Information for Nonresidents
Most students in F-1 and J-1 immigration status may be employed for up to 20 hours per week when school is in session and up to full-time during authorized vacation periods. Employment is limited to on-campus jobs only, without additional authorization from either the U.S. Immigration and Naturalization Service (BCIS) or a staff member of the International Center.
Employment of postdoctoral researchers and others in J-1 non-student status is also common. Persons in J-1 non-student status are generally eligible for full-time employment at MU and may be in benefit-eligible positions.
NRA Hiring Procedures at MU
When a department decides to hire an NRA, all routine "new hire" paperwork should be completed with no delay. The W-4 must be completed with name, address, SSN and a signature and date. (The figures on the W-4 are irrelevant to the "new hire" process for an NRA.) There is no requirement to have an SSN at the time of hire for a newly-arrived NRA.
The new employee must e-mail the MU Nonresident Alien Taxation Specialist at firstname.lastname@example.org to schedule a "tax assessment" appointment. This appointment cannot take place until an employee has a Social Security Number (SSN). Please wait to email for an appointment until the SSN has been issued. The e-mail subject line will read, "New employee" and the body of the message should include the employee's full name and several suggested times and days the employee will be available for an appointment. The employee will receive an e-mail reply with the scheduled appointment time, directions to the office, and instructions about what to bring to the appointment.
Scholarships and Prize Awards
Scholarships made to NRA students will be taxable income for any portions of the scholarship greater than the student's educational expenses or any amount provided directly to the student by cash or check. Educational expenses include resident and nonresident fees, student activity fees, information technology fees, and any additional fees required by an academic department. The portion of scholarship or prize award determined to be taxable will generally be withheld at a rate of 14%. A tax treaty may reduce or eliminate the required withholding on taxable scholarships.
Nonresidents with taxable scholarship income will be contacted by the Nonresident Alien Tax Office.
Filing Tax Returns
Each year between mid-January and mid-April, persons who have income in the United States (including international students and researchers) are required to file income tax returns. Tax returns provide an opportunity to apply for money that was withheld in amounts greater than the actual tax liability to be refunded to the applicant. Nonresidents will generally use either Form 1040NR or Form 1040NR-EZ to file their tax return with the IRS.
Form W-2: All employees who have taxable income from employment in the United States will receive a Form W-2, which is a statement of earnings. This form may be available through the University MyHR system as long as "consent" has been provided in the MyHR system. If consent has not been provided, the W-2 will be sent by mail through the U.S. Postal Service to the last known mailing address. The Form W-2 is essential for filing a tax return for persons with taxable employment income.
If a nonresident alien was employed at another U.S. location during the tax year, it is important to make sure that the other employer has a current address so that the Form W-2 from that employer is received.
Form 1042-S: All nonresident aliens who have scholarships that are greater than the amount of their fees or have tax treaty exempt wages will receive a Form 1042-S, which is a statement of that type of income received during the year. Persons who have only a TA or RA fee waiver or a scholarship less than their semester fee charges will not be issued a Form 1042-S. The NRA will receive this Form 1042-S before March 15. Therefore, persons with the above types of income may not file a tax return until after they have received Form 1042-S.
The United States currently has tax treaties with more than 60 countries. These treaties are designed to decrease the likelihood that the NRA will be taxed on the same income both in the U.S. and the country of tax residency. Treaty benefits will not be honored unless appropriate treaty forms are completed and on file in Payroll.
Tax treaty benefits for students receiving compensation for employment are generally limited to a specific amount of income for each tax year (usually between $2,000 and $5,000 per year). Most treaty benefits will end once the student becomes a resident alien for tax purposes, so most treaty benefits will last no more than five years, with only a few exceptions.
Tax treaty benefits for scholarship income may also be available for students, even if there is not a corresponding treaty for compensatory income.
Tax treaties for non-students are generally not limited to a specific amount of income, but are limited by a specific number of years. In some cases, if a non-student remains in the U.S. beyond the period covered by the treaty (usually two years from the date of entry), a "retroactive clause" in the treaty requires payment of all taxes that were previously exempt. It is, therefore, important to monitor these dates and treaty benefits carefully.
Recipients of a research grant may be eligible for tax treaty benefits on the maintenance allowance provided in the grant, and should initiate a tax review immediately upon receipt of the grant.