Do International Students Have to File Tax Returns?

1040A tax form with money, calculator, pen

UPDATE: if you’re filing late, don’t panic, and read this first. If you owe extra taxes, the interest rate is relatively low, and if you’re expecting a refund, filing late just means there will be a delay in receiving your money.

The big question: Do international students have to file U.S. tax returns in 2016? If you had a U.S.-based job last year (at any time between January and December of 2015) or a taxable scholarship, the answer is yes.

It’s all about where your money comes from, how much you made, and a few other technicalities. According to the IRS website, the federal government expects “nonresident alien students and scholars” to file if they have:

1) A taxable scholarship or fellowship, as described in Chapter 1 of Publication 970, Tax Benefits for Education;
2) Income partially or totally exempt from tax under the terms of a tax treaty; and/or
3) Any other income, which is taxable under the Internal Revenue Code.

Publication 970 is an extensive form with sub-sections explaining what kind of scholarships and grants are considered taxable. However, you do not have to pay taxes on the following financial sources:

1) Foreign sources;
2) Interest Income from:

a. a U.S. bank
b. a U.S. savings & loan institution
c. a U.S. credit union
d. a U.S. insurance company

3) An investment, which generates Portfolio Interest (Described in Chapter 3 “Exclusions From Gross Income” – “Interest Income” – “Portfolio interest” of Publication 519, U.S. Tax Guide for Aliens);
4) A scholarship or fellowship, which is entirely a Tax Free Scholarship or Fellowship as described in Chapter 1 of Publication 970, Tax Benefits for Education; and/or
5) Any other income, which is nontaxable under the Internal Revenue Code. However, income, which is not taxable because of an income tax treaty must be reported on a U.S. income tax return even though no income tax is due on the U.S. income tax return.

Don’t worry if you feel overwhelmed by all this information: the U.S. tax system is among the most complicated in the world. Thankfully, the IRS offers what’s known as Volunteer Income Tax Assistance (or, VITA). If you made less than $54,000 last year, you can get free help with filing your U.S. income tax return. Visit this link to find the VITA site nearest you.

You can also use free tax filing software provided by TurboTax and HR Block. Note: some additional services, including e-filing, will involve added fees though you will have an opportunity to opt-in or skip these services when you file.

Good luck! And let us know about your international student tax filing experience on Facebook or Twitter.

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