As a participant in the HPUSA J1 program, you earn income in the U.S. and are required to pay Federal, State, and local taxes.
When you are filing out your new hire paperwork, remember you are exempt from FICA (Medicare, Social Security or Unemployment) taxes.
- Federal Income Tax
- State Income Tax
- Local Income Tax
- Social Security taxes
- Medicare Taxes
- Federal unemployment taxes
Before your last day at work, give your contact information (address, email, telephone, etc.) to your employer so they can mail you your W-2 Form for tax purposes. This form is sent by the employer(s) after the tax year ends and it details the total wages and the amount of each tax that was withheld. At the beginning of the calendar year after your J-1 program, you will receive a W-2 form from your U.S. employer detailing what taxes you paid while under their employment.
The W-2 must legally be issued by January 31, and you can expect to receive it in February or March at the latest. If you have not received your W-2 by January 31st, please contact your host property.
My employer withheld Social Security and Medicare taxes from my salary. Can I get this refunded?
Yes. J visa holders are not subject to Social Security or Medicare taxes as long as they are considered a “non-resident alien for tax purposes” (IRS Publication 519). Refund of these taxes may be requested from your employer. If your employer is unable to refund these taxes, you may file Form 843 and Form 8316 for a refund from the IRS.
FILING YOUR TAX RETURN
As part of your J-1 program, you must file a Federal tax return. Failure to file a Federal tax return will breech IRS regulations. The good news is you may be entitled to a refund of some or all of the taxes you paid while you worked in the U.S. You are required by law to file a U.S. tax return, even if you will be in your home country when it is time to do this. Tax returns must be filed by April 15 for the previous tax year (January 1 – December 31).
Some participants will need to file two tax returns because of the time of the year they worked in the U.S. For example, if your DS-2019 dates are November 15, 2017 through March 15, 2018, you will file a tax return in 2017 for wages earned November 15 through December 31, 2017. You will also complete a second tax return in 2018 for wages earned January 1 through March 15, 2018.
From January 2018, the rules regarding tax returns for J-1 programs have changed. Below is a summary of what the changes mean:
- Federal Tax:
- The Tax Cuts and Jobs Act 2017 has removed the personal exemption of $4,050. This personal exemption in the past allowed J-1 participants to earn up to $4,050 tax-free. However, some countries including have tax treaties that cover the intern and trainee visas, ensuring you are still due a refund on some of the Federal tax you have paid.
- *Regardless of your refund amount, every J-1 visa holder must still file a Federal tax return. If you plan to return to the US in the future, it is important you file your tax return correctly.
- State Tax:
- The good news is that State tax refunds are unaffected. In order to receive your State refund you must first file a Federal tax return.
- J-1 participants are referred to as ‘non-resident aliens’ under IRS regulation and we would also like to highlight that online providers such as Turbo Tax are not suitable for non-residents aliens. TurboTax clearly states, their software is not suitable for non-residents. See: https://intuit.me/2Mb2TyZ & https://intuit.me/2nBD2BK If you file incorrectly, you will be in breach of IRS regulation and risk being audited and incurring fines or penalties.
- You can file your tax return yourself or you can use a company to file the tax return for you. If using a company to file your tax return for you, HPUSA suggests Taxback.
Taxback recommends Sprintax, which is the only online tax preparation software for non-resident US tax returns. When you set up an account with Sprintax you can easily prepare fully compliant Federal and State tax returns online in minutes.
Any questions? Email email@example.com. If you decide to complete the tax returns yourself, you will need the following forms:
- W-2 Form (outlined above)
- 1040NR-EZ Form – This form is specifically for non-resident aliens. It can be obtained, together with instructions for filling it out, on the US government web site – www.irs.gov (search for “1040NR – EZ form”). Use the charts found in the 1040NR-EZ instructions to determine the tax refund or the amount of tax owed.
- State Income Tax Form – This form is different for each of the 50 states in the U.S., and you will need to complete the form for the state(s) in which you have worked. A list of state tax sites is available at www.irs.gov.