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Frequently Asked Tax Questions And Answers
Keyword: Student
1.16 IRS Procedures: W–4 - Allowances, Excess FICA, Students, Withholding
As a full-time student, am I exempt from federal taxes?
Every U.S. citizen or resident must file a U.S. income tax return if certain
income levels are reached. There is no exemption from tax for full-time students.
If you are a full-time student, you may not be working full time. Factors
that determine whether you have an income tax filing requirement include:
the amount of your income (earned and unearned),
whether you are able to be claimed as a dependent,
your filing status, and
your age.
If your income is below the filing requirement for your age, filing status,
and dependency status, you will not owe income tax on the income and will
not have to file a tax return. You may choose to file if you have withholding
that you would like refunded to you.
You may have given your employer a Form W-4 (PDF), Employee's
Withholding Allowance Certificate, claiming exemption from withholding.
To claim exemption from withholding, you generally would have to have had
no tax liability the previous year and expect none in the current year. An
exemption certificate is good for the calendar year.
References:
I am a full-time college student, can I claim exemption from withholding
on my W-4 form?
You are not automatically exempt from federal income tax withholding because
you are a full-time student. To claim exemption from withholding, the following
two statements must be true:
For the previous year, you had a right to a refund of ALL Federal income
tax withheld because you had no tax liability, and
For the current year, you expect a refund of all Federal income tax withheld
because you expect to have no tax liability.
References:
I am a graduate student and serve as a teaching assistant. I would
like to know whether FICA taxes need to be withheld from my paychecks?
Students who perform services for the school, college, or university where
they are enrolled and regularly attend classes are usually not subject to
social security and Medicare taxes.
If the student works for a public school, college or university which is
subject to a section 218 agreement, the student's services are automatically
subject to social security and Medicare taxes if the state has chosen to cover
students under its section 218 agreement with the Social Security Administration.
The employer can tell you whether its students' services are subject to social
security and Medicare taxes under a section 218 agreement.
References:
- Publication 15, Circular E, Employer's Tax Guide
- Federal Regulation section 31.3121(b)(10)-1
As I understand the law, student stipends are exempt from FICA and
Medicare taxes. If my university takes these taxes out of my stipend income,
can these taxes be recovered in some way?
If you are not performing a service for the university, your stipend would
be subject to income tax only if it does not meet the qualified scholarship
rules. Please refer toPublication 970 Tax Benefits for
Education, for information on when a stipend would be a qualified scholarship,
which would not be subject to social security and Medicare taxes. If you are
performing a service for the university, your income is taxable for income
tax purposes, but would generally be exempt from social security and Medicare
taxes if you are enrolled and regularly attending classes unless you are covered
under a section 218 agreement. Refer to Publication 15, Employer's
Tax Guide.
If your employer has been withholding social security and Medicare taxes
from your stipend, the employer should refund the withheld tax. If the employer
refuses to do so, Form 843 (PDF), Claim For
Refund and Request For Abatement, can be filed to claim credit for the
incorrectly withheld tax.
References:
2.1 Filing Requirements/Status/Dependents/Exemptions: Filing Requirements
I am a student attending college and working part-time. Do I have
to file a tax return?
If you are an individual who may be claimed as a dependent on another person's
return and you are single and under age 65, you must file a return if any
of the following circumstances apply: first, your unearned income was more
than $750. Unearned income includes taxable interest, dividends, capital gains,
and trust distributions of interest, dividends, capital gains, and survivor
annuities. If you had an investment loss, your unearned income could be a
negative amount. Second, your earned income was more than $4,750. Earned income
includes wages, tips, taxable scholarship and fellowship grants, and salaries.
If part of your earned income is from tips, see Tax Topic 402 , Tips .
Third, your total income was more than the larger of $750 or your earned income
(up to $4,750) plus $250. If you file Form 1040EZ (PDF), Income
Tax Return for Single and Joint Filers With No Dependents , your total
income is the same as your adjusted gross income. If you are 65 or older,
or married, refer to the instructions in your tax package or Publication 929, Tax
Rules for Children and Dependents, or Publication 501, Exemptions , Standard
Deduction, and Filing Information .
References:
How much does a student have to make before he or she has to file
an income tax return?
If you are an unmarried dependent, you must file a tax return for 2003
if you have earned income of more than $4,750, unearned income of more than
$750, or if your gross income is more than $750 and exceeds your earned income
by more than $250. If part of your earned income is from tips, see Tax Topic 402, Tips .
Even if you do not have to file, you should file a federal income tax return
to get money back if any of the following apply:
You had income tax withheld from your pay.
You qualify for the earned income credit.
You qualify for the additional child tax credit.
Refer to Publication 501, Exemptions, Standard Deduction and Filing
Information, for an explanation of the five exemption tests and filing requirement
rules.
References:
2.3 Filing Requirements/Status/Dependents/Exemptions: Dependents & Exemptions
If you have a child who works, but is still in high school, can
the parents claim him or her as a dependent or does the student file his or
her own taxes?
You can claim your child as a dependent as long as you meet the five dependency
exemption tests. If your child was a under the age of 24 at the end of the
year, and a full-time student he/she would not be subject to the gross income
test. The child should file his or her own tax return, if required, but should
not claim a personal exemption if you can claim your child as a dependent.
