Income Tax Basics - Global Engagement (2024)

GLACIER Nonresident Alien Tax Compliance (GLACIER) is a system that allows Texas A&M University to collect information and make decisions regarding how much you may be required to pay in federal income taxes if you receive any taxable income from the University. You do NOT file your tax return through GLACIER. If you receive taxable income from Texas A&M University, the information you input into GLACIER determines how much of your income should be withheld for tax payment purposes. For assistance with how to enter your information into GLACIER Nonresident Alien Tax Compliance (https://www.online-tax.net/glogin.asp), please ask your employing department's payroll office or visithttps://uas.tamu.edu/tax/instructions.html. ISSS does not have access to this system and therefore we are not the best resource for advising on how to use it.

All international students and scholars receiving taxable income from Texas A&M University will receive an email from[email protected] explaining that they are required to create and maintain an account in GLACIER. If you are receiving taxable income from multiple units at Texas A&M University, you may even be required to set up multiple GLACIER accounts. Taxable income can be from a variety of sources, such as employment, fellowships, grants, scholarships, etc. Prizes, awards, and payment for participating in research can all be considered taxable income as well and will require you to create a GLACIER account. Having taxable income does not necessarily mean you are employed by Texas A&M University. If you are emailed about creating an account in GLACIER, you should do so as soon as possible. It is best to create the GLACIER account and submit the required documents even if you do not yet have an SSN or ITIN.

In GLACIER, you will be instructed to enter either your SSN or your ITIN. If you have both, you should enter your SSN. The ITIN is no longer valid once an individual receives an SSN. After you enter your SSN or ITIN into GLACIER, the University will be able to apply any applicable tax treaties and exemptions to your taxable income. This means you should be taxed at the correct rate by the University. Each individual’s tax scenario is unique. It is not a guarantee that you will be eligible for any tax treaties or exemptions, but if you are eligible, the University must have an SSN or ITIN in order to apply them.

• F-1 students can only obtain a Social Security Number (SSN) if they have employment. F-1 students must have either an offer of on-campus employment or authorization to work off-campus before even applying for an SSN. Without employment, F-1 students cannot obtain an SSN.
• F-1 students can only obtain an Individual Taxpayer Identification Number (ITIN) if they do not have, and are not eligible to obtain, an SSN and they need a tax processing number issued by the U.S. government for federal tax withholding and filing purposes. ITINs do not serve any purpose other than federal tax reporting.
• J-1 students can obtain a Social Security Number (SSN) even if they do not have employment. You can email [email protected] to request an SSN endorsem*nt letter if you need an SSN but do not have a job offer.
• J-1 scholars and students interns should email [email protected] if you have questions about obtaining a Social Security Number (SSN).

When setting up your GLACIER account, if you do not have an SSN or an ITIN,you will be asked to select from the following options. Click the SSN and ITIN links above for further information about each and how to apply if you need one.

• I do NOT have a U.S.-issued SSN or ITIN; I would like to apply for an SSN
  • If this option is selected, the GLACIER process will be on hold until you applyfor, receive, and then enter your SSN into GLACIER.
• I have applied for an SSN, and I have not yet received the number
  • If this option is selected, the GLACIER process will be on hold until you receiveand then enter your SSN into GLACIER.
• I do NOT have a U.S.-Issued SSN or ITIN; I would like to apply for an ITIN
  • If this option is selected, the GLACIER process will be on hold until you applyfor, receive, and then enter your ITIN into GLACIER.
• I have applied for an ITIN, and I have not yet received the number
  • If this option is selected, the GLACIER process will be on hold until receiveand then enter your ITIN into GLACIER.

Until your SSN or ITIN is reported in GLACIER, your income will be taxed at 14%. No tax treaties or exemptions can be granted without the SSN or ITIN, so the University is required to apply the highest possible tax rate. This 14% tax withholding will either be deducted from the income that is distributed to you and/or charged to a student’s tuition and fee bill through theinternational withholding tax.

The GLACIER system will ask you to enter your SSN or ITIN within 10 days after the GLACIER account is created. However, the University is aware that it may take much longer than 10 days to receive an SSN or ITIN. You should report your number in GLACIER as soon as you receive it so the University can begin granting any applicable tax treaties and exemptions and you can be charged the proper amount of tax withholding. If the SSN or ITIN is entered into GLACIER on or prior to mid-December, and it is determined that you should have been charged at a rate lower than 14%, it may be possible for the University to credit you. Alternatively, you could receive a refund of unnecessary tax withholding when you file their tax return with the Internal Revenue Service (IRS) in the spring. You will need to have an SSN or ITIN to file the tax return and be eligible to receive a refund from the IRS. After you have an SSN or ITIN entered in GLACIER, the University should be able to calculate your proper tax withholding for all future tax years.

