Overview

Foreign students and visiting scholars in the U.S. face a tax system with rules that differ from U.S. citizens and resident aliens. Your filing obligations depend on two things: your tax residency (nonresident vs. resident for tax purposes) and the type/source of income you received in the year. Many international students must file at least Form 8843 even if they had no income; others must file Form 1040‑NR (U.S. Nonresident Alien Income Tax Return) to report wages, scholarships, fellowships, or other U.S. source income. (See IRS guidance for students and scholars: https://www.irs.gov/individuals/international-taxpayers/students-and-scholars).

In my practice working with international students for over 15 years, I regularly see two outcomes: (1) missed required filings, especially Form 8843, and (2) unclaimed treaty benefits or misclassified scholarship reporting that increases tax bills unnecessarily.

Who is a nonresident for tax purposes and why it matters

  • Tax residency is not the same as immigration status. The IRS uses the substantial presence test to decide if you are a resident for tax purposes; certain visa categories (commonly F-1 and J-1) are ‘‘exempt’’ from counting days for a limited number of years. For example, F‑1 students are typically exempt from counting days for up to five calendar years; some J‑1 visitors or researchers have different exemption periods — check Publication 519 for details (IRS Publication 519, U.S. Tax Guide for Aliens).
  • Nonresident aliens generally file Form 1040‑NR for U.S. source income and cannot use some standard deductions available to residents (with very limited treaty exceptions, e.g., some India treaty provisions). Residency status affects which forms you file, your available deductions, and whether your worldwide income is taxed.

(IRS Pub. 519: https://www.irs.gov/publications/p519)

Common forms — what you’ll likely encounter

  • Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition: required of most nonresident students/scholars who are exempt from the substantial presence test even if they earned no income (https://www.irs.gov/forms-pubs/about-form-8843).
  • Form 1040‑NR, U.S. Nonresident Alien Income Tax Return: used to report wages, scholarship income that is taxable, and other U.S. source income.
  • Form W‑2: reports wages from U.S. employers (on‑campus jobs or authorized off‑campus work).
  • Form 1042‑S: reports scholarship/fellowship payments and amounts withheld; also used to report treaty‑exempt income.
  • Form 8233: used to claim certain treaty withholding exemptions for compensation for independent personal services performed in the U.S. (when applicable).

(IRS resources: Forms 1040‑NR, 1042‑S, 8233 pages on IRS.gov.)

Tax treaties and scholarship/wage exemptions

Tax treaties between the U.S. and other countries can change how income is taxed. Treaties vary: some exclude scholarship and fellowship income, others provide exemption for wages for training or research up to a time limit, and some allow additional deductions or exemptions. Always read the specific treaty article that applies to students or researchers from your home country or use the IRS list of tax treaties (https://www.irs.gov/individuals/international-taxpayers/tax-treaties).

Important practical point: a treaty benefit is not automatic — you must claim it on the correct form (for example, on Form 1040‑NR or Form 8233) and, where required, provide documentation to your employer or withholding agent. I have seen students who paid withholding on scholarship income that a treaty would have exempted; they later recovered funds only by filing the correct return and attaching treaty citations.

(IRS Tax Treaties: https://www.irs.gov/individuals/international-taxpayers/tax-treaties)

Step‑by‑step filing checklist

  1. Determine your tax residency using Publication 519 and the substantial presence test. Keep a clear record of entry/exit dates.
  2. Gather documents: passport and visa pages, I‑94, Form W‑2, Form 1042‑S (if scholarship/fellowship reported), Form 1099 (if any), and statements of grants or stipends.
  3. If you have no U.S. source income, file Form 8843 by the tax deadline (typically the same deadline as returns). Many universities require proof of filing; keep a copy.
  4. If you received wages or taxable scholarships, prepare Form 1040‑NR. If a treaty applies, determine the correct treaty article and attach the supporting statement when filing.
  5. Submit federal return and any required state returns. States vary; some may require filing even if you owe no federal tax.
  6. Keep copies of all filings and treaty citations for your records and visa or tax audits.

Withholding and practical traps

  • Scholarship payments that pay for tuition, fees, books, and required supplies are generally not taxable; amounts used for room, board, or research stipends often are taxable unless a treaty says otherwise. Forms 1042‑S and W‑2 will indicate what was reported and withheld.
  • Nonresident aliens are often taxed at higher rates for certain incomes and are generally not eligible for the standard deduction (exceptions are rare and treaty‑specific). (See Pub. 519.)
  • Universities sometimes withhold tax from scholarship payments by default. If you believe a treaty or exemption applies, ask your payroll or international office for the process to certify exemption or to issue Form 8233 if appropriate.

I regularly advise students to confirm withholding status early in the academic year. In one case a student was able to avoid months of unnecessary withholding by completing an employer’s treaty‑claim paperwork at the start of term.

Common mistakes and how to avoid them

  • Not filing Form 8843 when required. Even with zero income, this can create problems with future immigration or tax questions.
  • Filing the wrong return (e.g., filing Form 1040 for a nonresident). Use Pub. 519 guidance to check residency.
  • Missing treaty claims or failing to attach supporting forms when required. Treaties must be claimed on the return or by the employer for withholding relief.
  • Forgetting state returns. State filing rules differ and often require a separate return.

Where to get help

For an explanation of treaty mechanics and examples, see our glossary article on Tax Treaty and Tax Treaty Benefits. For questions about withholding from wages for nonresident aliens, see Understanding Federal Tax Withholding for Nonresident Aliens.

Actionable tips (quick wins)

  • File Form 8843 every year you are present and exempted from the substantial presence test, even with no income.
  • Check Form 1042‑S carefully for scholarship income and withholding; it may show treaty‑exempt amounts.
  • Use campus resources early (payroll, international office, tax workshops). If you owe tax, set up payment plans rather than ignoring notices.

Final notes and disclaimer

This guide is educational and intended to help foreign students and scholars navigate typical U.S. tax filing situations. It does not replace personalized tax advice. For questions about your specific facts — visa history, treaty eligibility, or state filing obligations — consult a tax professional experienced with nonresident returns or contact the IRS International Taxpayer office.

Authoritative sources consulted: IRS Students and Scholars page; IRS Form 8843 page; IRS Publication 519; IRS Tax Treaties page. (https://www.irs.gov/individuals/international-taxpayers/students-and-scholars; https://www.irs.gov/forms-pubs/about-form-8843; https://www.irs.gov/publications/p519; https://www.irs.gov/individuals/international-taxpayers/tax-treaties)

Professional disclaimer: This article is for general information only and should not be taken as legal or tax advice. For help tailored to your situation, consult a qualified tax professional.