Tax Considerations for Non-Resident Alien Students

Tax Considerations for Non-Resident Alien Students

This page addresses tax considerations for Non-Resident Alien Students, Scholars and Fellows. For information on determining residency status, see Overview: Determining Residency Status for Tax Purposes.

All students, scholars and fellows receiving financial support or wages from Stanford must have a U.S. social security number or ITIN (Individual Taxpayer Identification Number) on file with the University. For further details on Social Security Numbers and ITINs, see Bechtel International Center web site .

Support provided and/or wages paid to students and fellows by the University are taxable for the recipient.

On this page:

For All International Students / Scholars / Fellows:

Important Disclaimer

This web site provides general information regarding the complex subject of personal U.S. and California income tax responsibilities of non-US citizens. The student or scholar may also be subject to the regulations of other jurisdictions including other states of the U.S. and other nations. The law in this area may vary in its application according to individual circumstances and is subject to change.

Stanford University cannot provide formal tax advice to individuals. Accordingly, no information on this site may be considered formal tax advice. Consult appropriate tax counsel as necessary.

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Tax Exemptions for Non-Resident Aliens

Non-resident aliens on F-1 and J-1 visas are exempt from paying FICA (Social Security and Medicare) taxes until they become residents for tax purposes. F-1 and J-1 students generally maintain non-resident status for their first 5 calendar years in the U.S. Students also fall under the student FICA exemption, so generally do not pay FICA taxes even after they become residents for tax purposes. J-1 researchers generally maintain non-resident status for their first 2 calendar years in the U.S. On January 1 of the third calendar year of presence, they begin to pay FICA taxes. All other non-residents, including H-1B, J-2 and TN visa-holders, are subject to FICA taxes from their first day of employment. To establish exemption from FICA taxes, non-resident alien employees should submit a completed Withholding Allowance Declaration Form to Payroll listing all entry and exit dates to the U.S. so residency status can be determined. Reference Quick Steps: Declare or Change Withholding Allowances.

A non-resident alien loses this exemption when he or she becomes a resident either through the acquisition of an alien registration card (green card) from the Naturalization and Immigration Service, when he or she changes to an H-1B or other non-eligible visa, or through the satisfaction of the Substantial Presence Test.

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Tax Forms Sent to Students from Stanford

  • For wages (paid twice a month), a W-2 will be sent annually, at the end of January, by the Payroll Department. See Quick Steps: Order Duplicate W-2 Statement if you do not receive this form.
  • Many non-U.S. residents will receive Form 1042-S, each year in late March, reporting fellowship amounts received, taxes withheld and payments not taxed due to a treaty exemption. Submit a HelpSU ticket to Payroll if you do not receive Form 1042-S, or if you require duplicate forms.

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Tax Forms for Students to File with Governmental Agencies

Tax forms for international students to file at calendar year end with the IRS and California Franchise Tax Board include:

  • Federal Form 1040-NR
  • California State Form 540 (Non-U.S. residents are considered residents by the state of California for tax reporting purposes)

Simpler versions of tax forms such as the 1040-EZ or 1040NR-EZ may be used when circumstances permit. Information for these forms may be found at the following sites:

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If You Work at Stanford: Taxation of Student Pay and U.S. Tax Treaties

Student employee pay is subject to federal and state income tax withholding and is reported on Form W-2. Work performed in California is subject to withholding and reporting to California, regardless of residency status of the student. Registered degree-seeking students do not pay FICA (Social Security and Medicare) taxes and California Voluntary Disability Insurance.

To determine whether or not a tax treaty exists between your country and the U.S., see:

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Where to Get Assistance

For assistance with tax withholding, tax treaty and tax form issues, submit a HelpSU request (Category: Central Office, Type: Payroll). Payroll will respond within 1 business day.

International students at Stanford are encouraged to attend one of the tax workshops held at Bechtel International Center in March or April. These workshops cover the mechanics of filling out the required forms for non-residents. See Federal Tax Help-Sheet for Non-Residents at Bechtel International Center web site.

Anyone needing advice or interpretation of tax law should consult a competent tax counsel or attorney.

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For International Graduate Students / Scholars / Fellows:

Tax Considerations for International Graduate Students / Scholars Receiving Financial Support (Fellowships and Assistantships)

For degree-seeking (matriculated) students, the tuition portion of fellowships and assistantships is exempt from tax. Nonmatriculated students are subject to tax on any tuition support received.

Fellowship stipends and assistantship salaries are considered taxable for the recipient. The tax obligation varies according to the student's total income, dependency status, treaty status, and individual circumstances.

Federal tax is withheld from student quarterly fellowship stipends or postdoctoral scholar / non-matriculated monthly fellowship stipends paid to non-U.S. residents. Residents of certain counties may be able to claim a tax treaty benefit for reduced federal taxation. The recipient is responsible for making any estimated tax payments for California. See Form 540ES at the California Franchise Tax Board web site for information on making estimated tax payments.

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Regulations for Taxation of Graduate Financial Support for International Students / Scholars

  • Fellowship stipends paid to non-U.S. residents are subject to a 14% federal withholding.
  • Non-U.S. residents may be eligible for tax exemption on fellowship stipends and/or assistantship salaries if their country of residence has an existing tax treaty with the US. Reference Quick Steps: Claim Tax Treaty for Fellowship Payments, Quick Steps: Claim Tax Treaty for Salary Payments.
  • Fellowship funds used to pay for tuition, books, and fees which are required for enrollment may be excluded from the income reported. Money used to pay for these items may not be subtracted from wage income.
  • Students will receive a W-2 form covering Stanford salaries, including assistantships. They will not receive a tax statement of fellowship stipends. Any fellowship received in excess of tuition and fees required for enrollment (health insurance, campus health services fee, ASSU fees and document fees) is taxable for the recipient.

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