Students and scholars receiving taxable income because they are employed by Texas A&M University will also be required to maintain an account inWorkday. You will be asked to enter your SSN into Workday once you have it. There is no specific deadline for entering the SSN into Workday, but it should be entered as soon as you receive it.

U.S. tax law divides people into residents and nonresidents for tax purposes. Residency for tax purposes is determined by the Substantial Presence Test – a complicated calculation that considers how long you have been in the U.S. and in what status. Sprintax will calculate the Substantial Presence Test for you. Residents for tax purposes follow the same rules as U.S. Citizens and are taxed on world-wide income. Nonresidents for tax purposes follow different rules and are taxed on U.S.-sourced income. Nonresidents for tax purposes are not eligible for many of the tax benefits available to residents for tax purposes, including the ability to use most of the tax products marketed in the U.S. and the ability to benefit from many tax credits.

Residency for taxes ≠ Residency for immigration ≠ Residency for tuition

Whether or not an individual is considered a resident for taxes is independent of their residency status for immigration and tuition purposes.

F-1 & J-1 students and their F-2 & J-2 dependents are typically considered nonresidents for tax purposes during the first 5 tax years they are in the U.S.

This is because F-1 and J-1 students, along with their F-2/J-2 dependents, are exempt from being subject to the Substantial Presence Test. Being exempt from the Substantial Presence Test DOES NOT MEAN they are exempt from paying taxes or filing tax returns. Being exempt from the Substantial Presence Test means that they are automatically categorized as nonresidents during their first 5 tax years in the U.S. Nonresidents for tax purposes in F-1 and J-1 student status, along with their F-2/J-2 dependents, are required to file at least one tax form each year EVEN IF THEY HAD NO INCOME!

J-1 scholars and student interns, and their J-2 dependents, are typically considered nonresidents for tax purposes during the first 2 tax years they are in the U.S.

This is because J-1 scholars and student interns, along with their J-2 dependents, are exempt from being subject to the Substantial Presence Test. Being exempt from the Substantial Presence Test DOES NOT MEAN they are exempt from paying taxes or filing tax returns. Being exempt from the Substantial Presence Test means that they are automatically categorized as nonresidents during their first 2 tax years in the U.S. Nonresidents for tax purposes in J-1 scholar and student intern status, along with their J-2 dependents, are required to file at least one tax form each year EVEN IF THEY HAD NO INCOME!

Nonresidents for tax purposes must Form 8843

If you live in the U.S. for any length of time during a given tax year (even 1 day!), and you are a nonresident for tax purposes in F-1, F-2, J-1, or J-2 status, you must file Form 8843 with the IRS during the following year - EVEN IF YOU HAD NO INCOME! The purpose of Form 8843 is to verify that you are indeed exempt from the Substantial Presence Test, and you should be considered a nonresident for tax purposes. Form 8843 is technically tax STATEMENT and not a tax RETURN. If you received any taxable income during the tax year, you would need to file a tax return in addition to Form 8843. Sprintax will assist you with this! Remember – taxable income can be from fellowships, grants, and scholarships in addition to employment.

There are 3 basic categories of tax forms that you may encounter in the U.S.

1. Forms that you (the taxpayer) must complete and submit to the entity that is providing your taxable income (such as your employer, school, bank, etc.) so they can calculate the correct amount of federal income tax that should be withheld from your taxable income.
2. Forms that you (the taxpayer) will receive from the entity that is providing your taxable income (such as your employer, school, bank, etc.) to summarize your prior year tax history. These forms show you how much taxable income you earned and how much federal income tax you paid already because it was withheld from your income.
3. Forms that you (the taxpayer) must complete and submit to the U.S. government (the Internal Revenue Services, or IRS) each year to summarize your tax situation for the previous tax year (January 1 – December 31).

Here is a very basic overview of the most common tax forms you may encounter. If you receive a form not listed below, you may email[email protected] to determine how the form may impact your tax filing requirements.

