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. You can also check-out the special instructions for nonresident aliens issued by the IRS online.
- Do not complete the Personal Allowances Worksheet; this does not apply to exchange visitors.
- Step 1(a): Indicate your legal name and permanent U.S. mailing address.
- Step 1(b): 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.
- Step 1(c): Mark or check “Single or Married filing separately,” even if you are married.
- Steps 2 & 3: Leave blank.
- Step 4: Write “nonresident alien” or “NRA” in the space below Step 4(c).
- Step 5: Sign and date your form.
As an exchange visitor on a J-1 Visa, you are considered a non-resident alien for tax purposes. All J-1 participants who receive payment during their internship or training program have a tax filing requirement and will need to file at least one form with the IRS during tax season.
The Internal Revenue Service (IRS) is the U.S. government agency that collects taxes. You can get forms, instructions, and information from their website.
Depending on the length of your internship and your compensation, you may be eligible for a refund of some of the taxes you paid. Your tax return will show your earnings for the previous year, the taxes you paid, and the total amount of taxes owed or refunded.
NOTE: InterExchange staff are not licensed tax experts and therefore cannot 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: Complete Form 8843
All non-resident aliens must file Form 8843. This isn’t a tax return but rather lets the IRS know how many days you were outside of the U.S. during the calendar year. This helps them determine your tax responsibility in the U.S.
You must complete and submit Form 8843 regardless of if you were paid or unpaid during your internship. J-2 dependent visa holders also need to submit this form.
If you were unpaid during your internship, mail a paper copy of your completed Form 8843 by May 17 to:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
If you were paid by your U.S. host employer, you will attach and mail Form 8843 along with your tax return to the appropriate IRS location. Follow the steps below for completing your tax return.
Step 2: Get Your W-2 Form
The W-2 Form summarizes your earnings and the taxes withheld from your earnings during the previous year.
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 (if they are mailing it, your form must be mailed by January 31st, but you may receive it later).
If you do not receive your W-2 form from your employer by mid-February, contact your employer immediately.
IMPORTANT: Before you leave the U.S., 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.
NOTE: Participants whose program dates span multiple calendar 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 2020 to April 2021, you will receive a W-2 in January 2021 for wages earned in 2020, then another W-2 will be sent to you in your home country in January 2022 for wages earned in 2021.
Step 3: Complete Form 1040NR
2020 Tax Year Filing Dates: Your tax return must be filed by May 17, 2021. Hint: The sooner you file, the sooner you can receive your tax refund! The paperwork for your 2020 taxes must be postmarked and mailed on or before May 17, 2021.
How to File: There are limited e-file options for non-resident aliens. Unless you pay to e-file with a nonresident tax preparer, you must complete a paper copy of the form 1040-NR and mail it to the proper IRS branch. You may not use common tax preparation software such as TurboTax, which only supports Form 1040 and is meant for U.S. residents only. If you do use online software like TurboTax, you will incorrectly file as a U.S. resident, and doing so may cause the IRS to suspect you of tax fraud (even if this was unintentional).
Filing Instructions: Upon receiving your W-2 Form, you will fill out a 1040-NR (Non-Resident Alien) tax form. You also need to fill out the accompanying document, Schedule OI. When you begin the 1040-NR Form and Schedule OI, make sure to read the instructions pamphlet and follow the instructions carefully. You will need the instructions for form 1040 for details on how to complete each line, but should refer back to the instructions for form 1040-NR for any possible exceptions. Remember: Make sure you complete form 1040-NR, which is specifically for non-resident aliens, and not form 1040, which is for U.S. citizens and residents.
If you overpaid the U.S. government, they will issue you a refund. However, if you did not pay enough taxes, you must pay the government the amount you still owe.
State Taxes: There are separate forms for state and local taxes, but they vary by state. Visit your host state’s department of revenue website for state tax forms and instructions. The IRS website also has more information on filing for taxes in your host state.
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.
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 was 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.
Step 4: Mail in Your Forms
Once complete, you must mail physical copies of your 1040NR to the IRS. Unfortunately, there are limited e-file options for nonresident aliens and filing your tax returns electronically is typically not an option. Don’t forget to include Schedule OI and Form 8843 with your return.
Make copies of all forms and checks prior to mailing them! We also recommend using a registered mail service with tracking options to ship your documents.
If you are enclosing a payment, mail your payment and the Form 1040NR 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 have the option of including your U.S. bank details to receive your payment via direct deposit or you can indicate that you’d like a paper check shipped to an address outside of the U.S.
Receiving the funds via direct deposit is the quicker option but keep in mind that the IRS will not transfer funds to an overseas bank account. You may also not be able to cash a paper check in your home country. It may be in your best interest to leave your U.S. bank account open until after you’ve received your tax refund. Speak with your U.S. bank and your home country bank to determine which option works best for you.
When preparing your tax documents, be cautious of individuals or companies offering to file your tax returns for you. Tax fraud and scams are not uncommon. Be on the lookout for warning signs of “ghost preparers,” those who file returns but refuse to sign the document as the preparer. Review information on the IRS website about other common tax scams and how to report them.
InterExchange is not a licensed tax preparer; if you have specific questions, we recommend 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:
If you made an error on a previously filed tax return, you’ll need to file an amended tax return, or Form 1040-X.
The most common error J-1 participants make is filing the wrong tax form. If you filed with TurboTax, for example, you probably filed Form 1040, which is for U.S. citizens and residents, rather than Form 1040-NR, which is for non-resident aliens like J-1 participants. You’ll need to file Form 1040-X along with a new 1040-NR to correct your return.
Once complete, mail your corrected forms to:
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
Don’t forget to amend your state returns as well. Visit the government website for the state you filed in to get more information on how to amend your return.
When is the tax season?
Each U.S. tax season begins on January 1 and lasts until taxes are due on May 17. This is the time period during which everyone must file taxes on the income earned during the previous calendar year. For example, 2020 taxes will be due to the IRS on May 17, 2021.
What is my tax status?
For tax purposes, J-1 Visa holders are considered non-resident aliens. Please review the IRS’ non-resident alien filing requirements.
I was not paid during my internship. Do I need to file a tax return?
You don’t need to file a tax return, but you will need to file Form 8843 with the IRS by the tax deadline.
Can I use TurboTax or other online tax preparation software to file my taxes?
Unfortunately, no. Unless you e-file with a specific nonresident tax preparer, you must mail paper copies of your tax documents to the IRS. TurboTax does not support non-resident tax forms, and filing as a U.S. resident with online tax software may cause the IRS to suspect you of tax fraud.
What is a ghost preparer?
An individual or company who prepares and submits your taxes but refuses to sign as the preparer. Be on the lookout for fraud such as this by reviewing information on ghost preparers and other scams on the IRS website.
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