Why Is My Employer Withholding Taxes If I’m An International Student?

You’re so excited you just got a new job (and we know how hard this is as an international student). You’ve worked hard for the past two weeks and are ready to get your first paycheck. Friday finally comes around and it’s payday and…you’re so underwhelmed by the actual amount you end up taking home. What are social security taxes? What are medicare taxes? What are federal income taxes? Why do I need to pay all these taxes if I’m only in this country for a bit? Well, reality is, we all have to pay taxes regardless of where we come from and how long we’re planing on staying. International students, however, do qualify for some exemptions so make sure you’re aware of them to avoid paying more than you should.

Federal Income Taxes. Yes, you need to pay these and there is no way around it. However, if you did not make a lot of money within a calendar year (less than $4,050 in 2018), you will get all of it back when you file your tax returns. Even if you’re doing authorized work as an independent contractor, federal income taxes will be withheld. In fact, as an international student, you may have more taxes withheld than normal – this is for the government to protect themselves from yon not filing your taxes at the end of the year and therefore not paying what you owe. By them withdrawing more than you actually owe, they ensure you will file your taxes at the end of the year in order to get some of that money back in the form of a tax refund.

Tax Treaties. Some counties do have tax treaties with the US and international students can take advantage of this. For the official IRS list and information, go here.

State Income Taxes. In addition to federal income taxes, some states also have income taxes of their own. If you live in one of those states, you will also be required to pay state income taxes (these will usually be withheld automatically from your paycheck). Please note some states will honor the tax treaties if you’re from an eligible country but some will not.

Social Security and Medicare Taxes (also known as FICA taxes). International students under F-1 visas do not need to pay social security and medicare taxes. If these are currently being withheld by your employer, you need to communicate this to them so they stop. If they’ve already withheld some within the same calendar year, you can ask them to reimburse the amount back to you. If they refuse, or say it’s too late, you will have to file Form 843 and Form 8316. Per the IRS, F-1 students (including students on OPT) are exempt as long as they are considered Non-Resident Aliens for tax purposes. This means that you have must have been in the US for less than 5 calendar years (for example, if you arrived in the US as a student in 2015, you will stop being exempt starting in 2020, regardless of what month you actually arrived in the US for the first time) . Even if you’re still a student but have been in the US longer than that, you will be considered a Resident for tax purposes and will no longer be exempt. You can go here for more information.

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