Table of Contents

• International Persons & Identification Numbers
• IRS Tax Forms & Terminology
• Tax Withholding & Reporting for Wages, Fellowships, & Scholarships
• Tax Withholding & Reporting for Other Payments

This section presents basic information on identification numbers, tax forms and terminology, and tax withholding as related to international persons working in the US. As with any tax situation, questions and answers are complex.

Please note that the term "international person" is used throughout this section and the Payroll Section. This term is meant to cover individuals arriving in the U.S. on a nonpermanent basis. The visit may be brief, or may extend over a number of years.

If you have specific questions, please contact the Johns Hopkins University Tax Office.

International Persons & Identification Numbers

There are three possible identification numbers that an international person may have:

• University-assigned Identification Number
• Social Security Number (SSN)
• Individual Taxpayer Identification Number (ITIN)
  

• University-assigned Identification Number
  • Generally, the first identification number an international person receives is a university-assigned number. International students receive a university-assigned identification number during the admissions process. University-assigned numbers are limited to the number series 822-xx-xxxx and 899-xx-xxxx.
  • Beware! An international person's university-assigned identification number may "look" like a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) but a valid SSN or ITIN must be applied for and received.
  • When an international person receives a salary or a wage payment, the international person must obtain a Social Security Number (SSN) or if the international person receives a fellowship or scholarship, they must obtain an Individual Taxpayer Identification Number (ITIN). The International Services Offices assist international persons in obtaining the appropriate identification number.
• Social Security Number (SSN)
  • Social Security Numbers are issued by the Social Security Administration. An SSN is required for every person, including any international person, who is paid a U.S. salary or a wage regardless of the period of employment. If a salary or a wage is paid to an individual without a valid SSN, the University may be subject to penalties. Therefore, the university staff member responsible for completing the ISR for a new hire needs to determine if the new hire has a valid SSN. Generally, a valid SSN is a 9-digit number beginning with a number other than 8 or 9.
  • An international person who is paid a salary or wage must obtain an SSN to replace the university-assigned identification number. The person should visit the International Services Office on their campus for information and assistance on how to file for an SSN. Once an international person receives an SSN, the number must be reported to their department, to HR Shared Services, to the international office and to the registrar's office.
• Individual Taxpayer Identification Number (ITIN)
  • ITINs are issued by the Internal Revenue Service (IRS). An international person who receives a fellowship and/or scholarship but is not paid a salary or wage must apply for and receive an ITIN to replace the university-assigned identification number. The IRS uses the number series 9xx-xx-xxxx.
  • Although ITINs are issued by the IRS, the International Services Offices assist international persons with the application (IRS Form W-7). The International Services Offices submit the form on behalf of the individual. Once an international services office receives an ITIN, the number is reported to the individual, to HR Shared Services, and to the registrar's office.
  • Beware: If an international person with an ITIN begins receiving a salary or wage, the ITIN must be formally rescinded and the international person must obtain an SSN. The International Services Offices can assist with this process.

IRS Tax Forms and Terminology

Do International Persons File Tax Returns? Yes! International persons with U.S. income must file federal and state tax returns each year. See details discussed below in Tax Withholding & Reporting for Wages, Fellowships, & Scholarships and Tax Witholding & Reporting for Other Payments.

In order to understand the upcoming sections on taxes, the following terms require definition:

Terminology

• Resident Alien (for tax purposes): An international person who meets one of the two tests
  • the green card test
  • the substantial presence test
    • The substantial presence test is met if an individual is present in the U.S. more than 183 days during a three year period that includes the current calendar year and the preceding two years. "Presence in the U.S." excludes days during which an individual is classified as an "exempt individual" - "J" and "F" visa holders are "exempt individuals" for a period of time when they arrive (see IRS Publication 519, U.S. Tax Guide for Aliens).
• Nonresident Alien (for tax purposes): An international person who does not meet the test for a resident alien. Most persons on an F-1 or J-1 visa who recently arrived in the US are nonresident aliens for tax purposes.
  
  
• U.S. Source Income:Income paid to a nonresident alien by a U.S. employer or grantor while the nonresident alien is living and working in the U.S.
  
