Employment Verification & Tax Issues
InterExchange has compiled the following information as a general resource. Tax laws are subject to change. InterExchange program staff are not tax advisers and cannot assume any responsibility for tax issues a camp might have with its international participants. We encourage all camps to contact the IRS or a tax adviser for assistance and more up-to-date information.
- Each participant is authorized to work legally under his or her J-1 Visa status.
- This visa allows the participant to work only between the dates listed in Section 3 of the participant’s DS-2019 Form.
Note: An InterExchange participant is only authorized to work at his or her assigned camp and is prohibited from working anywhere else during the program.
Documentation for Your Records
Camps must collect the following documents within three days of the participant’s arrival at camp. We suggest allocating some time during your staff orientation to organize this paperwork.
- Copy of the participant’s passport: Serves as proof of identity (cover page, I-94 card stapled into the applicant’s passport and J-1 Visa entry stamp).
- Copies of the participant’s DS-2019 Form: Evidence of legal entrance into the U.S. and dates of work eligibility.
- Completed I-9 Employment Eligibility Verification Form: Employee’s information and verification form.
The information collected will serve as verification of the participant’s identity and his or her eligibility to work while in the United States. Keep all records on file for at least three years or as recommended by the IRS and U.S. Department of Labor.
Social Security and Identification Numbers
In order for international J-1 staff to file tax returns at the end of the year, they should obtain a Social Security number. U.S. government regulations dictate that Social Security offices confirm each applicant’s legitimacy with USCIS (United States Citizenship and Immigration Services), which may delay processing. We ask that you allow your staff to apply as early as possible.
Your international staff are required to have Social Security numbers. Please assist them with transportation to the closest Social Security office during the first week of camp.
Taxes and Withholdings
Under IRS Code Section 3121(b)(19), all InterExchange participants are classified as nonresident aliens. All nonresident aliens are exempt from paying FICA (Social Security) taxes. They are also exempt from paying Medicare and FUTA (unemployment) taxes.
All employees (resident or nonresident) are required to complete Form W-4 and submit it to their employers. Procedures that went into effect on January 1, 2007, require nonresident alien employees to:
- Not claim exemption from withholding
- Request withholding as if they are single, regardless of the actual marital status
- Claim only one allowance (nonresident aliens from Canada, Mexico or Korea may claim more than one allowance)
- Write “Nonresident Alien” or “NRA” above the dotted line on line 6 of Form W-4
Participants may be required to pay income taxes, depending on where they work. Since all participants are required to file 1040NR (or 1040NR-EZ) with the IRS, camps must issue a Form W-2 to their camp staff in a timely manner. Form 1042-S should be issued to reflect wages exempt from tax under an income tax treaty.
For more detailed information, please refer to Publication 515: Withholding of Tax on Nonresident Aliens and Foreign Corporations on the IRS website.
Requesting Government Forms and Publications
InterExchange understands the complexity involved with handling the various tax codes and responsibilities. As such, we have provided the following information to assist in the search for accurate information. We suggest contacting a tax adviser for the most up-to-date information.
Internal Revenue Service
1.800.829.1040 (for individual tax questions) 1.800.829.4933 (for business tax questions) www.irs.gov
Social Security Administration
United States Citizenship and Immigration Services (USCIS)
U.S. Department of State
Continue to the next chapter, Insurance Coverage, or return to the Table of Contents.