Social Security Numbers & Taxes
Social Security Numbers & Taxes
Social Security Number
All paid interns and trainees must apply for a Social Security Number. If you’re not providing payment, participants aren’t required to have one, but we recommend applying since they may need it for banking, housing, or getting a driver’s license.
Important: Participants can begin training and receiving pay before getting their Social Security Number, as long as they provide you with their application receipt letter. The card typically takes up to 6 weeks to arrive. Learn more from the SSA: Employer responsibilities when hiring foreign workers
For application help: Direct participants to our SSN application guide and review our 8 Quick Ways You Can Help Participants Get Their Social Security Number to avoid delays.
Questions: Call the Social Security Administration at 1-800-772-1213 or visit www.ssa.gov.
Pay & Tax withholdings
Paid participants should be paid on the same schedule as full-time employees and paid via a W-2 (not as independent contractors). J-1 participants are in the “non-resident alien” tax category and are exempt from certain taxes.
Please review the table below:
| Taxes to Pay: | Taxes to NOT Pay: |
|---|---|
| Federal Income Tax | Social Security Tax |
| State Income Tax | Medicare Tax (FICA) |
| Low Income Tax | Federal Unemployment Tax (FUTA) |
Under IRS Code Section 31.21(B)(19), all J-1 participants are exempt from FICA and FUTA taxes during their first two calendar years in the U.S. Since all intern/trainee programs are 18 months or fewer, all participants qualify for this exemption. Please consult a tax professional to see if your participants are also exempt from state unemployment taxes in your state.
If FICA/FUTA has been mistakenly withheld, adjust future pay periods and issue a refund.
Note: For specific tax and withholding questions, please contact the IRS or a tax professional, as InterExchange is not licensed to provide individualized tax advice.
Onboarding Forms
I-9 Employment Eligibility Verification
Participants must complete Form I-9 when they arrive, showing:
- Passport with J-1 Visa
- I-94 Arrival/Departure Record
- DS-2019 Form
Participants will complete Section 1, using your company address, and you will complete Section 2.
E-Verify users: If your participant hasn’t received their SSN yet, note this on Form I-9 and set it aside. They can continue to train. Create the E-Verify case once they receive their SSN. More information can be found on the E-Verify website.
W-4 Employee Withholding Certificate
Important: Participants should NOT follow the standard W-4 instructions, which are for U.S. residents. Instead, use these steps:
How J-1 Participants Complete the W-4:
- Step 1(a): Legal name and permanent U.S. address
- Step 1(b): SSN (or note “applied for” if pending)
- Step 1(c): Check “Single or Married filing separately” (even if married)
- Steps 2 & 3: Leave blank
- Step 4 (c): Write “nonresident alien” or “NRA” below Step 4(c)
- Step 5: Sign and date
For participants without SSN yet:
- Paper filers: Enter “Applied For” in SSN box (Reference: IRS Instructions for Forms W-2/W-3)
- Electronic filers: Enter all zeros in SSN field (Reference: Specifications for Filing Forms W-2 and W-2c Electronically)
Remember to instruct participants to tell you the number and the exact name printed on their Social Security card when they receive it.
Tax Filing Requirements
All paid participants must file U.S. tax returns for any calendar year they worked, even if they’ve returned home. This is essential to remind participants, especially for programs spanning multiple tax years.
W-2 Forms
You must provide W-2s between January 1-31 documenting prior year wages and deductions. If participants return home before W-2 season, have them leave a self-addressed envelope or ensure electronic W-2 access.
Do not send W-2s to InterExchange’s office—we cannot guarantee delivery.
Form 1040NR Filing
J-1 participants must file Form 1040NR (Non-Resident Aliens), not standard Form 1040. They cannot use e-file options like TurboTax, which are for U.S. residents only. Paper forms must be mailed to the IRS address listed in 1040NR instructions. Please direct participants to this comprehensive tax guide for tax filing instructions.
Note: For specific tax questions, participants should contact the IRS or a tax professional, as InterExchange is not licensed to provide individualized tax advice.
Common Filing Errors
The most common mistake is filing the wrong form. If participants used TurboTax or filed Form 1040, they need to file Form 1040X (amended return) along with a corrected 1040NR.
Questions: Contact the IRS at 1-800-829-4933 or visit www.irs.gov
