Every person in the US, both resident and non-resident, is allowed to receive funding for tuition without paying taxes, but any grant/scholarship funding that pays for housing and food is taxable for all persons in the US, regardless of where the funding came from.
The taxable (nonqualified) portion of a scholarship or fellowship paid to an NRA in F-1, J-1, M-1, Q-1, or Q-2 is subject to Federal income tax withholding at the rate of 14%. This will be roughly $2500-$4000 per year, depending on the scholarship level. This number is also reflected on page 2 of your Financial Aid Award Letter.
On a student bill, the 14% taxation is charged as "Tax Withholding”. This money is billed to you each fall and then paid to the IRS by the college’s Office of Tax and Compliance. The same process will happen again in the spring, with a charge of “Tax Withholding” on your student account that is paid to the IRS by the college’s Office of Tax and Compliance.
Income tax returns are forms submitted by individual and joint taxpayers to federal and state taxing authorities to report various types of income and to calculate tax liability. In many countries where our students come from, taxes are deducted automatically from income with taxpayers not being responsible for any forms. In the United States, it is each taxpayer’s responsibility to complete the appropriate tax forms and provide those to the government each spring.
In the US, we file federal income tax returns during the first part of the calendar year to report our earnings and determine our taxes with the Internal Revenue Service (IRS) for the previous year. For example, in 2021, those required to file will complete and submit a 2020 income tax return. In Colorado, we also file a state income tax return with the State of Colorado’s Department of Revenue to determine our state tax bill.
All international students and scholars who have been in the U.S. for any portion (even 1 day) of the calendar year must file a federal form with the Internal Revenue Service, with details on your US-sourced income or to explain how your presence in the US does not require taxation as a US resident. An income tax return or Form 8843, if no US-sourced income has been earned, will satisfy these requirements. This is true even for students who come from countries that have tax treaties with the United States.
Many countries have treaties with the United States that reduce or eliminate the taxes paid by their citizens who are in the U.S. To qualify for treaty exemption, you must be a citizen or a permanent resident (generally, a noncitizen who files a resident income tax return) of the "treaty country," and the type of payment must be exempt under that specific treaty. In addition, the IRS requires a U.S. federal identification number, evidence of nonresident alien status (i.e., the substantial presence test), evidence of proper work authorization (i.e., visa), and a properly completed IRS "treaty exemption form" (i.e., Form 8233 for wages, fees, honoraria). Information on tax treaties is available from the IRS (Pub.901, U.S. Tax Treaties).
A resident for tax purposes is a person who is a U.S. citizen or a foreign national who meets either the “green card” or “substantial presence” test as described in IRS Publication 519, U.S. Tax Guide for Aliens.
A non-resident for tax purposes is a person who is not a U.S. citizen and who does not meet either the “green card” or the “substantial presence” test as described in IRS Publication 519, U.S. Tax Guide for Aliens.
A foreign national with non-immigrant visa status may be considered a resident alien for tax purposes as soon as he/she meets the “substantial presence” test for a calendar year (January 1 to December 31). To meet this test, the person must be physically present in the U.S. on at least:
Exceptions to the time counted toward the Substantial Presence Test for students and scholars in F-1 and J-1 status (and their dependents):
For an international student, the IRS requires that the college send the tax payment for each student who has grants exceeding tuition and fees and the student must pay the college directly. This is a government requirement and not something that CC can change. In the spring, you will file your tax return and determine if you receive any of those funds as a refund or if you owe additional funds.
The simplest explanation is that state and federal taxes are different and are sent to different offices, one to the state government and one to the IRS. Federal taxes are required to be paid each semester. The state of Colorado allows all residents who live in the state to pay their taxes at the end of the year directly to the state.
Colorado College does not report payments to the home country, but it appears that IRS reports income that is exempt under a treaty to the home country. The Embassy or consulate of your home nation should be able to provide you with more information about this process if you have questions.
The college utilizes Sprintax to assist in managing tax treaties and applicable laws. You are required to submit documentation through Sprintax in order for the College to determine how you will benefit from any applicable tax treaty. If you have received grants that exceed tuition and fees, any research grants or awards, and/ or have been employed in a campus job you will receive a tax form (Form 1042S or W-2 depending on treaty status and Sprintax completion) from the College and you are required to submit a tax return at the end of each calendar year.
Tax advising is a specialized skill only really appropriate to tax specialists. For this reason, the college is not able to provide tax filing advice, but you will be provided access to tax filing software through Sprintax Tax Prep. Sprintax has a wide range of features from video guides to chat options to help you get questions answered as you work on your tax preparation. In addition, you may bring your questions to group workshops provided in March and April of each year. If you have more complex needs, you may hire a tax accountant off-campus that will charge you a fee for the service. Please note, international students are unable to file tax forms electronically, Sprintax is a software designed to help you generate your federal tax forms.
No. There is no resource on campus to pay the tax responsibility you will have. You must plan for this in your budgeting process.
A tax return must be completed in Sprin tax, printed, and postmarked (mailed at a post office) by the end of the business day April 15 each year. If April 15 falls on a weekend or holiday, it must be postmarked by the next business day.
No, ISSS staff are not tax experts and cannot provide tax advice. To assist you, the college offers you access to Sprintax. Sprintax is a user-friendly tax preparation software created specifically for international students and scholars. Sprintax will help you navigate U.S. federal tax forms, residency status, tax treaties, exemptions, and deductions.