apply to you.
The federal and state tax systems are based on a graduated tax bracket system, which means that the percentage of tax a individual will pay is dependent on the amount of income they earn and the number of dependents they have (nonresident aliens can only claim one dependent, unless they are a resident of Canada, Mexico, South Korea or student from India). If you earn a larger salary, you pay a higher percentage in federal and state taxes than someone earning a smaller salary.The local or city taxes (work location) are not on a graduated tax bracket system but a flat percentage tax rate. For example, Athens City taxes are a fixed 1.85 percent.
Residency and Non-residency for Tax Purposes
U.S. tax law categorizes foreign nationals as resident aliens or nonresident aliens for tax purposes only, which is not necessarily the same as residency according to immigration law. Resident aliens for tax purposes will follow the same rules as U.S. citizens for tax purposes. Special taxation rules apply for a nonresident alien for tax purposes. There are also special rules that apply specifically to F-1 students, J-1 students and scholars and H-1B employees who are nonresident aliens for tax purposes. These tax statuses are the most common here at Ohio University and are significant because filing under the incorrect tax designation may result in additional taxes owed to the government.
The U.S. Department of Treasury Internal Revenue Service Publication 519 explains the rules used to determine tax residency for those who are not U.S. citizens.
Non-resident alien for Tax Purposes
Federal Tax filings
If you received U.S. source income in the current calendar year, you are required to file a federal tax return with the IRS (Internal Revue Service). You must complete and mail IRS Form 1040NR or Form 1040NR-EZ and IRS Form 8843. You must file a federal tax return form even if Ohio University withheld money from your paycheck for federal taxes. The amount that is deducted from your paycheck is an estimated amount. If the estimated amount deducted from your paychecks is higher than what you should have paid based on the IRS standard, you may receive a refund of taxes. You must file a tax form to calculate the difference between what you owe and what you paid and determine if you will receive a refund or owe additional tax. Even if a tax treaty was applied to your paychecks during the year and the amount you owe in taxes is reduced or eliminated, you are still required to file a federal tax return with the IRS. You would file IRS Form 1040NR or Form 1040NR-EZ and Form 8843. The GLACIER Tax Prep link on the GLACIER system will provide these forms, if applicable. Not filing a tax return is a violation of U.S. tax law. Filing tax documents each year is an important part of maintaining your immigration status and is a federal requirement for international visitors and their dependents. Not filing your required taxes documents could lead to penalties, such as a fine, or even negatively impact your immigration status.
IRS Form 8843 is a tax form used by foreign nationals to document the number of days spent outside of the U.S. and to help determine tax responsibility. All F and J foreign nationals (and their F-2/J-2 dependents) who are nonresident aliens for tax purposes are required to file Form 8843. You must file form 8843 if BOTH of the following conditions are met:
- You were present in the U.S. in F/J status for any portion of the previous calendar year (the year for which you are filing)
- You are a nonresident alien for tax purposes.
Dependents (including children, regardless of age) should complete a separate Form 8843 independent of the F-1/J-1.
Instructions for form 8843 can be found on the IRS website.
Some international students and scholars are required to file a State of Ohio Tax Form. If you worked in more than one U.S. state during the past calendar year, you may have to file tax returns in all the states in which you resided or worked. You should check the state revenue website of the other state(s) where you worked or lived for assistance in determining your tax filing obligations. The GLACIER Tax Prep link on the GLACIER system only provides assistance with the Federal tax return.
Some cities require completion of a tax return for all residents. You should check with the city you live in. The city of Athens does not require filing of Athens city tax if your withholding obligation was fulfilled in full through employer withholding. Athens city tax withheld will be reported on your W-2 on the top line of 19. Form W-2 box 20 locality name will indicate “Athens”.
School District Tax
Ohio University is located within Athens City school district which has a 1% school district tax. The school district applies to residents of the school district. A nonresident of the school district may be required to file a SD-100 Ohio school district return to indicate nonresident status. If school district tax was withheld from your pay, it will be indicated on the bottom line of form W-2 box 19 and the bottom line of box 20 will indicate the four digit school district numeric code.
Tax Return Deadlines
In order to meet these deadlines, the forms must be postmarked on or before April 15 each calendar year.
In order to complete your tax return, you will need some basic information about your employer, as well as detailed information about your income that you earned during the tax return year. As a nonresident alien, you will receive tax information through Form 1042-S for your tax treaty exemption amount or for your scholarship and fellowship payments. As a nonresident alien you will receive a form W-2 for income paid as compensation through your GRS or on campus employment.
Ohio University is required to furnish your yearly 1042-S by March 15 of the following year. You may elect to receive your 1042-S online through GLACIER. Otherwise, you will receive a copy of your Form 1042-S by U.S. Mail.
Some nonresident aliens may receive both a W-2 and a 1042-S.
A 1042-S Form is a year-end tax document given to a Nonresident Alien who:
- Received a tax treaty benefit
- Received Non-Qualified Scholarship or Fellowship payments
A Form 1042-S will be generated for all of the above through GLACIER. The Form 1042-S will indicate the income code, which describes the type of income that you received during the year.
In certain cases, you may receive multiple 1042-S forms with different income codes.
