U.S. Tax Information for Nonresident Aliens
All Foreign Nationals living, visiting, working, or studying in the U.S. are responsible for compliance with United States laws and regulations. The Internal Revenue Service (“IRS”), the U.S. government tax authority, has issued strict regulations regarding the taxation and reporting of payments made to non-United States citizens. As a result, the University of Florida may be required to withhold U.S. income tax and file reports with the IRS in connection with payments made by UF to students, faculty, staff or guests who are not U.S. citizens or permanent resident aliens (green card holders) and who receive financial aid, scholarships, fellowships, awards, or compensation for services performed.
Federal Tax Treatment
The University of Florida must determine whether a foreign national will be treated as a “resident alien” or a “nonresident alien” for U.S. tax purposes. The substantial presence test is used to calculate the number of days that a foreign national is present in the U.S. and determine whether the individual is a nonresident alien or resident alien for purposes of calculating U.S. tax withholding. Students present in the U.S. on F1 or J1 visas are usually considered to be nonresident aliens for the first five calendar years (J1 non-students for two years) that they are present in the United States. UF is generally required to withhold taxes from all payments made to nonresident aliens. We are also required by law to report to the IRS all payments made to nonresident aliens, or to a third party on his or her behalf, regardless of whether the payment is subject to U.S. tax.
Taxable and Nontaxable Items
Payments to students for the following items are nontaxable:
- Tuition
- Book Allowance
- Required Registration Fees
- Mandatory Health Insurance
Taxable items include, but are not limited to, the following:
- Room and Board
- Fellowship Stipend (which does not require a service to be performed)
- Living Allowance
- Cash Award
- Travel Payment/Reimbursement
- Compensation (including a fellowship stipend that does require a service to be performed)
Tax Treaties
The U.S. maintains income tax treaties with over 50 different countries, and certain taxable payments made by UF to a foreign national may be exempt from U.S. tax based on an income tax treaty entered into between the U.S. and the foreign national's home country. The existence of a tax treaty does not automatically ensure an exemption from taxation; rather, you must satisfy the requirements for the exemption set forth in the tax treaty. In order to be considered for a tax treaty exemption, you must complete all the appropriate Federal forms. For more information, you can download the IRS document, P901 "US Tax Treaties".
Thanks to San Francisco State University for their help with this information.