Category 1: Tax forms that you complete and submit to your employer/school/bank

You

be asked to complete these forms. These forms are not required for everyone! You do not submit these forms directly to the IRS. These forms are not part of the tax return filing process.

Form W-4, Employee's Withholding Allowance Certificate

• Completed by the employee and submitted to the employer so the employer can determine how much federal income tax to withhold from the employee’s pay during the tax year
• This is one of the first forms you will complete as a new employee

Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, and the Affidavit of Unchanged Status

• Some banks require these forms for foreign national account holders
• If your bank asks you to complete these forms, bring the forms along with your immigration documents in person to the bank so a personal banker can assist you.

Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification

• Should be completed and submitted to provide your taxpayer identification number (SSN or ITIN)

Category 2: Tax forms that you receive from your employer/school/bank

You may receive some or all of these forms. These forms are not applicable for everyone! If you receive a form, review it to make sure your information is accurate (name, SSN, etc.) You do not have to complete anything on these forms but will use the information on them to complete your tax return. Copies of these forms are submitted to the IRS as part of the tax return (if you receive them).

W-2 (Wage and Tax Statement)

• This is an income statement, NOT a tax return.
• Form W-2 provides a summary of the total amount of wages earned during the year and the amount of money withheld for any taxes (federal, state, and local).
• You would only receive this document if you had employment during tax year (January 1 – December 31).
• Should be issued by no later than January 31^st.
• The information on this form is used to complete your tax return.
• You will not have to complete or add any information to this form.
• If you were employed by Texas A&M University, visit https://uas.tamu.edu/tax/faq/w-2.html for additional W-2 FAQs.

1042-S (Foreign Person’s U.S. Source Income Subject to Withholding)

• This is an income statement, NOT a tax return.
• Form 1042-S documents taxable scholarship income and scholarship or wage income that is exempt from withholding because of a tax treaty.
• You would only receive this form if you received a taxable scholarship, fellowship, or grant, or if you had any withholding exempted by a tax treaty, during the tax year (January 1 – December 31).
• Should be issued by no later than March 15^th.
• The information on this form is used to complete your tax return.
• You will not have to complete or add any information to this form.

1099-INT or 1099-DIV (Income from Interest or Dividends)

• This is an income statement, NOT a tax return.
• These forms are issued by your bank or financial institution to show the income you earned from your bank accounts and other investments.
  • Note: Bank interest is not considered taxable income for those who are still nonresidents for tax purposes.
• The information on these forms is used to complete your tax return.
• You will not have to complete or add any information to these forms.

1099-MISC (Miscellaneous Income)

• This is an income statement, NOT a tax return.
• Form 1099-MISC is used to show "independent contractor" income. Sometimes students who work in off-campus jobs for CPT, OPT, or Academic Training are given this form to document their job income instead of receiving Form W-2.
• If the income shown on the 1099-MISC is very large, you may owe taxes when you file your return because taxes were not withheld from "independent contractor" income.
• The information on this form is used to complete your tax return.
• You will not have to complete or add any information to this form.

1098-T (Tuition Statement)

• This is a tuition statement, NOT a tax return.
• Form 1098-T is issued by educational institutions in the U.S. to show the educational expenses for each tax year (January 1 – December 31).
• This form helps residents for tax purposes to take advantage of education tax credits.
• Nonresidents for tax purposes are not permitted to utilize this form but should keep it for their records.
• The information on this form is used to complete your tax return IF you are a resident for tax purposes.
• You will not have to complete or add any information to this form.
• If you are were a resident for tax purposes during the previous tax year, visit https://uas.tamu.edu/tax/faq/1098-t.html for additional 1098-T FAQs.

Category 3: Tax forms that you may have to complete and submit to the IRS

You may not have to complete all these forms. You DO submit these forms directly to the IRS. These forms are part of the tax return filing process.

Nonresidents for Tax Purposes

• Sprintax will help you complete these forms!
• Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition
  • Does NOT require an SSN or ITIN
  • If you are ONLY filing Form 8843 because you earned no taxable income, then technically you are filing a tax STATEMENT with the IRS and NOT a tax RETURN

Residents for Tax Purposes

• Form 1040, U.S. Individual Income Tax Return

I have no U.S. income. Do I need to file taxes?

Most international students and scholars DO have to file at least 1 tax form with the U.S. government each year even if they earned no income in the U.S. Use the Sprintax software to determine whether you are required to file anything. Sprintax will assist you in filing the appropriate documentation.

