International Tax Compliance

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Tax Basics for International Students and Scholars

For tax purposes in the United States, individuals can be classified in one of four groups:

  • U.S. Citizen,
  • Permanent Resident Alien,
  • Resident Alien for U.S. tax purposes, or
  • Nonresident Alien for U.S. tax purposes.

To determine tax residency, non-U.S. citizens (excluding Permanent Residents, DACA recipients, and asylees) are required to use GLACIER, the university’s online tax compliance software, which collects information about an individual's immigration status, visa, country of residency, and history of presence in the United States. To properly pay and tax individuals, the following determinations must be made:

  • residency tax status (Nonresident or Resident Alien for U.S. tax purposes),
  • eligibility to claim a tax treaty exemption (based on country of residence) and/or
  • nonresident OASDI and Medicare tax exemption.

Upon completion of the required data within GLACIER, all system-generated forms and copies of immigration documents must be signed and submitted to the NRA Tax Coordinator in order to withhold the appropriate taxes from any payments issued.

If you are working on campus, please log in to GLACIER to verify that your information is correct or contact us NRAtax@uark.edu to be set up.

Nonqualified Scholarship/Fellowship is taxable at 14% for nonresidents for U.S. tax purposes in F, J, M, or Q status. Parking permits, housing, and meals are examples of nonqualified charges.

1040-NR, U.S. Nonresident Alien Income Tax Return must be filed by April 15.  

Nonresidents may use GLACIER Tax Prep (GTP), available through GLACIER, to prepare 1040-NR.  Users of GLACIER Tax Prep may attend sessions provided by Arctic International tax professionals for free assistance with GTP.

Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition

Form 8843 is an informational statement used to explain why certain days of physical presence in the United States may be excluded when determining U.S. tax residency under the substantial presence test. It is not an income tax return.

Generally, nonresident aliens who were present in the United States for at least one day during the tax year in F-1, F-2, J-1, J-2, M-1, M-2, Q-1, or Q-2 immigration status must file Form 8843. This filing requirement generally applies even if the individual received no U.S. income or is not required to file Form 1040-NR.

Each individual, including a spouse, dependent, or minor child, must complete a separate Form 8843.

Individuals filing Form 1040-NR should include Form 8843 with their federal income tax return. Individuals who are not required to file an income tax return must submit Form 8843 separately to the IRS by the applicable filing deadline.

Individuals using GLACIER Tax Prep do not need to prepare Form 8843 separately. GLACIER Tax Prep will prepare the applicable Form 8843 based on the information entered into the software and provide filing instructions.

1042-S, Foreign Person’s U.S. Source Income Subject to Withholding

The Internal Revenue Service (IRS) requires 1042-S Forms be sent to eligible individuals no later than March 15 of each year.

A nonresident employee who earned wages that were exempt from federal withholding taxes due to a tax treaty will receive a Form 1042-S. Nonresident employees will receive both a 1042-S and W-2 Form if wages earned are above the tax treaty limit.

1042-S Forms will also be issued for any non-resident individuals that were paid scholarships, fellowships, royalties, and/or cash prizes during the tax year.

1098-T, Tuition Statement

Generally, a nonresident is not eligible for a 1098-T.

W-2, Wage and Tax statement

W-2s to be mailed on or made available electronically to employees by January 31st.

Please ensure your address is up to date in Workday before December 31st each year.

 If you have any questions, please email NRAtax@uark.edu or call 479-718-1819 for assistance.

 

Tax treaty benefits for non-student compensation are typically not limited to a dollar amount, but are limited by a specific number of years. Some countries have retroactive clauses attached to treaties, resulting in the treaty benefit being lost if the treaty time limit is exceeded. Before deciding to abide by the treaty, the limits of the treaty should be carefully weighed against the personal time committed to the employer.