Refer to Publication 501, Exemptions, Standard Deduction and Filing
Information , for more information.
References:
If I claim my daughter as a dependent because she is a full-time
college student, can she claim herself as a dependent when she files her return?
If you claim your daughter as a dependent on your income tax return, she
cannot also claim herself on her income tax return.
If an individual is filing his or her their own tax return, and if the
individual can be claimed as a dependent on someone else's return, then the
individual cannot claim their own personal exemption. In this case, your daughter
should check the box on her return indicating that someone else can claim
her as a dependent.
References:
My child is 21, and goes to college part-time. Can I claim her as
a dependent or does she have to be a full-time student before I can claim
her?
Since your child is over the age of 19 and not a full-time student, the
gross income test applies. In 2003, if her gross income was $3,050 or more,
you would not be able to claim her as a dependent. If her gross income was
less than $3,050 and the remaining four tests are met, you may claim the dependency
exemption for her:
Member of household or relationship test.
Citizen or resident test.
Joint return test.
Support test.
Refer to Publication 501, . Exemptions, Standard Deduction and
Filing Information , for more information.
References:
I have a dependent child, a full-time student, who will be 24 years
old at the end of the tax year. Can I still claim dependency as a deduction
on my tax return for this child ? Does it matter how much money he makes?
Does it make a difference if he puts all of his wages in the bank?
You can claim your child as a dependent as long as the five dependency
exemption tests are met . Since your child will not be under the age of 24
at the end of the tax year, he is subject to the gross income test. The amount
of money he makes will be considered in applying the gross income test. If
he puts all his wages in the bank and does not use it for his support, it
will not be counted as support in applying the support test. Refer to Publication 501, Exemptions, Standard Deduction and Filing Information,
for more information.
References:
13.4 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - General
I was an international student (F-1 visa) until October 1, then my visa
status was changed to H-1. Should I file my income tax return as a dual status or
nonresident alien?
Assuming you were not in the U.S. on your F-1 student visa for over 5 years, you
may file as a nonresident for the entire year or, if you qualify under the first year
choice, you may file as a dual status alien. Please refer to Publication 519, U.S.
Tax Guide for Aliens, for additional information.
References:
13.6 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - Students
I am a foreign national and last year I changed my type of visa from F-1
student to H-1 work visa. Does my visa status change how I file my tax return or what
forms I use?
It depends on whether or not you qualify as a resident alien. As a foreign national
temporarily in the U.S. and now under an H-1 visa, you must file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return and Form 8843 (PDF), Statement for Exempt Individuals and Individuals with a Medical
Condition (if you do not meet the substantial presence test). In order to file
a Form 1040, Individual Tax Return, you must meet the substantial presence test. Please
refer to Publication 519, U.S. Tax Guide for Aliens , for a detailed
discussion of the Substantial Presence Test. You may also qualify to file
as a dual status taxpayer for the year of your visa change. Refer toTax Topic 852 ,
for dual status information.
References:
I am an F-1 student status who was employed during my school studies and
directly afterwards I completed practical training. Do I have to pay FICA taxes? Which
taxes should be taken out of my pay?
Generally, services performed by you as a nonresident alien temporarily in the
United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section
101(a)(15) of the Immigration and Nationality Act are not covered under the social
security and medicare programs if the services are performed to carry out the purpose
for which you were admitted to the United States. This means that there should be
no withholding of social security or Medicare taxes from the pay you receive for these
services. These types of services are very limited, and generally include only on-campus
work, practical training, and economic hardship employment. However, you are covered
under the social security and medicare programs for these services if you are considered
a resident alien, even though your nonimmigrant classification ("F," "J," "M," or
"Q") remains the same. Social security and Medicare taxes will be withheld from your
pay.
Additionally, any student who is enrolled and regularly attending classes at a
school, college, or university may be exempt from social security and Medicare taxes
on pay for services performed for such school, college, or university.
References:
Are nonresident alien students, with F-1 or J-1 visas and employed by a
U.S. company during the summer, required to have federal income taxes withheld from
their paychecks?
The following discussion generally applies only to nonresident aliens. Wages and
other compensation paid to a nonresident alien for services performed as an employee
are usually subject to graduated withholding at the same rates as resident aliens
and U.S. citizens. Therefore, your compensation, unless it is specifically excluded
from the term "wages" by law, or is exempt from tax by treaty, is subject to graduated
withholding. Nonresident aliens must follow modified instructions when completing
Form W-4. Please refer to Publication 519, U.S. Tax Guide for Aliens,
for directions on completing Form W-4 (PDF), Employee's
Withholding Allowance Certificate .
References:
I am a student from the People's Republic of China currently studying in
the United States. How does the income tax treaty between the U.S. and China apply,
especially for students with scholarships and fellowships?
If you are in the United States solely for the purpose of your education, training,
or obtaining special technical experience, you may be able to exclude from your income
grants or awards that you receive from a government, scientific, educational, or other
tax-exempt organization. You also may be able to exclude payments that you receive
from abroad for the purpose of your maintenance, education, study, research, or training
and up to $5,000 of income that you receive from personal services performed in the
United States. Please refer to Publication 901 , U.S. Tax Treaties,
for further details.
References:
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