Nonresident Tax Information Session. Thursday, March 6, to 6 PM McConomy Auditorium, University Center

Transcription

1 Nonresident Tax Information Session Thursday, March 6, to 6 PM McConomy Auditorium, University Center

2 What we will cover. 1. Federal tax issues 2. Forms you receive and fill out 3. Determination of resident vs. nonresident for tax purposes 4. Answer general questions What we will not cover in detail 1. PA state taxes 2. Pittsburgh local taxes 3. Individual tax issues

3 Key concepts Filing taxes in US is a personal accounting The process is like a funnel 1. Start with gross income 2. Subtract itemized deductions (if any) 3. Subtract personal exemption ($3900) 4. Apply your tax treaty (if any) 5. Determine adjusted income 6. Figure out tax paid/owed (tax table) 7. Refund or amount due?

4 Federal Types of taxation Social Security & FICA Federal Income State 3.07% in PA Local 1.0% in Pittsburgh (for nonresidents on visas) No VAT tax

5 Definitions IRS Internal Revenue Service Students are here for fulltime study in F or J immigration status Scholars are in J status doing teaching or research. Scholars may study part-time but are not in the U.S. as fulltime students.

6 Definitions Which tax year? Calendar year 2013 Filing a tax return completing and mailing the required tax forms to the correct address Deadline for filing your 2013 tax return is April 15, 2014

7 Students - Resident or nonresident for federal tax purposes Did you enter the U.S. on or before December 31, 2008? YES? a "resident for tax purposes. Complete a 1040 or 1040EZ RESIDENT tax form. NO? a "NONRESIDENT for tax purposes. File the 8843, even with $0 income! File a tax return (1040NREZ or 1040NR) if you have taxable income.

8 Scholars - Resident or nonresident for federal tax purposes Was 2013 the 3rd year in the last 6 years that you were in the U.S? Even one day counts as one year. Arrive on or before 12/31/2011? Yes? "resident for tax purposes. Complete a 1040 or 1040EZ RESIDENT tax form. No? probably a non resident for tax purposes. Must file at least a 8843 form. May also need to file tax return--1040nrez or 1040NR.

9 Nonresident for federal tax purposes? Yes, I am. Then IF you have no taxable U.S. income or interest income only File 8843 only IF you have U.S. source income (other than interest) and NR-EZ or 1040NR and 3. PA-40 - State 4. EIT Local/City

10 Federal tax forms Form Number Name and Description 8843 Statement for Exempt Individuals and Individuals with a Medical Condition (form to show nonresident tax status) 1040NR-EZ and instructions 1040NR and instructions Publication 901 EZ means EASY U.S. Income Tax Form for Certain (most) Nonresident Aliens with no Dependents U.S. Nonresident Alien Income Tax Form U.S. Tax Treaties Publication EZ, 1040 and Instructions U.S. Tax Guide for Aliens Tax forms for those who are residents for tax purposes

11 Everybody files the is completed by all who are nonresidents for tax purposes F-1 and J-1 Students J-1 scholars, researchers and professors F-2 and J-2 Spouses/children NOTE: 8843 is not a tax return

12 Completing Form 8843

13 Completing Form 8843 Part II Teachers and Trainees = J-1 scholars, researchers and professors

14 Completing Form 8843 Part III Students= F-1 and J-1 Students

15 Completing Form 8843 Don t forget to SIGN your 8843!

16 Tax forms you received These forms report U.S. source income to you AND to the IRS Form Name Description W-2 Wages, salaries, tips and sometimes other income such as stipends 1042-S Treaty exempt income, non-taxable scholarships and awards 1099-INT 1099-DIV Earned interest Earned dividends

17 Can I use the easy EZ form? Most CMU students and J scholars will use the 1040NR-EZ 1040NR used by: Married people from: Canada South Korea Mexico People who have dividends/capital gains

18 Commonwealth of PA Taxation Residency defined differently: REV-611 Determining Residency for PA Personal Income Tax Purposes Only one tax form for all PA % tax withheld, paid by all Researchers (& some graduate students) meet the definition of resident for PA tax purposes pt/community/personal_income_tax/14692

19 Commonwealth of PA Taxation Scholarships, Fellowships and Stipends REV-758 Personal Income Taxes for College Students Common forms/publications used to file state taxes: PA-40 Book PA-40 form PA Schedule SP - Special Tax Forgiveness PA Schedule G-S - Calculation of Credit for Taxes Paid to Other States

20 Commonwealth of PA Taxation Special Tax Forgiveness A credit that allows eligible taxpayers to reduce all or part of PA tax liabilities For individual earnings of $8,750 or less Non Residents and Part Year Residents eligible but must include all income, earned in and outside of Pennsylvania, including scholarships, to determine eligibility Must attach a copy of Federal Return to Schedule SP to claim

21 City of Pittsburgh Taxation Residency defined differently: individuals on a visa pay a 1% local wage tax to the municipality where you work, not live All non-immigrants (students & scholars) are nonresidents for city tax purposes Include copy of your visa, I-94, I-20 or DS-2019 with tax return If you file for permanent residence, you are a resident for tax purposes from that point forward.

22 City of Pittsburgh Taxation Only one tax form for all 2013 Taxpayer Annual Local Earned Income Tax (EIT) Return ployerforms.html Choose "2013 Tax Forms, Allegheny County Central (70). Include a copy of your visa documents with the return and mail to the address at the top of the form. The PSD for nonresidents is and the nonresident tax rate is 1%.

23 Tax Questions/Resources? Use GLACIER Tax Prep for federal (IRS) forms (for CMU students/scholars) Access code sent by on March 3rd if you need the re-sent Call or visit websites of IRS, State or City if you have questions Refer to NEWS for more information/links

24 Tax Tips Know Tax Treaties - Pub 901. Mail in federal tax returns no efile available for nonresident federal returns Mail to: Department of the Treasury Internal Revenue Service Center Austin, TX

25 Tax Tips Mail or e-file, if possible, state & local returns Copy returns (prepared forms) and keep for future reference. Applications for U.S. permanent residency ( Green card ) may require previous tax returns.

26 Deadlines for Tax Forms Federal Tax / April 15, 2014 PA State Tax / April 15, 2014 Pgh City Tax / April 15, 2014