  
• Non-U.S. Source Income:Income received by a nonresident alien, for services performed outside of the U.S., or a scholarship/fellowship/grant paid by a non-U.S. payer (usually a foreign government or corporation). See IRS Publication 519 for sourcing rules. Non-U.S. source income is not taxable income for a nonresident alien.
  
  
• Worldwide Income:Worldwide income includes all income from all sources. Resident aliens, like U.S. citizens, are required to report this income on a Form 1040 or its equivalent.
  
  
• FICA Tax:Tax that funds the Social Security and Medicare programs. Generally, individuals classified as a nonresident alien for tax purposes with either a J-1 or F-1 visa, are not subject to FICA. Generally, resident aliens are subject to this tax.

Exemption Forms

• Form W-8BEN: Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding - A federal form completed by international persons to claim exemption from federal tax withholding for a nonresident's scholarship and fellowship grant payments covered by a tax treaty. A form is required to be completed each calendar year.
  
  
• Form 8233: Exemption From Withholding on Compensation for Independent (and certain Dependent) Personal Services of a Nonresident Alien Individual - A federal form completed by international persons to claim exemption from federal tax withholding for all or part of the nonresident's compensation for services covered by a tax treaty benefit from federal tax withholding. A form is required to be completed each calendar year.
  
  
• Form W-4: Employee's Withholding Allowance Certificate - a federal form completed by resident aliens and any nonresident alien whose payments are not covered by a tax treaty. There are specific instructions for nonresidents completing this form as to their status and number of personal allowances claimed; they cannot claim "exempt."
  
  
• Form MW-507: Employee's Maryland Withholding Exemption Certificate - the form for international persons living in Maryland. Typically, nonresident aliens are not exempt from state income tax and are restricted in the number of personal allowances claimed on this form.

Annual Forms and Tax Returns

• Form 1042-S: Foreign Person's U.S. Source Income Subject to Withholding - An IRS form issued by the university to nonresident aliens that summarizes certain payments made to or on behalf of nonresident aliens during a calendar year and any taxes withheld. Amounts reported include salary or wages exempt under a tax treaty, fellowship payments, and scholarships.
  
  
• Form W-2: Wage and Tax Statement - A tax form issued by the university that summarizes salary and wages paid and taxes withheld for the calendar year except for wages exempt under a tax treaty (see Form 1042-S). Also known as a Wages and Tax Statement.
  
  
• Form 1040NR or 1040NR-EZ:U.S. Nonresident Alien Income Tax Return - A federal tax return filed by an individual who was classified as a nonresident alien during all or part of a tax year.
  
  
• MD Form 502: The Maryland tax return form.
• Note: International persons in Maryland use Form 502 not Form 502NR.

Tax Withholding & Reporting for Wages, Fellowships, & Scholarships

For tax purposes, an international person is categorized one of two ways:

• Nonresident Alien (for tax purposes)
• Resident Alien (for tax purposes)

The process for determining whether an international person is a nonresident or resident alien for tax purposes is complex. It is determined based on the person's immigration status (visa), purpose of the current visit, the person's current length of stay in the U.S., and prior visits or other prior primary purposes, if any. Most international persons are classified as nonresident aliens during the first part of a visit; this classification remains in effect for various lengths of time depending on visa type and purpose of the visit.

An international person interested in determining resident status for tax purposes should refer to IRS Publication 519.

Nonresident Alien - Tax Withholding and Reporting

• Basic information regarding the taxation of a nonresident alien

  • Salary and wages are exempt from FICA taxes.
  • Salary and wages and fellowship payments may be exempt from federal taxes if the nonresident alien's country of residence (See the Payroll and I-9 section for definition of country of residence) has a tax treaty with the U.S. For more information on tax treaties, refer to IRS Publication 901.
  • Salary and wages and fellowship payments are generally subject to state taxes. The University withholds state taxes from wage and fellowship payments made to nonresident aliens.
  • Scholarships for qualifying expenses (as defined by the IRS) are exempt from federal and state taxes.

