Tax Issues for International Students and U.S. Students Abroad

As if traveling to a foreign country to study isn't challenging enough-you've got to learn a different language, manage travel hassles, etc. - did you know that you have to deal with tax issues, too? If you're an international student studying in the U.S., or a U.S. citizen studying abroad, we've broken down the tax rules that apply to you.

International Students

Because you're a student, you are classified by the IRS as a nonresident alien unless you have taken actions to become a permanent resident.  You MUST file a tax return unless you have not earned any income in the calendar year.  To file your taxes, you will need the following.

• Form 8843 is an IRS supplemental form that must be filed by all nonresident students in order to exclude their days of presence in United States from the Substantial Presence Test, which is what determines if you are eligible to become a resident alien.
• If you were a nonresident for tax purposes who had any U.S. source income during the previous tax year, you must file your tax return on IRS Form 1040NR-EZ or Form 1040NR.
• International students are not subject to Social Security and Medicare taxes. If any of these taxes were withheld in error, you must first ask your employer for a refund. If you are unable to obtain a refund from your employer, you may file Form 843 - Application for Refund and Abatement.
• The IRS issues Individual Tax Identification Numbers to individuals who are required to have a U.S. tax payer identification number for U.S. tax purposes but don't have - and are not eligible - to obtain a Social Security Number.

It is important to file US income tax returns annually. Failing to file tax forms can affect your ability to re-enter the U.S. or the success of an application to change your visa status.

U.S. Students in an International Study Abroad Program

Usually, much like being an international student here in the U.S., you will have to follow the host country's tax rules if you are earning money while studying abroad. You will also be required to file a tax return in the U.S., and you can use the foreign taxes paid as a deduction on your return, making sure you aren't paying double taxes.

If you will be out of the country when it comes time to file your U.S. tax return, you can always file at an American embassy or online.

If you do not have a job while studying abroad, you won't have to file anything for your time overseas, but you can use your travel abroad as a tax deduction for educational expenses. 

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