If you will be paid at your internship/training program, U.S. law requires that you pay federal, state, and local taxes. As an income-earning individual, you will be taxed on income from your salary or stipend.
Your employer will submit the amount withheld from each paycheck directly to the federal government. Deductions for state and local taxes will vary. Some states do not have a personal income tax; others may tax income as much as 8%. Similarly, local taxes vary, but they are typically less than state and federal taxes.
If no taxes are withheld from your paycheck, please contact InterExchange.
|You Do Pay:||You Do Not Pay:|
|Federal Income Tax||Medicare Tax (FICA)|
|Local or City Income||Social Security Tax (S.S.)|
|State Income Tax||Federal Unemployment Tax (FUTA)|
You do not have to pay Social Security or Medicare Tax. You also will not pay federal unemployment taxes, but some states may deduct state unemployment taxes, which you are required to pay.
In order to make sure that you are paying the correct taxes, check your first pay stub:
How to understand your Pay Stub
Gross Pay: Total amount earned in the pay period before any tax deductions.
Withholdings: Amount of money the Federal, State and local governments take out of your paycheck
Net Pay: Total amount of earnings you will receive after taxes have been taken out.
YTD or Year To Date: The total amount of earnings and withholdings since January 1st of the current calendar year.
Important: If you see deductions that say FICA, FUTA, S.S., or Social Security, please notify your employer promptly. If your employer is unable to issue a refund, contact the Internal Revenue Service - the U.S. government agency that collects taxes - and request IRS Form 843, Claim for Refund and Request for Abatement. You will need to submit the completed IRS forms to the Internal Revenue Service Center. Please note: Some states may deduct state unemployment taxes, which you are required to pay.
When you arrive at your host employer, you must complete an I-9 Employment Eligibility Verification Form, which informs the federal government that you are permitted to work in the United States. You will need to show your passport, a printout of your I-94 Arrival/Departure Record, J-1 Visa, and DS-2019 Form to your employer when completing this form. You will complete Section 1, and your host employer will complete Section 2. You should fill out Section 1 using your host employer’s address.
Your employer will give you a W-4 Form upon arrival, and it is your responsibility to complete and submit this to your employer. Based on the information you provide, your employer will calculate the amount of federal, state, and local taxes that will be withheld from your paycheck.
How to How to Fill Out Your W-4 Form
Your employer may tell you to follow the instructions printed on the form, but this is not correct. The instructions on the W-4 Form are for U.S. residents only. As a non-resident, please follow the instructions below:
- Do not complete the Personal Allowances Worksheet; this does not apply to exchange visitors.
- Home address: Indicate your permanent U.S. mailing address.
- Box 2: Enter your Social Security number if you already have it. If you do not have your number yet, inform human resources at your host company that you applied for a number and provide a copy of your receipt.
- Box 3: Mark or check "Single," even if you are married.
- Box 4: Leave blank.
- Box 5: Write “1.” (If you are a resident of Canada, Mexico, Japan, or South Korea, or India, please visit the IRS website for further instructions.)
- Box 6: Write NRA for “Non-Resident Alien.”
- Box 7: Leave blank.
- Sign and date your form.
- Box 8-10: Leave blank.
All individuals who have earned income in the U.S. are required to file a tax return for the year during which they worked.
As an exchange visitor on a J-1 Visa, you are considered a non-resident alien for tax purposes. Depending on the length of your internship and your salary, you may be eligible for a refund of much of the taxes you paid. Your tax return should show your earnings for the previous year, the taxes you paid, and the total amount of taxes owed or refunded.
The Internal Revenue Service (IRS) is the U.S. government agency that collects taxes. You can get forms, instructions, and information from their website.
Please note: InterExchange staff are not tax experts and do not provide tax advisory services. The information provided here is merely a reminder to participants about basic information needed to file taxes and other resources available to them.
Step 1: Get Your W-2 Form
The W-2 Form summarizes your earnings and the taxes withheld from your earnings during the previous year.
Important: Before you end your program, please give your employer your home address or a self-addressed envelope so that they can mail your W-2 Form to you. If you do not do so, your employer will not be able to send you the necessary forms to file for your tax return.