16 Scholarship or Fellowship
17 Independent Personal Services
19 Teaching or Research
20 Studying and Training
42 Payments to Performers/Artists
43 Payments to Performers/Artists (signed Central Withholding Agreement required)
54 Other Income
Form W-2 reports all taxable wages you received from Ohio University during the calendar year and all taxes withheld from those wages. The form serves as an annual statement that enables you to file your personal income tax return with the Internal Revenue Service (IRS) as well as state and local taxes. Form W-2 reports only wages paid during the calendar year, regardless of when they were earned; that is, it does not include amounts earned but not paid until the next year. Ohio University employees may elect to receive their W-2 electronically or on paper. The paper W-2 forms are required to be post-marked no later than January 31 each year.
Glacier Tax Prep
GLACIER Tax Prep (GTP) software is designed to assist foreign nationals to prepare their U.S. federal tax return. GLACIER Tax Prep is available for Ohio University students and scholars that are classified as non-resident aliens for tax purposes.
GLACIER Tax Prep is able to provide the following services:
- Determine your U.S tax residency status
- Determine eligible tax deductions, credits, and allowances
- Review eligibility to claim tax treaty benefits
- Calculate tax refund or tax due to the IRS
- Prepare all required federal tax returns, statements, and forms for both the student/scholar.
Please make sure you have all your income documents before starting GTP to avoid filing your taxes incorrectly. You will receive income forms only for the income types you received. For example, if you received a Fellowship, then you will receive Form 1042-S. If you did not have a job with wages, then you will not receive Form W-2.
The United States has tax treaties with a number of foreign countries. Under these treaties, residents of foreign countries are taxed at a reduced rate, or are exempt from U.S. federal and state taxes on certain types of income and/fellowship payments they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific types of income. If the treaty does not cover a particular type of income, or if there is no treaty between your country and the United States, you must pay tax on that income. For the list of tax treaty countries and their treaties, reference the IRS Publication 901 on the IRS website.
FICA Tax and Exemptions
General Student FICA exemption:
FICA taxes do not apply to payments received by students employed by a school, college, or university where the student is enrolled full time and pursuing a course of study.
International Student and Scholar FICA exemption:
International students, scholars, professors, teachers, trainees, researchers, physicians and other nonresident aliens for tax purposes present in the United States in F-1, J-1, M-1 or Q-1/Q-2 non-immigrant statuses are exempt from FICA taxes on wages.
Limitations on FICA exemption for International Persons:
The FICA exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 non-immigrant status.
The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 non-immigrants who change to an immigration status which is not exempt or to a special protected status.
The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 non-immigrants who become resident aliens.
The FICA exemption only applies to international persons in F-1, J-1, M-1, Q-1, or Q-2 visas and who are still classified as nonresident aliens for tax purposes under U.S. tax regulations.
International students in F-1 and J-1 non-immigrant status are entitled to the FICA exemption for the first 5 calendar years of physical presence in the United States. After this period of time has passed, international students are classified as Resident Aliens for Tax Purposes and are subject to FICA tax withholding. However, if they remain students they may be able to claim the Student FICA exemption.
The five-year exemption permitted to F-1 and J-1 students also applies to any period in which the international student is in "OPT, optional practical training" allowed as long as the foreign student is still classified as a nonresident alien for tax purposes.
International scholars, teachers, researchers, trainees, physicians, other non-students in J-1, Q-1 or Q-2 non-immigrant status who have been in the United States less than two calendar years are classified as nonresident aliens for tax purposes and are exempt from FICA taxes for that two-year period of time. However, once the two calendar years have passed, this group of international persons is classified as resident aliens for tax purposes and is subject to FICA tax withholding.
Spouses and dependents of alien students, scholars, trainees, teachers, or researchers temporarily present in the United States in F-2, J-2, or M-2 status are NOT exempt from Medicare taxes, and are fully liable for Medicare taxes on any wages they earn in the United States. International persons in H-1B, TN, O-1 or E-3 status are fully subject to FICA tax withholding. No FICA exemption is available to persons in these visa categories.
W-4 Completion for Non-resident Aliens
Step 1 (a): Fill in Personal Information (include complete address with city, state and zip code)
(b): Fill in SSN – leave blank if you have not yet received your SSN
(c): Check the Single or Married filing separately box regardless of your actual marital status.
Step 2: Do not complete this section unless you have more than one job at the same time (not including jobs with Ohio University). Do not account for your spouse’s job because nonresident aliens may not file jointly.
Step 2 (b): If you have more than one job (not including jobs with Ohio University), you may complete Step 2(b) or Step 2(c). See https://www.irs.gov/pub/irs-pdf/n1392.pdf for more information.
Step 3: Only certain nonresident aliens should use Step 3. Nonresident aliens from Canada, Mexico, South Korea, or India may be able to claim the child tax credit or the credit for other dependents. See https://www.irs.gov/publications/p519 or https://www.irs.gov/publications/p972 for more information.
Step 4: Optional -
(a): If you want tax withheld for other income this year that won’t have withholding and the income is taxable in the US, enter the amount of income here – do not include income from jobs.
(b): See https://www.irs.gov/publications/p519 if you expect to claim itemized deductions and/or adjustments to income and enter the amount
(c): Write “nonresident alien” or “NRA” in the space below Step 4(c). If you would like to have an additional $ amount withheld, enter the amount in Step 4(c).
Step 5: Sign and date form
If you have any questions about your classification as a non-resident alien for tax purposes, please contact the Ohio University tax department at firstname.lastname@example.org.