tax_presentation_students.pdf

1. Federal Tax
Information
Session
For
International
Students

2. Agenda
 Tax Basics
 Forms You RECEIVE
 Forms You
COMPLETE
 Tax Residency Status
 Tax Filing Information
for Non-residents
 Treaty Information
 Filling out the forms
 Completing the
Process
 State Tax Issues
 Using the “FNTR”
Software

3. Tax Basics

4. DO I HAVE TO FILL OUT TAX
FORMS? Aahhh!
No Matter What You Have Heard…
 All “tax non-residents” are legally required to file
at least one federal income tax form for each
year they are in the U.S. (by April of following
year); this year we are doing 2018 taxes (if you
weren’t in the US, in 2018 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)

5. 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.

6. 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

7. 3 Important 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)

8. 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)

9. 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
 Special Cases: Special treaties: Canada,
India, Korea, Mexico (we will discuss these at
the end)

10. What happens if I have questions later?
Come to the Tax Volunteer Site!
"Volunteers in Tax Assistance" (VITA) Site
Volunteers will be available to help you:
 March 7, 8, 21, 22, 28, 29 and April 4, 5
1:00 – 4:00 pm
WHERE: Student Union Building (SUB),
Lobo Lair Computer Lab, Lower Level

11. You Can Also Consult:
 Residents for Tax Purposes: Go to CNM
website for appointment with the Resident tax
volunteers, or seek paid preparers – DON’T WAIT
UNTIL THE LAST MINUTE!!!
 Students from China may still be able to benefit
from the treaty, CNM cannot help so we can give
you some information at the VITA site.

12. Overview of Tax System:
 U.S. tax system = Employer “withholding” +
individual “reporting” at end of year. They take
money out based on forms you fill out (W-4 for
income, 8233 for treaty benefits)
 At year end YOU need to do the accounting; if
the calculation was incorrect then either you
will owe money or get it back
 If you worked at UNM all year, completed
employment forms correctly, and your situation
did not change, the tax withheld should be
“near” correct – this year may be different

13. Forms you RECEIVE
Copies MUST be sent to IRS with
your tax returns

14. Forms From Employer/School
W-2: lists wage income and tax taken for
federal, state, and local governments (if
applicable); must be sent to you by 1/31
1042S: lists scholarship and treaty income;
must be sent by 3/15 (UNM sent them
Tuesday)
1098T: lists school tuition paid; cannot be
used as deduction by tax non-residents
This information is also sent to IRS

15. 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

16. Box 1 = Income Code/Type
16 = scholarship, 20 = wage
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
Pan

17. Other Forms You May Receive
1099-INT: Interest report (Bank sends to you if over
$10)
1099-DIV: Dividend report (Financial institution sends to
you – if you have this you will use 1040NR)
1099-MISC: Honoraria or contractor income report
1095 (A, B, C): shows that you complied with the
Affordable Care Act (ACA) insurance mandate –
required for tax residents (A shows subsidy)
1099-G: shows state tax refund for prior year
This information is also sent to IRS

18. Forms you COMPLETE
Make copies for your files!

19. Forms You Send to IRS
8843: Must be completed by all F and J
students, scholars, and dependents who are
“tax non-residents.”
This form is also called, “Statement for
Exempt Individuals and Individuals with a
Medical Condition.”

20. Forms You Send to IRS (Continued)
1040NR: “U.S. Nonresident Alien Income Tax
Return”
OR
1040NREZ: “U.S. Income Tax Return for Certain
Nonresident Aliens with No Dependents”
These forms must be completed by tax non-
residents with U.S. income. They are also
called “Tax Returns” (“Return”  you get
money back)

21. Important Tax Treaty Form
8233: Must be completed and given to the
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 at
when you file your taxes even if you did not
complete this form

22. IRS 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

23. Tax Residency Status

24. 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.

25. 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”

26. Residency Test for Students
STUDENTS (F-1 or J-1):
In how many years were you present in the
U.S. in F, J, M or Q status?
Less than 5 years
(e.g., You arrived AFTER
12/31/2013 and you were never
in the US before on F, J, M, or Q
status)
More than 5 years
(e.g., You arrived BEFORE
1/01/2014 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 2018
You were probably a
“resident for tax purposes”
in 2018

27. 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!

28. Tax Residents
 You have to report your worldwide income.
 Remember, that as a tax resident, you 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.

29. Filing Information for
Non-Residents
Which Forms???

30. Which federal forms?
Form # Who Completes?
8843 ALL non-resident students and scholars 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 You MUST also complete form 1040NR if:
a. Your income was $100,000 or more, OR
b. You had dividend, capital gains or other US income that is not wage
or scholarship, OR
c. You got subsidized insurance from a US health insurance exchange
(Info sent to you on form 1095A), you will need form 8962
YOU MAY ALSO WANT TO COMPLETE FORM 1040NR IF:
a. 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)
b. You contributed money to a US or Canadian charity
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

31. 8843
Every Tax Non-resident fills out
this form, even dependents

32. 8843 Student Sample
SSN or ITIN otherwise write “None”

33. 8843 Student Sample
Number of days you were
in student status

34. 8843 Student Sample

35. 8843 Student Sample
Diversity Visa Lottery does
NOT count

36. Sign here if no tax return

37. No Income?
 If you had no US income in 2018 and no
Marketplace insurance in 2018 and you
are a non-resident you are DONE!
 Make a copy for your files and mail before
June 15, 2019
 If you are leaving the US you can find this
form in January next year at www.irs.gov
under form 8843!

