Tax Residency Status (Students)

Resident Alien or Nonresident Alien

For tax purposes, the IRS defines an "alien" as any non-U.S. citizen. There are three different types of aliens: resident alien, nonresident alien, and dual-status alien (non-resident for part of the year and resident the other part). Your tax residency determines how you are taxed and which tax forms you need to complete.

 

Resident Alien

A resident alien is subject to the same U.S. taxation withholding and reporting requirements as a U.S. citizen. For federal tax purposes, resident aliens are subject to tax on worldwide income, and tax treaty benefits may or may not apply. Form 1040 is the federal individual income tax return applicable to U.S. citizens and resident aliens. 

Your residency status for tax purposes is separate from your designation for immigration purposes:

• For immigration purposes, a “nonresident alien” is a foreign national who is in the U.S. on a non-immigration visa.
• For U.S. tax purposes, a “nonresident alien” is a foreign national visa holder with certain U.S. tax filing requirements and U.S. tax withholding requirements.

You are a resident alien of the United States for tax purposes if you meet either of these tests for the calendar year (January 1 through December 31):

• The green card test (Lawful Permanent Resident)
• The substantial presence test for the calendar year

Even if you meet the substantial presence test, you can still be treated as a nonresident alien if you meet the closer connection requirements.

 

Exempt Individual

For the substantial presence test, do not count days for which you are an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following category:

• A student temporarily present in the US under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa. This exemption generally applies for the individual’s first five calendar years in the U.S.

An exempt individual for purposes of the substantial presence test is considered a nonresident alien.

 

Nonresident Alien

You are a nonresident alien if you are an alien (non-U.S. citizen) and do not meet either the green card test or substantial presence test. A nonresident alien is subject to tax on income from U.S. sources. Nonresident aliens may be required to file the nonresident alien individual income tax return (Form 1040-NR) and/or Form 8843.

Form 8843

Even if you did not receive any U.S. source income or a U.S. fellowship, you may be required to file Form 8843 (Statement for Exempt Individuals and Individuals with a Medical Condition), if you exclude days of presence in the U.S. for purposes of the substantial presence test because you were an exempt individual or were unable to leave the U.S. because of a medical condition.

 

Dual-Status Alien

If you were both a nonresident alien and resident alien during the same tax year, please refer to the FAQ for more information on dual-status reporting.

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MIT HR/Payroll Resources and Guidance

MIT relies on the Sprintax Tax Determination System (TDS) to help you, as a foreign national, determine your U.S. tax status (non-resident alien vs. resident alien) and whether you are tax exempt because of your home country’s tax treaty with the United States.

Please note that you will be asked to enter a Social Security number into Sprintax TDS. If you don’t have a Social Security number, MIT employees and affiliates can reference the ISchO site and students the ISO site to learn more about applying for one. You will need to complete your Sprintax TDS profile even if you do not have a Social Security Number (SSN).

In order to determine your tax status, you will need to provide the following documentation:

• Copies of your DS-2019 or I-20, I-94 and Visa Sticker/Stamp (in Passport)

The Sprintax TDS system offers secure and easy electronic document transfer, so there is no need to print and mail or email password protected documents. You will be able to sign them electronically with Adobe Acrobat DC Pro (available for free to the MIT community via the IS&T website https://ist-mit-edu.ezproxy.canberra.edu.au/adobe/cc). Information provided to Sprintax TDS is stored securely and will only be used by MIT for purposes of tax withholding and reporting.

If your status switches from fellow to employee or vice versa, you must file a new tax treaty exemption claim.

VPF HR/Payroll Assistance

A VPF HR/Payroll foreign national tax specialist holds office hours at the Atlas Service Center in E17-106 on Tuesdays and Thursdays from 9 am through 4:30 pm to help international students, faculty, researchers, and staff determine their U.S. tax status.

Log in to Atlas—MIT’s self-service and administrative systems hub—to book these appointments online. See the Atlas Full Catalog menu on the left. Choose Atlas Service Center In-person Services, then Tax Treaty Guidance, to book appointments at the Atlas Service Center. 

 

Change in Tax Status

If you are an MIT affiliate or MIT employee and you become a resident alien for federal tax purposes, you should notify VPF HR/Payroll (nratax-payroll@mit.edu) and complete a new Form W-4 through Atlas if necessary. You are responsible for updating your status, as it is not MIT’s responsibility to report these changes. If you were both a nonresident alien and resident alien during the same tax year, please refer to the FAQ for more information on dual-status reporting.

If your status changes from a nonresident alien to a resident alien, your tax compliance obligations will change. The IRS website provides additional information regarding taxation of U.S. resident aliens.

 

Related Links:

• Types of Tax Forms Filed with the IRS
• Determining Alien Tax Status
• Foreign Persons