Non-Resident Taxation Information
Terms and Definitions

Academic Year: An academic year is typically considered to be August 15 (approximately) - May 15 (approximately). This calendar follows the school calendar. This is typically the dates of employment for 9 month employees.

Calendar Year: A calendar year is considered to be from January 1 - December 31. This term is typically associated with the Substantial Presence Test (SPT). If a student is present in the US from June 1 - July 1, even though they are only present for 30 days, it is considered 1 calendar year.

Compensation: Monetary payments to an individual for services performed. Payments made to employees. Also referred to as salary or wages.

Country of Tax Residence: Typically the country in which an individual was previously living and working before they came to the US. Can be different than country of citizenship. For instance, a person can be a citizen of India, but have been living and working in Canada for the past 5 years; hence the individual would be a Tax Resident of Canada, not India.

Federal Tax: Tax collected by the federal government for use at the federal level.

FICA Tax: The combination of Social Security and Medicare Tax. FICA taxes are 7.65% of taxable income. These taxes are non-refundable and are used by the federal government for the use of care of the people. Non-Residents for tax are exempt from paying this tax.

Fiscal Year: A fiscal year is typically considered to be July 1 - June 30. This when an institution typically converts to a new budget.

Form 1042-S: A tax form that contains payment summary information for students with taxable scholarship, tax treaty exemption holders, prize/award winners and NRA independent contractors. This form is provided by the employer to the employee by March 15 each year. This form is used to complete a US tax return. Not all NRA will receive this form

Form 8233: Form used to honor US tax treaties for compensation/wages/salary. Must be completed by employee

Form 8843: Form that must be submitted to the IRS to declare presence in the US. All internationals in the US must complete this form. If attaching to a US federal tax return, submit by April 15. If submitting alone, must be submitted by June 15.

Form I-94: Form I-94 is an arrival/departure form typically stapled into your passport across from your Visa. The date written on this card is the date in which a person's permission to remain in the US expires.

Form W2: A tax form that contains salary summary of a calendar year provided by the employer to the employer by January 31 each year. This form is used to complete a US tax return.

Form W4: Employee Withholding Allowance Certificate. Form used by employee to declare the amount of withholding from the individuals paycheck. Non-Resident for tax, are restricted to amount of withholdings.

Form W-7: Form used to apply for Individual Tax Identification Number.

Form W-8BEN: Federal tax form used to honor US tax treaties for scholarships. Must be completed by employee.

Individual Tax Identification Number: Number assigned to an individual that is used to report income not associated with employment.

Non-Resident for Tax: An individual who is temporary in the US, who has not met the SPT. Required only to pay taxes on US source income. Complete tax form 1040NR or 1040NR-EZ.

Original Date of Entry: This is the date in which the individual first arrived in the US to carry out the purpose of their visa (teaching, student, etc.) This does not mean "last date of entry" and does not include vacations, holidays, etc.)

Permanent Resident: An individual who holds permanent residency status in the US. Typically called a "Green Card". Individuals are taxed as US citizens.

Resident for Tax: An individual who has been in the US long enough to meet the SPT. Residents for tax are taxed on their worldwide income. Complete tax form 1040, 1040-EZ.

Scholarship: Monetary payments given to an individual freely and without expectation of services exchanged. No services are required by the recipient.

Social Security Number: Number assigned to an individual that is used to report income. Only available for employed individuals.

State Tax: Tax collected by the state government for use at the state level. Some states do not have a state tax. Arkansas does have a state tax.

Substantial Presence Test: A test used to determine an individual's US tax residency status. It involves a calculation of days of presence over a period of 3 calendar years.

Tax Treaty: An agreement between the US and over 50 countries that allows certain exemptions of federal tax to reduce or eliminate double taxation.

Visa Status: Visa status refers to the immigration status in which the individual is in the US. (i.e. F-1, J-1, H-1B)