An F-1 student in the United States may be a nonresident alien for federal tax purposes, especially during the first years of U.S. presence. The tax treatment depends on the student’s history in the United States, whether days can be excluded from the substantial presence test, the type of income received, withholding, and any applicable income tax treaty.
How F-1 Status Affects Federal Tax Residency
F-1 is an immigration classification for academic students. Federal tax residency is determined under separate tax rules. A person can remain in valid F-1 status while being either a nonresident alien or a resident alien for U.S. federal income tax purposes.
For many F-1 students, the distinction is tied to the substantial presence test and the special rules that allow qualifying student days to be excluded from that calculation. The IRS discusses resident and nonresident alien classifications in Publication 519, U.S. Tax Guide for Aliens.
A change from nonresident alien to resident alien treatment can affect the return used, the scope of income subject to U.S. tax, FICA treatment, and some treaty positions. It does not by itself change the student’s F-1 immigration status.
The F-1 Student Rule for the Substantial Presence Test
The substantial presence test normally counts physical presence in the United States over the current year and the two preceding years. Qualifying students temporarily present under F, J, M, or Q status, however, can be treated as exempt individuals for this test. Days covered by that treatment are not counted toward substantial presence.
“Exempt individual” is a day-counting term. It does not mean that an F-1 student is exempt from U.S. income tax or from filing tax forms. Wages, taxable scholarship amounts, investment income, and other U.S.-source income can still be taxable while the student’s days are excluded from the residency calculation.
The IRS generally allows a student to use the student exempt-individual rule for up to five calendar years. The count is not limited to five academic years at the current school. Earlier calendar years in which the person was exempt as a student, teacher, or trainee under F, J, M, or Q status can affect the five-year limit.
After a person has been exempt as a student, teacher, or trainee for part of more than five calendar years, the student exemption generally ends unless the person can establish to the IRS that they do not intend to reside permanently in the United States and have substantially complied with the requirements of their nonimmigrant status. The IRS describes these rules on its Exempt Individual — Who Is a Student page.
Form 8843 for F-1 Students
Form 8843 is used to report the basis for excluding days of U.S. presence from the substantial presence test. A qualifying F-1 student who excludes days under the student exempt-individual rule generally must file a completed Form 8843.
If the student also files Form 1040-NR, Form 8843 is generally attached to the return. If the student is not required to file an income tax return, Form 8843 is filed separately according to the address and deadline in the current instructions. The IRS provides the form and instructions on its About Form 8843 page.
Having no U.S. income does not by itself remove this requirement. A qualifying F-1 student who is excluding days can still have a Form 8843 filing obligation even when no Form 1040-NR is required.
F-2 dependents can also have their own Form 8843 requirement when they are covered by the exempt-individual rules. Each qualifying family member files a separate form rather than being included on the F-1 student’s Form 8843.
When an F-1 Student May Need Form 1040-NR
Form 1040-NR is the federal income tax return used by nonresident alien individuals when a return is required. An F-1 student who remains a nonresident alien may need Form 1040-NR when the student has income subject to U.S. tax.
Common situations include taxable wages from U.S. employment, taxable scholarship or fellowship payments, certain investment income, or a need to report or reconcile treaty-related income. A student may also file Form 1040-NR to claim a refund of federal income tax that was overwithheld.
The IRS states that nonresident alien students temporarily present under F, J, M, or Q status are considered engaged in a U.S. trade or business, but they generally file Form 1040-NR only when they have income that is subject to U.S. tax or another filing reason applies. The current rules are available on the IRS page for taxation of nonresident aliens.
