Tax Status & Withholding rate
W4 form
W2 form
How to file
Refund of Social Security tax withheld

Disclaimer: The following information regarding tax issues is meant to provide general guidelines only. Tax law is constantly changing and is subject to interpretation. For more specific and up-dated information, you should contact the IRS, a tax accountant, or a tax attorney.

• are you taxed as a nonresident or resident alien?
• are you covered by an international tax treaty?

Once you have determined your tax status, you can figure out the withholding rate.

Nonresident alien J-1 visa trainees are exempt from FICA (Social Security Tax) and FUTA (Unemployment) taxes. Please see the W4 section under the Trainee Payroll & taxes section to determine the withholding rate from your paycheck.

Resident alien J-1 visa trainees should have FICA and FUTA taxes withheld, unless tax treaties apply, and are taxed at the same graduated rate as citizens. All wages, stipends, and pocket money are subject to Federal tax in the same manner as US citizens. Fill out the 1040EZ form.

If you do not fill out the W4 form out properly, you may be taxed too much, or too little. If you are taxed too little, you will owe money to the U.S. government, and if you do not pay it, your future visa status could be in jeopardy.

Note that as a non-resident alien, special instructions apply for the W4 form:

1. In box 3 the trainee should check “Single” regardless of actual marital status.
   
   
2. On line 5 the trainee should claim only one exemption (unless the trainee is from Canada, Mexico, American Samoa, Japan, Korea, or India, in which case a tax treaty may allow additional personal exemptions).
   
   
3. On line 6 the trainee should indicate that an additional $7.60 per week is to be withheld. If the pay period is every two weeks, request that $15.30 be deducted from each paycheck. This $7.60 per week is due to a nonresident alien being unable to claim the standard deduction on the tax return.

• W2 form
  This is sent to you by your host site
  
  
• 1040NR-EZ form
  This form and its instructions can be downloaded from the IRS website at http://www.irs.gov

1. The J-1 visa holder should verify he/she is exempt from Social Security and Medicare taxes
   
   
2. If the trainee participant is a nonresident alien, he/she should ask the host for a refund.
   The IRS requires that the trainee participant ask the host site for a refund of excess Social Security and Medicare taxes withheld. Make this request in writing and address it to the host site. Simply write:
   
   “I am requesting a refund of Social Security and Medicare taxes withheld from my stipend during the calendar year of ______. As a nonresident alien on a J-1 visa earning income as part of my approved program, I am exempt from these taxes. The IRS requests that I ask you for a refund of these taxes.”
   
   
3. If the host will not refund the amount withheld in error, ask for a letter from the host stating the fact that the amount has not been refunded. You will need this letter to apply directly to the IRS for your refund. Because the exemption from Social Security and Medicare taxes is a little known part of the tax law, some hosts may be reluctant to process the refund and slow to provide a letter explaining why. If your host will not provide this letter, you should write a statement addressed to the IRS saying that you requested this information, but were unable to obtain it. Simply write:
   
   “I requested my employer to refund the Social Security and Medicare taxes withheld in error because I am a nonresident alien on a J-1 visa. My employer has not refunded these taxes, nor has provided me a statement regarding the refund of these taxes.”
   
   
4. Download and fill in IRS Form 843 from the Internet. For directions on how to fill it out, click here.
   
   
5. Attach supporting evidence. Staple to form 843 a copy of:
   
   • W-2 form
     
   • J-1 visa
     
   • DS-2019 form
     
   • I-94 card
     
   • The “To Whom it May Concern” letter from the the International Branch YMCA. This was included with the package the YMCA sent to the trainee's address along with the DS-2019 form to his/her  home country.
     
   
   
6. Send the Claim for Refund to the IRS. Ideally form 843 should be filed with the IRS Office where your host's tax reports were filed. If you don't know where your host's reports were filed, send form 843 with the supporting documents to:
   
   The Internal Revenue Service Center
   Philadelphia, PA 19255

A final source for help: if you have done all the of above, and are still having difficulty, you should contact the Taxpayer Advocate Service at http://www.irs.gov/ind_info/advocate.html.
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