I will be outside the US before I can file my taxes. Do I still need to file?

Yes. Even if you have already left the U.S., you should still file your tax forms if you were present in the U.S. during the previous tax year (January 1 – December 31). More information can be found athttp://blog.sprintax.com/file-nonresident-tax-return-outside-usa/.

What is a tax refund?

When you file a federal tax return with the U.S. government, you might be issued a refund for

. If you did not pay any federal income taxes during the prior tax year, you will not receive any refund. If you paid the correct amount of federal income taxes during the prior tax year, you would not receive a refund. If you did not pay enough in federal income taxes during the prior tax year, you could even owe the U.S. government for the remainder.

I did not file any tax forms last year, but I was in the U.S. What should I do?

International students in F-1/J-1 student status, and their F-2/J-2 dependents, as well as international scholars and student interns in J-1 status and their J-2 dependents, are required to file at least one tax form (Form 8843) for each tax year they are in the U.S. as a nonresident for tax purposes regardless of whether they earned any income from U.S. sources. If you had no income from U.S. sources during a tax year, the only form you should have filed would have been Form 8843. You can access prior year versions of this form athttps://www.irs.gov/forms-pubs/about-form-8843. If you did have income from U.S. sources during the prior tax years, you likely should have filed a tax return (such as Form 1040NR) in addition to Form 8843. Sprintax can assist you with filing your Form 8843 and/or your tax return for prior years. This service will result in an additional fee that is not included with the ISSS access code.

I filed my tax forms incorrectly in a previous year. What should I do?

International students in F-1/J-1 student status, and their F-2/J-2 dependents, are typically considered nonresidents for tax purposes for the first five tax years they are in the U.S. International scholars and student interns in J-1 status and their J-2 dependents are typically considered nonresidents for tax purposes for the first two tax years they are in the U.S. If you filed a tax return as a resident when you should have instead filed as a nonresident for tax purposes, Sprintax can assist you with filingan amended tax returnfor the impacted tax year(s). This service will result in an additional fee that is not included with the ISSS access code.

Do I need a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to file taxes?

An SSN or ITIN is not required if you are only filing Form 8843. An SSN or ITIN is required if you need to file a tax return because you received taxable income from U.S. sources during the tax year (January 1 – December 31).

SSN

• F-1 and J-1 Students: If you have had on-campus employment, or if you have been employed through Curricular Practical Training (CPT), Optional Practical Training (OPT), or Academic Training, then you qualify for an SSN based upon employment.
• If you are in F-1 status, you can only obtain an SSN with an employment offer.
• If you are in J-1 status, you may qualify for an SSN without an employment offer.
• If you are eligible for an SSN, then you do not qualify for an ITIN.
• Find more information about SSNs for J-1 scholars and student interns

ITIN

• If you have taxable income that is not based on employment, and you are not eligible for an SSN, then you may qualify for an ITIN.
• If you are a dependent who is being claimed on a tax return, and you are not eligible for an SSN, then you may qualify for an ITIN.

Find more information about ITNs.

As a nonresident for tax purposes, can I file jointly with my spouse or claim dependents?

Typically, nonresidents for tax purposes cannot file jointly or claim dependents, but there are some exceptions:

• If either you or your spouse is a resident for tax purposes, you may file jointly and claim dependents.
• If you are a citizen of Canada, India, Mexico, and South Korea, your tax treaty may permit you to claim your dependents even if you are filing as a nonresident for tax purposes. Sprintax will help you figure out if the tax treaty applies to you or not.

I will not be able to file my tax return by the deadline. What should I do?

If you need additional time to complete the federal tax return, you will need to file Form 4868 with the IRS by no later than the tax return filing deadline to request an extension. For assistance with this process, please consult with Sprintax or visithttps://www.irs.gov/forms-pubs/about-form-4868.

My question is not answered here. Where can I get help?

If you have additional tax-related questions, please review the following additional resources:

• Review all content on the ISSS Tax Information webpage.
• Contact SPRINTAX for assistance with your tax questions.
• Review the IRS website at https://www.irs.gov/.
  • Visit https://www.irs.gov/uac/contact-my-local-office-internationally if you are outside the U.S.
• Review the Texas A&M University Tax Compliance and Reporting webpage at https://uas.tamu.edu/tax/index.html.
• Find more information about U.S. state income tax processes at http://www.taxadmin.org/state-tax-forms.