Taxes

We are all subject to taxation in the U.S.  Even as an international student and scholar in the U.S., you are subject to taxes.  In some cases your tax obligation matches that of everyone in the U.S., and in some cases, you will have different rules. 

F-1 students and J-1 students and scholars will receive email instructions on calculating residency and other details as soon as information is available.  You may find the information below as a starting point while you wait.

Taxes for International Students

Tax Residency

If you are an international student in F-1 or J-1 status, you must first determine if you are a resident or non-resident for federal tax purposes.  F-1 and J-1 students are exempt from counting days of presence for the Substantial Presence Test (SPT) if in the U.S. for any part of 5 calendar years.   

J-1 scholars and trainees are exempt from counting days of presence for the SPT if in the U.S. for any part of 2 of the preceding 6 years (you must include any time spent in exempt status as a student).

IRS Electronic Toolkit for Non-resident Alien VITA/ICE Site

IRS U.S. Tax Guide for Aliens

Are you an Exempt Individual?

The Internal Revenue Service (IRS) has information on the IRS website to help you determine if you are exempt. The IRS also provides a Decision Tree to help you determine if you are exempt. Another version of this Decision Tree can be found by clicking here.

Tax Software

Non-Residents for Tax Purposes: Each year, DISSA purchases tax software for those who are classified as “non-resident for tax purposes” and will send you an email when we are ready to distribute the passwords to use the software.

Residents for Tax Purposes: The Internal Revenue Service (IRS) has many options for free file tax software.

Volunteer Assistant Programs at University Park campus

Residents for Tax Purposes: The Volunteer Income Tax Assistant Program (VITA, an IRS-sponsored volunteer program) and managed at University Park through Penn State Cooperative Extension (College of Agricultural Sciences), Penn State School of Law, and Smeal College of Business.

Information for Residents for Tax Purposes

This is the text that would start the page off if you have determined that you are a resident for tax purposes, the following may help you.  Please note, you will be taxed on your worldwide income.

  • If you are a resident for tax purposes, you should complete the same forms as those completed by U.S. citizens
  • If it is determined you are a resident for tax purposes and you had income in 2016, you must complete the 1040 or 1040EZ AND the local tax form
  • IRS provides free tax software if your income is less than $60,000.

Income Tax Forms

Federal Forms for Non-Residents for Tax Purposes

1040NR-EZ
8843

Federal Forms for Residents for Tax Purposes

1040EZ

Pennsylvania State Tax Forms for All

PA40-IN

PA40

eFiling

State College Borough Tax

Centre Tax Agency collects for the local municipalities in and around State College. They are listed on the form.
Non-residents with proof of the I-20 or DS-2019, passport, and I-94 pay a reduced rate (see the tax rate on page 2 of the tax form).

Centre Tax Agency (CTA) - Individual Earned Income & Net Profits Tax (EIT) Return

Individual Taxpayer Identification Number (ITIN)

Overview

If you are not eligible for a Social Security card, you may need to apply for an individual taxpayer identification number (ITIN) which is a tax identification number issued by the Internal Revenue Service (IRS), a U.S. government agency. Penn State’s Bursar’s office will contact you if an ITIN number is required.

Withholding of Tax

You may be required to obtain an ITIN if you receive a scholarship where the amount exceeds tuition or if you are a non-degree international student (exchange student for example) and have a scholarship of any amount. See IRS Publication 1915 for a more in-depth explanation of ITINs. Failure to obtain an ITIN may result in an increased tax withholding rate. According to the IRS,

In most cases, a foreign person is subject to U.S. tax on its U.S. source income. Most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%. A reduced rate, including exemption, may apply if there is a tax treaty between the foreign person's country of residence and the United States. The tax is generally withheld (chapter 3 withholding) from the payment made to the foreign person.

[Source: IRS Publication 515, (2019), Withholding of Tax on Nonresident Aliens and Foreign Entities, accessed 3/27/2019 at https://www.irs.gov/publications/p515#en_US_2019_publink1000224970.]

Application Procedure

Before applying for an ITIN number on iStart, you must first obtain a Social Security Denial Notice from the Social Security Administration (SSA) Office. To do so, visit the Social Security Administration office nearest your campus with your immigration documents (passport, I-20 or DS-2019 and your most recent I-94).

Note: For University Park students, the Social Security Administration office is located at 901 University Drive, Suite 2, State College, PA 16801. For campus students, please use the Social Security Office Locator tool.

Once you have received the denial notice, you must upload your documents and follow instructions in the ITIN eForm on iStart to complete Form W-7, Application for IRS Individual Taxpayer Identification Number.  

If your request is approved, DISSA will send an email asking you to bring the following original documents:

  1. Visa (except Canadians);
  2. Passport biographical page;
  3. I-94; and
  4. I-20 or DS-2019.

DISSA advisers are IRS Acceptance Agents.  As such, an adviser will confirm the validity of your documents so that certified true copies can be submitted with your ITIN application. DISSA then mails your application to the Internal Revenue Service.

Please note that it may take several months for the IRS to review your ITIN request. If you receive a denial or rejection notice, please speak to an international student adviser. DISSA cannot call the IRS on your behalf unless you are physically present to give your authorization.