Your employer must send you a W-2 Form between January 1st and January 31st, documenting your wages and deductions from the prior calendar year. You will then need to file a tax return by April 15th. Typically, you will receive a refund of some of the taxes you paid during your program.
Note: Participants whose program dates span multiple years will receive multiple W-2 Forms and will need to file taxes for each year in which wages were earned. For example, if your internship/training program lasts from September 2019 to April 2020, you will receive a W-2 in February 2020 for wages earned in 2019, then another W-2 will be sent to you in your home country in February 2021 for wages earned in 2020. You will need to file taxes for each calendar year you interned or trained in the United States.
Step 2: Complete 1040NR-EZ
2019 Tax Year Filing Dates: Your host employer must legally issue your W-2 form by January 31, 2020 (if they are mailing it, your form must be mailed by this day, but you may receive it later). You will need this form to file your tax return.
If you do not receive your W-2 form from your employer by mid-February, contact your employer immediately. Your tax return must be filed by April 15, 2020. (Hint: The sooner you file, the sooner you can receive your tax refund!)
Upon receiving your W-2 Form, you will fill out a 1040NR-EZ (Non-Resident Aliens with No Dependents) tax form. You can obtain this form at the U.S. Embassy in your home country or on the IRS website. Please look at a sample 1040NR-EZ Form.
When you begin the 1040NR-EZ Form, make sure to read the instructions pamphlet. To avoid any mistakes, follow the instructions carefully.
If you overpaid the U.S. government, they will issue you a check. However, if you did not pay enough taxes, you must pay the government the amount you still owe.
The paperwork for your 2019 taxes must be postmarked and mailed on or before April 15, 2020.
Once you have completed the form, you may send it to the IRS branch in the state in which you lived.
Important: There are separate forms for state and local taxes, but they vary by state. You must request these state and local forms from your employer or use the link provided. They are not available at the embassy. The IRS website has more information on filing for taxes in your host state.
Note: The 2018 Tax Cuts and Jobs Act (TCJA) includes changes to the federal income tax law that may affect some exchange visitors. The new federal income tax law, which will be implemented in 2019, eliminates the personal exemption of $4,050 when filing Form 1040-NR for nonresident aliens. This may affect exchange visitors’ refund of wages withheld for federal income tax and may consequently increase the cost of Exchange Visitor Program participation.
Tax status: For tax purposes J-1 Visa holders are considered non-resident aliens. Please review the IRS' non-resident alien filing requirements.
Tax Treaties: Some countries have agreements with the U.S. government that affect the tax rate that their nationals must pay. If your country has a tax treaty with the U.S., you should indicate this when you file your taxes to get the adjusted tax rate.
J-2 Taxes: J-2 visa holders must also file taxes if they are over 18 or have earned money while in the United States. If they have not earned any money, but are over 18, they should file Form 8843.
Step 3: Mail in Your Forms
Please submit your 1040NR-EZ by mail. Unfortunately, filing your tax returns electronically is not an option, as nonresident aliens must mail their signed forms to the IRS.
Before mailing in your tax return:
Keep a copy of all your documents, including the tax return and check.
If you are enclosing a payment, mail your payment and the Form 1040NR-EZ to:
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
If you are not enclosing a payment mail your forms to:
Department of Treasury
Internal Revenue Service
Austin, TX 73301-0215
If you are owed a refund, you will be given a paper check issued by the U.S. Government. Keep in mind that you may not be able to cash this check in your home country.
You may have the option to receive a refund via direct deposit, but this needs to be done before the refund is issued. In order to be eligible for direct deposit, you will need a U.S. bank account.
Speak with your U.S. bank and your home country bank to determine what options you have.
InterExchange is not a licensed tax preparer; if you have specific questions, we advise contacting the IRS directly. You may also contact a tax provider who could assist you with your individual situation, typically for a flat fee or a percentage of your tax refund. Make sure you tell them beforehand that you are a J-1 Intern/Trainee (non-resident alien) and be mindful of any fees they may charge. You are also encouraged to use the following resources as you plan to file your taxes:
You are also encouraged to use the following resources as you plan to file your taxes:
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