J-1 Taxes: Nonresident Status, Form 1040-NR and Form 8843

How Are J-1 Participants Taxed?

How US income tax applies to J-1 participants. Your days as an "exempt individual" don't count for the substantial presence test, but wages are still taxable.

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Resident or Nonresident

For US tax purposes you are a nonresident alien if you are not a US citizen or national and pass neither the green card test nor the substantial presence test. That test needs at least 31 days in the US this year and 183 days over three years, counting all days of this year, a third of last year's and a sixth of the year before.

Days as an exempt individual don't count. Teachers and trainees on a J visa and students on an F, J, M or Q visa can be exempt individuals if they substantially comply with their visa. "Exempt" refers only to the day count, not to tax.

Source: IRS: Taxation of Nonresident Aliens · IRS: Substantial Presence Test · IRS: Exempt Individuals: Teachers and Trainees

How Long You Count as Exempt

Teachers and trainees: generally not exempt if you were exempt as a teacher, trainee or student for any part of 2 of the 6 previous calendar years. An exception can apply if a foreign employer paid all of your compensation.

Students: not exempt after any part of more than 5 calendar years as exempt, unless you show the IRS that you do not intend to reside permanently in the US and have substantially complied with your status.

Your program determines which rule applies. For tax questions, the State Department recommends contacting your sponsor.

Source: IRS: Exempt Individuals: Teachers and Trainees · IRS: Exempt Individual: Who Is a Student · J-⁠1 Visa: Common Questions (US Department of State)

Filing Form 1040-NR

As a nonresident alien student, teacher or trainee on a J visa, you file Form 1040-NR if you have income subject to tax, such as wages, tips or scholarship and fellowship grants, or to claim back overwithheld tax. With wages subject to withholding the deadline is generally 15 April of the following year, otherwise generally 15 June. Form 4868, filed by the due date, gives an automatic extension.

Source: IRS: Taxation of Nonresident Aliens

Tax Treaties

US income tax treaties with a number of countries can reduce the US tax on certain income or exempt it. The country and the type of income determine the benefits. Many US states tax income too, and not all of them honor tax treaties.

Source: IRS: Tax Treaties

Form 8843

Form 8843 explains why you exclude your days from the substantial presence test. Send it with your tax return. If you don't have to file one, send it on its own, as a teacher or trainee to the Internal Revenue Service Center, Austin, TX 73301-0215, by the Form 1040-NR due date, as a student to the address in the form instructions.

Filed late, it generally no longer lets you exclude those days. Your spouse and unmarried children under 21 whose status depends on yours can be exempt individuals too.

Source: IRS: About Form 8843 · IRS: Exempt Individuals: Teachers and Trainees · IRS: Exempt Individual: Who Is a Student · IRS: Substantial Presence Test

FAQs

Do I pay US tax on my J-1 Visa wages?

Yes. Wages are income subject to tax, and you report them on Form 1040-NR. A tax treaty between your country and the US may reduce the tax on certain income or exempt it.

Source: IRS: Taxation of Nonresident Aliens · IRS: Tax Treaties

Do I need Form 8843 if I had no income?

Yes, if you exclude days as an exempt individual. Without a tax return you send Form 8843 to the IRS on its own.

Source: IRS: Exempt Individuals: Teachers and Trainees · IRS: Exempt Individual: Who Is a Student

Do I pay Social Security and Medicare tax?

Nonresident aliens generally pay these taxes on wages, with certain exceptions based on their status. One exception covers foreign students in F-1, J-1 Visa or M-1 status who are nonresident aliens, for work allowed under their visa. It does not cover J-2 family members.

Source: IRS: Foreign Student Liability for Social Security and Medicare Taxes

The Bottom Line

As an exempt individual your days don't count for the substantial presence test, but your wages are still taxed. File Form 1040-NR if you have taxable income, and Form 8843 to exclude your days. General information, not tax advice.

Related Terms

• 
  J-1 CostsWhat a J-1 internship or traineeship costs besides the trip, from the SEVIS fee to living costs in the US.
  more
• 
  J-1 InternA US exchange visitor category that lets students and recent graduates train at a US company for up to 12 months.
  more
• 
  J-1 TraineeA US exchange visitor category for people with a degree and work experience abroad, with training at a US company for up to 18 months.
  more
• 
  J-1 Research ScholarA J-1 category for researchers who come to a US university, research institute, museum or library to do research, for up to five years.
  more
• 
  J-2 VisaThe visa for the spouse and unmarried children under 21 of a J-1 participant who come along or join later.
  more
• 
  J-1 SponsorAn organization designated by the US Department of State to run J-1 exchange programs. Every J-1 participant needs one.
  more

Sources

1. IRS: Taxation of Nonresident Aliens
2. IRS: Substantial Presence Test
3. IRS: Exempt Individuals: Teachers and Trainees
4. IRS: Exempt Individual: Who Is a Student
5. J-⁠1 Visa: Common Questions (US Department of State)
6. IRS: Tax Treaties
7. IRS: About Form 8843
8. IRS: Foreign Student Liability for Social Security and Medicare Taxes