Tax Documents F-1 Students Commonly Receive or Use
| Form or Document | What It Relates To | How It May Affect an F-1 Student |
|---|---|---|
| Form 8843 | Days excluded from the substantial presence test | Generally required when a qualifying F-1 student excludes days under the student exempt-individual rule. |
| Form 1040-NR | Nonresident alien federal income tax return | Used when a nonresident F-1 student has a federal income tax return requirement or another reason to file. |
| Schedule OI | Other information attached to Form 1040-NR | Includes questions concerning nationality, immigration status, days of presence, treaty claims, and other nonresident information. |
| Form W-2 | Employment wages | Commonly issued for taxable wages from on-campus employment, CPT, OPT, or other authorized employment. |
| Form 1042-S | Certain payments to foreign persons | May report taxable scholarships, treaty-exempt compensation, or other income handled under nonresident withholding rules. |
| Form W-8BEN | Foreign status and certain treaty withholding claims | Usually provided to a withholding agent or payer rather than filed annually with the IRS as a tax return. |
| Form 8233 | Treaty exemption for certain compensation | May be provided to a payer when an applicable treaty allows an exemption from withholding on qualifying personal-services income. |
Wages from On-Campus Work, CPT, and OPT
F-1 students can receive wages from on-campus employment and, when properly authorized, from Curricular Practical Training (CPT), Optional Practical Training (OPT), or STEM OPT. USCIS describes the employment rules on its Students and Employment page.
For a nonresident F-1 student, compensation for services performed in the United States is generally U.S.-source income and is commonly treated as effectively connected income. The employer normally reports taxable employee wages on Form W-2.
Federal income tax may be withheld from the wages. A treaty can sometimes exempt part or all of qualifying compensation from federal income tax, but employment authorization itself does not create a tax exemption.
Scholarships and Fellowships
Scholarship and fellowship payments require a different analysis from ordinary wages. A qualified scholarship used by a degree candidate for required tuition, fees, books, supplies, and equipment can generally be excluded from gross income when the federal requirements are met. Amounts used for room, board, travel, and other nonqualified expenses can be taxable.
For a nonresident alien temporarily present under F, J, M, or Q status, the taxable portion of certain U.S.-source noncompensatory scholarship or fellowship payments is generally subject to 14% withholding rather than the normal 30% nonresident withholding rate. An applicable treaty may reduce the rate further or provide an exemption.
A scholarship payment that represents compensation for services is treated differently from a noncompensatory scholarship. The IRS explains these withholding rules on its page for scholarships, fellowships, and grants paid to nonresident aliens.
Form W-2 and Form 1042-S Can Both Appear
An F-1 student can receive both Form W-2 and Form 1042-S for the same tax year. The forms do not serve the same purpose.
Form W-2 usually reports taxable employment wages and payroll withholding. Form 1042-S can report taxable scholarship payments, treaty-exempt compensation, or other amounts subject to the reporting rules for foreign persons. A treaty exemption can therefore cause part of a student’s compensation to appear on Form 1042-S while another portion appears on Form W-2.
The amounts should be compared with payroll and university records before the federal return is prepared. Receiving Form 1042-S does not automatically mean additional tax is due, and receiving a W-2 does not determine the student’s federal tax residency.
FDAP and ECI for a Nonresident F-1 Student
Two income classifications can appear on Form 1040-NR. ECI means effectively connected income. Wages for services performed in the United States are a common example for an F-1 student. ECI is generally taxed on a net basis at graduated rates after deductions allowed under the nonresident rules.
FDAP means fixed, determinable, annual, or periodical income. U.S.-source FDAP income that is not effectively connected with a U.S. trade or business can include dividends, rents, royalties, and certain other payments. It is generally taxed on the gross amount at 30% unless a treaty or another federal rule provides a lower rate or exemption.
Income that is not effectively connected can be reported on Schedule NEC (Form 1040-NR) when the filing rules require it. Scholarship and fellowship payments have their own rules and should not be classified merely by looking at the payment label.
Tax Treaties and F-1 Students
Some U.S. income tax treaties contain provisions specifically affecting students or other temporary visitors. Depending on the treaty, qualifying wages, scholarships, fellowships, grants, or other income may receive an exemption or reduced tax rate.
The treaty applicable to a student depends on treaty residence and the wording of the particular article, not simply citizenship. Student provisions can contain limits based on the type of income, amount, purpose of the visit, or period spent in the United States.
