International Tax Compliance Office
Fidel Center - Room 231 - Suite 233
Foreign Students: Resident or Non-Resident Aliens for Tax Purposes
Non Resident Aliens - Submit form 8843 to the Federal Government each year:
This is a "Statement for Exempt Individuals and Individuals With a Medical Condition" and must be submitted to the IRS each year (even if you received no income) if an individual is a Non-Resident alien for tax purposes and is present in the U.S. under F-1, F-2, J-1, or J-2 status.
This is not an income tax return. Form 8843 is an informational statement required by the U.S. Government for Nonresident Aliens holding certain visa types (including the spouses or dependents of Nonresident aliens). For students, the focus of the statement is the number of days they were present in the U.S. and the days that are exempt from counting in the substantial presence test (see Part 1 question 4).
International Students with Jobs:
At the time of receiving an hourly job offer, the Student will obtain a Student Work Authorization (SWA) form or a Graduate Student contract. The student will have their work eligibility verified by the Compliance Analyst in the E-Verify system as part of the I-9 process. (See the section below on the I-9 process)
Once you have your job offer, The first step you take is for the student to schedule a meeting with the Compliance Analyst. The Compliance Analyst will then send you a link to the GLACIER Tax Compliance software. You will need to fill out compliance forms online. When the form is filled out, make an appointment with the Compliance Analyst who will perform the substantial presence test, complete a W-4 form, and determine whether tax treaty benefits are allowed. Foreign students may either be a "Resident" for tax purposes or a "Non-Resident" for tax purposes. This tax classification is determined by the number of years in the US, and will determine your tax rate.
Exemptions from certain taxes for Students
All individuals who are Non-resident aliens for tax purposes and hold a F-1, J-1, M-1 or Q-1 visa are exempt from paying social security tax (also called FICA tax) and Medicare tax on their wages when you are engaged in activities that are allowed under your visa. These taxes are over 7% of your wages. The exemption is defined in section 3121 (b) (19) of the tax law. Employers often are not aware of this section of the tax law, and you should provide them with this information during the hiring process. If your summer employer, your OPT employer, or Tech's Payroll department withheld those taxes from your paycheck in error you should contact them and ask for a refund. If they do not refund the taxes, you should apply to the IRS for a refund. Complete IRS forms 843 and 8316 for your refund request and mail them to the same address you mailed your income tax return.
A step by step guide to the refund process is here: Step by step guide to request a refund
NRA Student - Scholarships/Grants/Fellowships:
The Federal Tax Compliance Analyst reviews grant and scholarship awards posted to the foreign student's account to determine whether a portion is taxable as income. The IRS guidelines on qualified and unqualified education expenses are applied to the student's account. The recipient will be notified if they have a tax liability, and if they are allowed a tax treaty a benefit to avoid taxation will be granted based on the student's country of tax residency and their eligibility. All income taxes owed are processed as a charge to the student's account.
Form I-9: Employment Eligibility Verification :
- New Mexico Tech will issue form I-9, Employment Eligibility Verification, to all graduate and undergraduate students with campus employment. They must have a completed form I-9 before their first day of work.
- NMT participates in E-Verify - a system that is operated by the Department of Homeland Security (DHS) and the Social Security Administration (SSA) to electronically verify the employment eligibility of newly hired employees.
- The student worker shall review the form instructions and determine which document(s) they will present to prove identity and work eligibility :
- Bring original versions of the document(s), and your signed work authorization, Grad student contract, or one time pay document to the Compliance Office in Fidel Center Room 231 - Suite 233.
Application for a Social Security card: SS-5 form
- A social security card is required for all employees. The social security number on the card is used in the payroll and income tax filing processes.
- If you do not yet have a social security card, you may still start work, and you will receive up to 3 paychecks. The Compliance Office will issue you a temporary number that is used in the payroll system until you receive a social security number.
- The federal government's Social Security Administration (SSA) issues the card after you present the original versions of your identity and work authorization documents, and a completed application. You may call them with questions: (800) 772-1213 their nearest location is in Albuquerque.
- Office hours and driving directions can be found on their web site: https://www.socialsecuritybranch.com/nm/albuquerque/albuquerque-social-security-office/500-lead-ave-sw-suite-100
Annual Income Tax Return Preparation
- The Tech payroll system withholds income tax from your paychecks, per government regulations
- Once a year you complete a report called your 'tax return' that reconciles the tax that you owe to the amount that was withheld from your paychecks. These tax returns are required for the State of New Mexico and the US federal government (IRS). The due date is April 15th.
- All International student who are in Non Resident Alien status as determined by the Compliance Analyst are Required to file a 1040NR or 1040NR-EZ tax form. All other tax forms (1040 or 1040EZ) are for U.S. Citizens, Residents and Green card holders only and will take you out of Compliance with the Internal Revenue Service.
- The Compliance Analyst alongside of the International Students Office will offer a special International tax software license usage that will assist all Non-resident Alien students with preparation of your Federal tax return
- A free tax return preparation service called Tax Help New Mexico will prepare any student's tax returns if they are a US citizen or a Resident alien for tax purposes. See their web site for locations and operating hours:http://www.cnm.edu/depts/taxhelp
A student who is participating in a REU program (research experience for undergraduates) is given funding to cover tuition, living expenses, travel, and a personal stipend. The funds are posted to the student account, and the transaction is classified as a scholarship since no services are owed to the university. The tax obligation is the same as other scholarships: a) citizens and resident aliens for tax purposes receive a 1098-T form at year end and calculate the taxable amount on their tax return, b) Non-resident aliens have 14% income tax withheld from the nonqualified portion of payment in their student account and receive a 1042-S form at year end.
More detail is provided in the restricted funds document named “Budgeting, Pricing and Charging Sponsored Agreements”.
1098T Compliance- Reporting Tuition Payments
The business office sends the 1098-T tax form to US and Resident Alien students at year end that documents the tuition and qualified fee payments, and the scholarships funds that were posted to the student account.
Students who are classified as Non Resident Alien for tax purposes DO NOT qualify to recieve this document and will not be issued a 1098-T statement.
Students who are classified as Resident Aliens for tax purposes must request the 1098-T at the Compliance Office before January 25th of the New Year.
The procedures are documented here: 1098-T Procedures
You may contact the Compliance Office at - 575-835-5122 - Fax-575-835-6177