In most cases, foreign nationals who are temporarily in the USA are obligated to file US federal and state taxes. Foreign nationals who are in the USA to conduct research that receive fellowship income, in the form of a stipend or grant, are considered subject to federal and state taxes.  If your income is subject to U.S. income taxes, most likely you will be required to file form 1040NR. If your income is solely from outside sources, not from a U.S. institution, you do not need to file a U.S. Tax Return.

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Declarers of 1040NR are normally required to file US income taxes as “Individual Tax Payers”. This means that although you might be in the US with family members, you can only claim yourself in the tax return (exceptions are granted to citizens of some countries, such as Canada and Mexico). Also, the types and kinds of deductions and credits for which you could qualify are limited and more restrictive than those available to U.S. nationals or residents.

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Most J-1’s are exempt from “Days Present Test” to determine if you should file as a U.S. resident. For 2 years, the J-1’s will file as Non-Resident. After the first two years, you begin to file as U.S. resident for tax purposes.  

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Declarers of form 1040NR, under J-1 visa, also need to file form 8453. For this form, you will need to present passport, DS Form, documents from private employer, school or research institution which shows the nature of work being performed as well as your official title.  Also, the name of your supervisor or PI, lab address and phone are required.

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For 1040NR filers, it is required to include in the return the dates of travel to and from the USA during the calendar year. Please provide date of arrival in the USA, as well as the dates of travel during the year. It is also required to declare the types of U.S. visas you have held previously.

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Some foreign declarers of 1040NR will receive form 1042-S (NIH fellows) or a letter from the paying institution (FDA fellows) which states your income for the year. This is your proof of income which must be filed along with your tax return; plus any other type of income such as interests, dividends, bonuses, state tax refunds, etc…

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Should you have made estimated tax payments, (federal and/or state), bring copies of canceled checks or your own record showing any estimated taxes you might have paid during the year.

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In some cases, and for certain countries which hold a tax treaty with the USA, you may qualify for federal exemption of income taxes. Based on your country of origin or residence, we could determine if your situation qualifies you for this exemption. The exemption from income taxes usually applies only to federal taxes, not to state taxes.

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Be aware that normally, the NIH nor the FDA withhold state taxes, (Maryland, Virginia, nor D.C.). You must arrange to pay estimated taxes in order to avoid penalties or to avoid owing a large amount at time of tax declaration. State estimated taxes should be paid as soon as you are aware of your yearly income.

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Please call us or send an e-mail for an appointment or brief consultation.