For qualifying compensation for personal services, Form 8233 may be used to claim exemption from withholding when permitted by the treaty. For certain other payments, Form W-8BEN may be used to document foreign status and claim an applicable treaty rate. The IRS explains the general procedures on its Claiming Tax Treaty Benefits page.
Social Security and Medicare Taxes on F-1 Wages
F-1 students who remain nonresident aliens for federal tax purposes are generally exempt from Social Security and Medicare taxes on wages for services that are allowed by USCIS and are performed to carry out the purpose for which they were admitted to the United States.
This can apply to qualifying on-campus employment, CPT, OPT, and other authorized employment when the requirements are met. The IRS discusses the rule on its Foreign Student Liability for Social Security and Medicare Taxes page.
Once an F-1 student becomes a resident alien for federal tax purposes, the nonresident F-1 exemption from Social Security and Medicare taxes generally no longer applies. A separate student FICA exception can still apply to qualifying employment by a school, college, or university when the student meets that exception’s requirements.
If FICA Tax Was Withheld in Error
A nonresident F-1 student who believes Social Security or Medicare tax was withheld from qualifying exempt wages should generally request a refund from the employer first. If the employer does not provide a full refund, the IRS permits a refund claim using Form 843 with Form 8316 and supporting documentation when the requirements are met.
What Changes After the Five-Calendar-Year Student Period
The end of the normal five-calendar-year student exemption does not automatically make an F-1 student a resident alien on January 1 of the next year. Instead, the student’s days generally begin counting toward the substantial presence test unless an extended student exception applies.
If the substantial presence test is then met, the student can become a resident alien for federal tax purposes. That can change the federal return from Form 1040-NR to Form 1040 and generally brings worldwide income within the U.S. federal income tax system.
The five-calendar-year count can also be affected by earlier time in the United States under F, J, M, or Q status. Students who previously studied, trained, taught, or participated in an exchange program in the United States should include that earlier history when reviewing the exempt-individual limit.
State Filing Can Still Apply to an F-1 Student
Federal nonresident alien status does not control state income tax residency. States use their own rules for residence, domicile, part-year residency, and income sourced within the state.
An F-1 student can therefore file Form 1040-NR federally and still have a state income tax return. Wages earned while working in a state are a common reason to check that state’s filing rules. Moving between states during the year can create another issue.
California, for example, taxes nonresidents on taxable income from California sources under its part-year resident and nonresident rules. New York separately applies its own rules to New York-source income, described in the state’s nonresident filing information.
F-1 Tax Situations That Produce Different Filing Results
| Situation | Tax Issue to Check |
|---|---|
| F-1 student with no U.S. income | Form 1040-NR may not be required, but Form 8843 generally remains required when qualifying student days are excluded. |
| F-1 student with on-campus wages | Form W-2, Form 1040-NR, Form 8843, possible treaty treatment, and FICA exemption may need review. |
| F-1 student working under CPT or OPT | U.S.-source wages, Form W-2, Form 1040-NR, federal withholding, state tax, treaty rules, and FICA treatment can apply. |
| Student receives taxable scholarship support | Qualified versus taxable amounts, Form 1042-S, the 14% scholarship withholding rule, and treaty treatment may be relevant. |
| Student receives both W-2 and Form 1042-S | Each form should be matched to the income it reports; both may be needed when preparing Form 1040-NR. |
| Student has passed the normal five-calendar-year exempt-individual limit | Days may begin counting toward the substantial presence test, potentially changing the student to resident alien status. |
| Social Security and Medicare taxes were withheld from qualifying exempt wages | The student can first request correction from the employer and may use the IRS refund procedure if the employer does not provide a full refund. |
Educational Note
F-1 tax treatment can change with prior U.S. presence, the number of calendar years covered by the student exemption, employment type, scholarship terms, treaty eligibility, and state law. This information does not replace the instructions for the tax year being filed or advice based on an individual student’s records.
FAQ
Does an F-1 Student With No Income File Form 8843?
Generally, yes, when the student qualifies as an exempt individual and excludes days of U.S. presence from the substantial presence test. Form 8843 can be required even when the student has no income and does not file Form 1040-NR.
