Special Case Solutions
Many factors can complicate the process of determining how an international visitor's tax returns should be filed. The following are a few fact cases that have been resolved. Review them for possible similarity to your own circumstances. If your case is not found among these, be free to send an email to firstname.lastname@example.org with your questions.
Case 1: Who files the return and when? Two students married to one another, one a resident alien, the other a nonresident alien. They are in their 5th and 6th years in the U.S. What type of return should be filed and who should prepare the returns?
Case 2: Request to refund FICA taxes. A J-2 dependent allowed to work in the U.S. had FICA and Medicare taxes withheld from her pay. She requested that these taxes be refunded to her.
Case 3: Income greater than TAP limit - what do I do? After graduation a single student or a married couple may have income exceeding the TAP limit for the current tax year.
Case 4: Studying beyond 5 years - what do I do? A student's program of study not infrequently keeps him or her in the U.S. beyond 5 years. What are the implications for filing U.S. tax returns?
Case 5: Spouses studying at different universities - what do they do? A student at Notre Dame is married to a student at another college or university. Who prepares their tax returns?
Case 1: Who files the return and when?
A student on an F-1 visa graduated in 2005, which was his 6th year in the U.S. This made him a resident alien for tax purposes. He was married to a student that in 2005 was in her 5th year in the U.S. For the 2005 tax year they elected to file with a married filing jointly status.
Question: would they be able to file with the international TAP in 2006, since in that year 2006 is the spouse's 6th year in the U.S.
Answer: Assuming the substantial presence test in 2006 indicated that they continued to be eligible to file as resident aliens, then they would file a domestic tax return for 2006. The 2006 return would be patterned after the 2005 filing. The domestic side of the TAP (if joint income did not exceed the TAP income limit) would be able to prepare their 2006 return, provided there were no international tax law issues that required attention from the international side of the TAP. If income significantly exceeded the TAP income limit, they could prepare their own return or hire a professional tax preparer.
Case 2: Request to refund FICA taxes
A J-2 dependent is an exempt individual for purposes of the substantial presence test (SPT), because dependents follow the status of the primary visa holder. But the FICA/Medicare tax exemption authorized under section 3121(b)(19) of the Internal Revenue code applies only to the primary J-1 visa holder and not to dependents. For this reason she is not exempt from having to pay FICA and Medicare taxes. She will not be able to obtain a refund of the FICA and Medicare taxes paid.
Case 3: Income greater than TAP limit - what do I do?
In those cases where international Notre Dame visitors have income exceeding the TAP limit (shown here), they ought to request a review of their case by the Faculty Coordinator or by the International Tax Services Coordinator. Where the excess over the limit is significantly large, the tax returns may be prepared subject to the condition that the taxpayer agrees to make a contribution to Notre Dame or to a charitable organization.
Case 4: Studying beyond 5 years - what do I do?
When a student has been in the U.S. beyond five years, the exempt individual part of the Substantial Presence Test (SPT) formula no longer applies. This means that the days of physical presence in the U.S. no longer are ignored when performing the SPT. Usually when the days of physical presence are counted, the student passes the SPT, which in turn means s/he files his tax returns as a resident alien.
However, it must be noted that just because the visiting international person files one year as a resident alien, s/he may not be able to do so in succeeding years. That is because people can move out of the U.S. for part of the year and their days of physical presence may be insufficient to pass the test. Should a student fail the SPT in any tax year, then for that tax year the student files as a non-resident alien using the forms and tax laws that governed his/her first five years in the U.S.
The bottom line conclusion to draw from this is that as long as you are studying or working in the U.S., you will have to perform the SPT every tax year. The one exception to this guideline would be when you attain Legal Permanent Resident status. Once you become a greencard holder, you no longer need perform the SPT.
Case 5: Spouses studying at different universities - what do they do?
The Notre Dame TAP will provide free income tax preparation service to nonresident alien international students studying at a college or university not Notre Dame whose tax year income is at or less than the TAP income limit and whose spouse (husband/wife) is a student, staff, or faculty member at the University of Notre Dame.
To receive this free service the nonresident alien off-campus student must have her/his income tax returns prepared at the same time as his or her spouse.
The Notre Dame spouse must use the Appointment Determination Process (ADP - found here) to determine who will provide the tax service to the couple. This likely will mean using the ADP twice, once for each member of the married couple. If the ADP indicates that the trained student volunteers will prepare the returns, the Notre Dame spouse in the couple must make an in-person appointment at the ISSA reception desk for both spouses.