38. Mailing Address
Internal Revenue Service Center
Austin, Texas
73301-0215

39. Marketplace Insurance?
 If you or your dependents bought
Marketplace insurance in 2018 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

40. Deductions and Exemptions to
Income
Very few for Non-residents (charity,
state and local taxes, student loan
interest)
Remember you will never get back
more than they took!

41. Income types students have:
 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 NOT
tuition or educational expenses to you on IRS
Form 1042-S (e.g., Athletic scholarships and
small departmental scholarships at UNM)

42. Income types students have:
 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

43. 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

44. Treaty Information

45. General Treaty Information
 Some countries have tax treaties with the
U.S. which may save you money on your
federal income tax. You can get the treaty
benefit even if you did not complete the
8233 in 2018
 Treaty benefits depend on country of last
tax residence, not citizenship
 Benefits are different for each country and
depend on your activity in the U.S. (e.g.,
student or scholar) and type of income

46. 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 on handout IS
Important: one handout for wages and
one for non-service scholarship

47. 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”)

48. Student Tax Treaty Summary
For WAGES
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
No limit

49. Student Tax Treaty Summary
For WAGES
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 2018 this is $12,000

50. Student Tax Treaty Summary
For WAGES
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

51. Student Tax Treaty Summary
For WAGES
* 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.

52. Student Tax Treaty Summary For 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)

53. Student Tax Treaty Summary
For NON-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)

54. Student Tax Treaty Summary
For NON-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

55. Student Tax Treaty Summary
For NON-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

56. Student Tax Treaty Summary
For NON-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

57. Filling out the Tax Returns

58. 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)
 Enter the basic information first and then see
if you get all your money back before
entering more detail
 If you don’t understand the question on the
software, please ask!
 Software is not ready yet!

59. Earnings Information
 If you have any questions about what is
on these forms 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)

60. 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)

61. 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 wages

62. 1040NREZ Student Sample
Use a US address unless you won’t be here through June

63. 1040NREZ Student Sample

64. 1040NREZ Student Sample

65. 1040NREZ Student Sample

66. 1040NREZ Student Sample

67. 1040NREZ Student Sample
This will be filled in by the software

68. Sample for student with treaty
$5,000

69. 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
2018 from your 2017 STATE taxes)
 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?

70. Other documents/questions
 What is the amount of state tax you paid in
2018 (on your W2s and 1042S)?
 What is the amount of federal tax you paid
in 2018 (on your W2s and 1042S)?
 What is the Employer ID number for
federal taxes

71. 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

72. Box 1 = Income Code/Type
16 = Non-service Scholarship 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

73. Other documents/questions
 Did you pay any student loan interest in
2018 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?

74. Amount to
be refunded
Amount Owed

76. We will enter Site ID#

77. Completing the process
 Copy 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

78. Mailing Address
 If 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

79. Getting help
Come to the volunteer hours:
 For students with dependents from
Canada, India, Mexico, or South Korea
you will need to apply for ITIN numbers if
you can get credits for them (only if US,
Canadian or Mexican)
 For students with income more than
$100,000 you need to go elsewhere

80. 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/perso
nal-income-tax-forms.aspx

81. 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 NM driver’s
License or State ID AND:
 Have filed before (you have to have an account)
 Are a student from India, 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)

82. NM State Tax
 If all your income was exempt by treaty
and was on a 1042S (not a W2) you do
need to file state forms
 If you had state taxes withheld and you
want the money back, you will need to file
state tax forms

83. 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)

84. Happy Tax Preparing!!!
Come to the Tax Volunteer Site!
"Volunteers in Tax Assistance" (VITA) Site
Volunteers will be available to help you:
 March 7, 8, 21, 22, 28, 29 and April 4, 5
1:00 – 4:00 pm
WHERE: Student Union Building (SUB), Lobo
Computer Lab, Lower Level
BRING: Immigration and all tax related
documents and SSN

85. Software Program
OR:
 https://trr.windstar.com/
 Access Code: JTLWGU2ZZV56
 2018 tax software is still not ready; should
be in a few days
 You should follow the instructions for
“New” or “Returning” users
 If you don’t remember your password, you
will need to reset it!

87. Software Program
 Read the page for instructions!!!
 Once you have completed the information,
you click on “Get Forms”
 You will be taken to an instruction page
that tells you what to mail with the forms
and where to mail them
 Click on the links to print all the forms
 If the forms appear blank, then you have
not opened them in Adobe Reader!!!!

88. Instructions

89. Software Program
 You must print out all forms, 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)