How Long Can an F-1 Student Exclude Days From the Substantial Presence Test?
The normal student limit is five calendar years. Earlier calendar years in which the person was exempt as a student, teacher, or trainee under F, J, M, or Q status can count toward the limit. An exception may be available after five years when the student satisfies the additional IRS requirements.
Does the Sixth Year Automatically Make an F-1 Student a Resident Alien?
No. After the normal student exempt-individual period ends, qualifying U.S. days generally begin counting toward the substantial presence test. The student becomes a resident alien under that test only if its requirements are met, unless another rule changes the result.
Can an F-1 Student Receive Both Form W-2 and Form 1042-S?
Yes. Form W-2 usually reports taxable employment wages. Form 1042-S can report treaty-exempt compensation, taxable scholarship payments, or other amounts reported under the foreign-person withholding rules.
Are CPT and OPT Wages Subject to U.S. Income Tax?
Wages for CPT or OPT services performed in the United States are generally U.S.-source income. A nonresident F-1 student can therefore owe federal income tax on those wages unless an applicable treaty or another tax rule provides different treatment.
Do Nonresident F-1 Students Pay Social Security and Medicare Taxes?
Qualifying nonresident F-1 students are generally exempt from Social Security and Medicare taxes on wages for employment allowed by USCIS and connected with the purpose of their U.S. admission. The visa-based exemption generally ends when the student becomes a resident alien, although a separate student FICA exception can apply to some school employment.
What Can an F-1 Student Do if FICA Tax Was Withheld by Mistake?
The student should generally ask the employer to refund incorrectly withheld Social Security and Medicare taxes first. If the employer does not provide a full refund, an eligible student can request a refund from the IRS using Form 843 and Form 8316 with the required supporting records.
Can an F-1 Student Owe State Income Tax While Filing Form 1040-NR Federally?
Yes. Federal nonresident alien classification and state income tax residency are separate. A student may have a state filing requirement because of wages, state-source income, residence, or a move during the year.
Resources Used
- IRS Publication 519 — U.S. Tax Guide for Aliens — Covers federal residency, nonresident alien taxation, student rules, withholding, and filing requirements.
- IRS — Substantial Presence Test — Explains the federal presence calculation and days that can be excluded.
- IRS — Exempt Individual: Who Is a Student — Explains the student exempt-individual rules, the five-calendar-year limit, and Form 8843 requirements.
- IRS — About Form 8843 — Provides the form used by qualifying students and other individuals to report excluded days of presence.
- IRS — About Form 1040-NR — Provides the federal income tax return used by nonresident alien individuals when applicable.
- IRS — Taxation of Nonresident Aliens — Explains filing rules and income taxation for nonresident students and other nonresident aliens.
- IRS — Foreign Students, Scholars, Teachers, Researchers, and Exchange Visitors — Provides tax information for students and other temporary visitors.
- IRS — Withholding on Scholarships, Fellowships, and Grants Paid to Nonresident Aliens — Explains qualified and taxable scholarship treatment and the special withholding rate for qualifying F, J, M, and Q recipients.
- IRS — About Form 1042-S — Describes reporting of certain U.S.-source payments to foreign persons.
- IRS — Claiming Tax Treaty Benefits — Explains treaty claims and withholding documentation for eligible foreign individuals.
- IRS — Instructions for Form 8233 — Explains treaty withholding claims involving certain compensation and scholarship or fellowship income.
- IRS — Foreign Student Liability for Social Security and Medicare Taxes — Explains FICA treatment for F-1 students and the effect of resident alien status.
- IRS — Social Security Tax, Medicare Tax and Self-Employment — Explains the refund procedure when Social Security or Medicare taxes were withheld in error.
- USCIS — Students and Employment — Describes F-1 employment options including on-campus work, CPT, OPT, and STEM OPT.
- California Franchise Tax Board — Part-Year Resident and Nonresident — Shows how state residency and state-source income rules can differ from federal nonresident alien treatment.
- New York State Tax Department — Nonresident Filing FAQs — Explains New York filing issues involving nonresidents and New York-source income.