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F-1/J-1 Student Visas and J-1 Non-Student Visas

F-1/J-1 Student Visas and J-1 Non-Student Visas

F-1 or J-1 Student Visa holders

are FICA and Medicare exempt for 5 calendar years.   It begins when you first arrived in the United States, not when your employment starts. Submitting your FNIF packet in a timely manner will help in determining your tax status regarding your FICA/Medicare tax exempt eligibility and being taxed according to the IRS regulations.

MSU does not participate in Tax Treaties for Students.  If you are eligible for a tax treaty, you may take advantage of it when you file your tax return.

 

J-1 Non-Student (Researchers and Professors) Visa holders

are FICA and Medicare exempt for 2 calendar years.

MSU does participate in Tax Treaties for Salary employees on a J-1 non-student visa.  Countries may differ in their eligibility and time limits, therefore, it is imperative to submit the FNIF packet to Payroll, in a timely manner, so that payroll can run a tax analysis to verify your tax status.

 

H-1, TN and O-1 Visa holders

are considered resident aliens once they meet the “substantial presence” test.

 

Substantial Presence Test

The Substantial Presence Test is a calculation that determines the resident or nonresident status of a foreign national for tax purposes in the United States.

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.

Example:

You were physically present in the U.S. on 120 days in each of the years 2021, 2022 and 2023. To determine if you meet the substantial presence test for 2023, count the full 120 days of presence in 2023, 40 days in 2022 (1/3 of 120), and 20 days in 2021 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2023.

However, there are exceptions to this rule. Do not count the following as days of presence in the U.S. for the substantial presence test:

  • Days you commute to work in the U.S. from a residence in Canada or Mexico if you regularly commute from Canada or Mexico.
  • Days you are in the U.S. for less than 24 hours, when you are in transit between two places outside the United States.
  • Days you are an exempt individual

 

Exempt Individual

Do not count days for which you are an exempt individual. The term "exempt individual" does not refer to someone exempt from U.S. tax, but to anyone in the following categories:

  • A teacher, researcher or trainee temporarily present in the U.S. under a "J" visa, who substantially complies with the requirements of the visa. J1 non-student visa holders may exempt 2 calendar years of presence for purposes of the substantial presence test.

 

  • A student temporarily present in the U.S. under an "F" or "J” visa, who substantially complies with the requirements of the visa.F1 and J1 student visa holders may exempt 5 calendar years of presence for purposes of the substantial presence test.