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Foreign Students and Scholars

Aliens temporarily present in the United States as students, trainees, scholars, teachers, researchers, exchange visitors, and cultural exchange visitors are subject to special rules with respect to the taxation of their income.

There is no minimum dollar amount of income, which triggers a filing requirement for a nonresident alien, including foreign students or foreign scholars. The dollar limit thresholds which trigger a filing requirement for a U.S. citizen or a resident alien do not apply to nonresident aliens. However, Notice 2005-77 provides that a nonresident alien whose only U.S. source income is wages is not required to file a U.S. federal income tax return unless his U.S. source wages exceed the personal exemption amount. Please refer to Publication 501, Exemptions, Standard Deduction, and Filing Information, to determine the personal exemption amount.

Who Must File

Filing IS required by nonresident alien students and scholars who have:

1) A taxable scholarship or fellowship, as described in Chapter 1 of Publication 970, Tax Benefits for Education;
2) Income partially or totally exempt from tax under the terms of a tax treaty; and/or
3) Any other income, which is taxable under the Internal Revenue Code.

Filing IS NOT required by nonresident alien students and scholars who have income ONLY from:

1) Foreign sources;
2) Interest Income from:
 

  • a. U.S. bank
    b. a U.S. savings & loan institution
    c. a U.S. credit union
    d. a U.S. insurance company
     

3) An investment, which generates Portfolio Interest (Described in Chapter 3 "Exclusions From Gross Income" - "Interest Income" – "Portfolio interest" of Publication 519, U.S. Tax Guide for Aliens);
4) A scholarship or fellowship, which is entirely a Tax Free Scholarship or Fellowship as described in Chapter 1 of Publication 970, Tax Benefits for Education; and/or
5) Any other income, which is nontaxable under the Internal Revenue Code. However, income, which is not taxable because of an income tax treaty must be reported on a U.S. income tax return even though no income tax is due on the U.S. income tax return.

Determine Residency Status

Taxpayer Identification Numbers

Employers’ Withholding on Foreign Students and Scholars

Income of Foreign Students and Scholars

Deductions for Foreign Student and Scholars

Other References

Page Last Reviewed or Updated: 03-Jun-2014