Payroll

Payroll Home Page Picture

Tax Information For
International Visitors (Teachers & Researchers)
Michigan State University

The following is a summary of general tax obligations for international visitors. For a more complete explanation of tax rules, consult IRS Publication 519, U.S. Tax Guide for Aliens.

Residence Status for Tax Purposes
If you are not a U.S. citizen, your U.S. tax obligations depend on your "residence status for tax purposes". The Internal Revenue Service (IRS), the tax-collecting agency of the U.S. government, refers to non-U.S. citizens as "aliens". According to the IRS, you are either a "Resident alien" or a "Non-resident alien" for tax purposes. If it is determined that you are a resident alien for tax purposes, you are subject to all taxes in the same manner as a U.S. Citizen. Those taxes include Federal Income tax, FICA tax, Medicare tax, the State of Michigan income tax and possibly a local city tax.

Federal Income Tax Withholding
The process of deducting taxes from wages is called "Income Tax-Withholding". Tax withholding is required by the IRS. The rules governing how much tax (if any) the University is required to withhold are based on several factors: (1) your residence status for tax purposes, (2) IRS regulations, (3) information you furnish on tax forms.Certain international visitors may be able to claim exemption from U.S. taxes based on a tax treaty. See page 2 for more information.

  • Nonresident Alien Withholding nonresident alien employees must follow special instructions when completing the IRS Form W-4. According to IRS regulations, a non-resident alien for tax purposes can claim the following for federal tax withholding;
    1. "Single (S) status (regardless of actual marital status);
    2. Indicate on form "Non-Resident Alien"
    3. Claim "one" (1) allowance.
    Note: students from India can claim allowances like U.S. Citizens

FICA Tax Withholding
Social Security Tax (also known as FICA) is an employment tax. FICA must be withheld from wage payments for non-U.S. citizens who have been determined to be "resident aliens for tax purposes" and is deducted in two components: Old Age, Survivors, Disability Insurance or OASDI (4.2%) and Medicare (1.45%). Non-U.S. citizens who hold J-1 classifications who have been determined to be "nonresident aliens for tax purposes" are not subject to the FICA and Medicare tax. Because the determination is based on the length of time in the U.S., your status may change.

FICA TAX EXEMPTION FOR CERTAIN NONRESIDENT ALIENS: Professors and researchers who hold a J-1 classification are exempt from FICA/Medicare tax-withholding for the first two calendar years they are in the U.S.

Note: the term "calendar year" refers to the period January 1 through December 31. If you are present in the U.S. during any part of a particular calendar year, that year will count as one calendar year of U.S. presence even if you were only present for a part of the year.

F-2 and J-2 visa holders are subject to Social Security and Medicare taxes.

State of Michigan Tax Withholding
In addition to the Federal income tax-withholding, the University is also required to withhold state income tax. If you qualify for a tax treaty exemption, your wages may also be exempt from the State of Michigan income tax (see Tax Treaty Exemptions).

Local City Tax
Some cities within the State of Michigan assess an income tax to their residents. For example, residents of the city of Lansing are assessed a tax of approximately 1%. An additional form must be filed with the Payroll Office to request withholding from wages.

Tax Treaty Exemptions
Certain international visitors may be able to claim exemption from U.S. taxes based on a tax treaty agreement between the U.S. and their home country. You should contact the Payroll Department to see if you are eligible to take advantage of the treaty and whether you meet all of the requirements of the treaty.

Tax-Filing
International visitors who hold F-1, J-1, or H-1B classifications (and their spouses and dependent children) must file income tax returns regardless of whether or not they receive wages or scholarship in the United States.

"Filing an income tax return" means completing the appropriate forms to report the income (if any) that you received during a particular calendar year. By completing the forms, you determine whether or not you have met your U.S. tax liability (if any) for the calendar year. Generally for each calendar year you are present in the U.S., you must complete and submit all tax returns by April 15 of the following year. In most cases, you will need to file at least two income tax returns per year, one with the IRS, and one with the state of Michigan. If you reside in a city that assesses an income tax, you will be required to file an additional tax return with that city. Nonresident aliens are required to complete IRS Form 1040NR, U.S. Nonresident Alien Income Tax Return (plus all applicable attachments).

TAX REPORTING DOCUMENTS ISSUED BY THE UNIVERSITY: The University is required to furnish certain tax-reporting documents to you. In most cases, you are required to attach these documents to your tax returns. If you were paid wages, and had taxes withheld, the Payroll Department will provide you with Form W-2, Wage and Tax Statement by January 31 of the following calendar year. If you received income that was exempt from tax-withholding due to a tax treaty, the Payroll Department will provide you with Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding by March 15 of the following calendar year. In some cases, you may receive both a Form W-2 and a 1042-S if you were eligible for partial year exemption of taxes due to a tax treaty.

Tax Information
For more information regarding U.S. taxation of international visitors, you should consult the following IRS publications: Publication 519, U.S. Tax Guide for aliens, and Publication 901, U.S. Tax Treaties. International visitors may request copies of these publications as well as IRS forms and instructions, by calling the IRS forms hot-line at 1-800-TAX-FORM. For tax information, you can contact 1-800-829-1040.


Michigan State University