• Nonresident alien - Procedures for Tax Filing

  • At time of hire and each calendar year, the nonresident alien should complete a Form 8233 or a Form W-8BEN if the income or payment is covered by a tax treaty.
  • Nonresident aliens whose country of residence does not have a tax treaty with the U.S. should complete a Form W-4.
  • NOTE: When completing the Form W-4, nonresident aliens must file single status, claim only one personal exemption, and write in "NONRESIDENT ALIEN" on line 6. They may not declare themselves "EXEMPT" from federal tax. [Exception: nonresident aliens from Canada, Mexico, South Korea, India.] Click here for an example.
  • Nonresident aliens should also complete the appropriate state withholding form. (MW-507 for Maryland)
  • After calendar year end, the nonresident alien will receive a Form 1042-S and/or a Form W-2. Both forms summarize the wages paid to or made on behalf of the nonresident alien for the calendar year (see Part above.)
  • Annually, the nonresident alien must file the federal Form 1040NR or Form 1040NR-EZ, Form 8843, and the appropriate state income tax forms.

Resident Alien - Tax Withholding and Reporting

• Basic information regarding the taxation of a resident alien

  • Salary and wages are subject to FICA taxes unless they are a full-time student.
  • Salary and wages are subject to federal and state taxes.
  • Fellowship payments are subject to federal and state taxes; however, the university does not withhold federal and state taxes from fellowship payments made to a resident alien. As a result, the resident alien may need to pay estimated federal and state taxes. (Letters are sent by payroll notifying them of the possible need to file estimated quarterly taxes.)
  • Scholarships for qualifying expenses (as defined by the IRS) are exempt from federal and state taxes.

• Resident alien - Procedures for Tax Filing

  • At time of hire and each calendar year, the resident alien should complete a Form W-4 and the appropriate state form (MW-507 for Maryland).
  • After calendar year end, the resident alien will receive a Form W-2 for earned wages.
  • Annually, the resident alien should file the federal Form 1040, 1040A or 1040-EZ. For state taxes, they should file the appropriate state income tax forms.

Tax Withholding & Reporting for Other Payments

• Independent Contractors

  • No FICA taxes are withheld from payments to independent contractors.
  • Federal income tax should be withheld at a 30% rate unless there is a tax treaty between the U.S. and the nonresident alien's country of residence. If a tax treaty exists, the international person must file Form 8233 and submit that form to the organization.
  • After calendar year end, the nonresident alien will receive a Form 1042-S which summarize the payments for the calendar year.
  • Note: International persons may not be eligible to work as an independent contractor; contact the international services office before engaging the person.

• Visiting Lecturers

  • Travel expenses: payments to or on behalf of nonresident aliens who are visiting lecturers for travel will not be subject to tax withholding and reporting if payments are made under the accountable plan rules. University Non-Employee Travel & Business Expense Report (located in SAP TRIP) provides adequate documentation meeting the accountable plan rules. See Account Payable Travel and Business Expense Policies and Procedures for more details.
  • Honorarium: nonresident aliens who are visiting lecturers may not be eligible to receive an honorarium, contact the international services office. If the person is eligible to be paid an honorarium, the payment may be exempt under a tax treaty; Form 8233 must be completed to claim exemption under a treaty. Contact the University Tax Office concerning possible treaty benefits.

• Grants Received From Outside the U.S.

  • Occasionally fellowship or scholarship grants are funded from foreign countries and paid to nonresident aliens. These payments are not subject to federal tax withholding or state tax withholding. Such payments are not reportable on Form 1042-S or taxable as U.S. source income. Contact the University Tax Office regarding grants from outside the US to be paid to nonresident aliens.

• Services Performed Outside the U.S.

  • Occasionally a nonresident alien will receive payment while outside the US. Payments that are made to a non resident alien performing services or for a fellowship while outside the U.S. are not subject to federal or state income tax withholding and are not reported on either a W-2 or Form 1042-S. (This exclusion only applies to the services performed in a foreign country by individuals who are not citizens or residents of the U.S.) Contact the University Tax Office regarding payments to nonresident aliens while outside the US.