Frequently Asked Questions for International Employees

  1. Who is considered a nonresident?
    Anyone that is a resident of another country that enters the US and has not met Substantial Presence. There are many factors that are used in determining residency status for tax purposes.
  2. How does the University of Arizona determine residency status?
    The University uses a program called Glacier. It is an online program that employees/students complete.  Based on the information gathered, we determine if the person is a nonresident or resident for tax purposes.
  3. What types of payments can nonresidents receive?
    This is dependent on the Immigration Status, along with other factors.  Not every nonresident is eligible for all types of payment.
  4. Can a nonresident work after their Immigration status expires?
    No. Once the immigration status expires, the person must no longer work. Paperwork extending the immigration date should be submitted prior to expiration date to avoid any lapse in payment.
  5. Does a nonresident have to pay U.S. taxes?
    Yes. A nonresident has to pay the same taxes as a U.S. person. There are some exceptions based on Immigration Status, length of stay in the US, previous visits and country of residence.
  6. Are there restrictions for nonresidents when filling out their Form W-4?
    Per IRS Publication 519, www.irs.gov, nonresidents are only able to claim single and 1 or single and zero on their W-4 Form.  Residents of Canada, Mexico or South Korea, as well as, students from India, may claim additional withholding allowances on their W-4.  They still may only claim Single or Married; but withhold at the higher single rate.
  7. What allowances can nonresidents from Canada, Mexico, South Korea and students from India claim on their W-4?
    • Residents of Mexico and Canada can claim spouse if the spouse had no gross income or cannot be claimed by someone else as a dependent. To determine if someone qualifies as a dependent they must use the same rules as US citizens.
    • Residents of South Korea have the same rules except, 1) the spouse or children must live with them in the US some time during the year, and 2) The additional deduction for the exemptions must be prorated based on the ratio of the alien’s U.S. source gross income effectively connected with a U.S. trade or business for the tax year to the alien’s entire income from all sources during the tax year.  
    • Students from India can claim a spouse if the spouse had no gross income or cannot be claimed by someone else as a dependent.  They can claim exemptions for each of your dependents not admitted to the United States on "F-2," "J-2," or "M-2" visas, if they meet the same rules that apply to U.S. citizens.
  8. So, every nonresident not from Canada, Mexico, South Korea or a student from India must claim Single with either 0 or 1 withholding allowance on their Form W-4?
    No, those that have become Resident Aliens for tax purposes, those on a H1-B, TN or O-1 immigration status and Permanent Residents all may complete their W-4 as a US person. 
  9. Is there a difference between a J-1 and an F-1 immigration status?
    Yes, an F-1 is always a student whereas a J-1 is an exchange visitor and there are different J-1 types (examples are: Professors, scholars, short term scholars, Research Scholars, Students, Trainees, Teachers, Specialists, Alien physician, Nannies/Au pairs, and Camp counselors).
  10. Are there tax implications based on the immigration status?
    Possibly. Taxes are based on length of time a nonresident is present in the U.S., treaty availability and W-4 withholding allowances.
  11. What is FICA?
    FICA is a combination of federal withholdings called Medicare and Social Security.
  12. Does a nonresident have to pay FICA?
    Yes, J-1 and F-1 students are both exempt from FICA for 5 years from date of entry into the US.  Other J-1 Visa types are exempt from FICA for 2 years.  Also, J-1 non-student status can change from FICA exempt to FICA subject and back based on their time in the US.
  13. Does immigration status affect state taxes?
    No, with an exception for those claiming a Federal Tax Treaty. These employees may not claim exempt from state tax during the treaty period.  
  14. How does a Visa Status change affect a tax treaty?
    If an employee/student changes status they may no longer qualify for a tax treaty. Treaty exemption is usually based on the original purpose in entering the US. Also, some countries don’t have treaty agreements for all Visa types.
  15. What should a nonresident do if they change their immigration status, or extend their stay in the US?
    The nonresident should update their GLACIER record and submit the proper documentation to the Payroll Operations office. They will use the User ID and Password they created when they originally completed GLACIER. If they cannot remember their password, there is a link available on the login screen at www.online-tax.net that will send an email with a link to create a new password. The GLACIER record should be updated immediately after the status change (within 10 days). ISS also sends a list each month with immigration status changes. Not updating status in a timely manner can mean tax owed.
  16. Is there a list of countries with which the U.S. has a tax treaty?
    Yes, IRS Publication 901, US Tax Treaties at www.irs.gov.  The publication contains complete information on countries with U.S. tax treaties and who is eligible to claim a treaty.
  17. Is there any resource on campus that can help nonresidents who are filing their taxes here for the first time?
    Unfortunately, no. There is no one on campus that can assist with completing tax forms.  Anyone with questions should contact the IRS or a financial advisor.  We do offer GLACIER Tax Prep to assist nonresidents in completing their tax returns.
  18. What is GLACIER Tax Prep?
    GLACIER Tax Prep is offered through Glacier, provided by the International Students Office. It is for nonresident students and employees to complete their federal tax return form (the form must be printed and mailed). There is also a link for state tax returns.
  19. Should a nonresident student that is receiving Scholarship/Fellowship complete Glacier?
    A student that is not working only needs to complete Glacier if a portion of their Scholarship/Fellowship is non-qualified (taxable).  If Glacier is completed by a student that will not have taxable Scholarship/Fellowship there will be no tax implications.
  20. What portion of the Scholarship/Fellowship would be taxable?
    Any part of a scholarship that is non-qualified (exceeds the cost of tuition and mandatory fees). 
  21. What tax forms does a nonresident get for completing their tax return?
    • For taxable wages/compensation (income earned for work performed), the nonresident will receive a Form W-2.
    • If there is income exempt under a tax treaty the nonresident employee will receive a Form 1042-S.
    • For taxable scholarship/fellowship, a 1042-S will be issued. For all other types of payments a 1042-S will be issued.
  22. How does the nonresident get their tax forms?
    The Form W-2 is available through UAccess > Self Service > Payroll and Compensation > View W-2/W-2c Forms. The 1042-S Form is available after logging in to Glacier or will be mailed (if no email address is in Glacier).
  23. I am from Canada. Why is my income being taxed since I am eligible for the US-Canada Income Tax Treaty?
    The University of Arizona does not facilitate the US-Canada income tax treaty as it has a total income dollar limit. The US-Canada income tax treaty limits your total income in the tax year to $10,000.00. If your income is $10,000.01 or more, the entire amount of income is taxable. Wages, interest, dividends, scholarship and royalties are a few examples of income that would be reported as part of the $10,000.00 income limit.

    The University of Arizona has taken a conservative route in making this decision. The University feels it is better to withhold tax during the calendar year, rather than the students/employees possibly owing taxes to the IRS at the end of the year.

    Students/employees may be eligible for a refund by claiming the treaty on their income tax (1040-NR).