The Ultimate J-1 scholar tax guide
Thousands of people travel to the US on J-1 visas every year.
But did you know if you go to the US on a J-1 visa you have a tax-filing requirement? It’s the law!
With that in mind, we have put together this post that outlines all J-1 Scholars need to know about tax when in the US.
What is a J-1 Scholar?
There are different categories of a J-1 Scholar.
Essentially, a J-1 Scholar is a professor, researcher, short-term scholar or specialist from another country who has been allowed to enter the US for a specific reason, and for a limited amount of time.
A J-1 Scholar will be partaking in the the J-1 Exchange Visitor Program which is operated by the US Department of State.
Professors are allowed to stay in the US from three weeks up to five years, depending on the circumstances of their visa, the same goes for researchers.
Meanwhile, a specialist can stay from three weeks to one year, and a short-term scholar can stay for up to six months.
Are J-1 Scholars residents or nonresidents for tax purposes in the US?
Both residents and nonresident aliens are obliged to file their tax return at the end of the tax year.
Whether a J-1 Scholar will be considered a resident alien or nonresident alien for the first two calendar years of their stay is if he or she meets the Substantial Presence Test.
To be able to qualify for the Substantial Presence Test, you must be physically present in the US on at least the following:
- 31 days during the current year, and
- 183 days during the 3-year period that includes both the current year and the 2 years that were before that, counting:
- Each of the days you were present in the US in the current year, and
- 1/3 of the days that you were present in the US in the first year before the current year, and
- 1/6 of the days you were present in the US in the second year before the current year
In some circumstances, a J-1 alien who doesn’t meet the Substantial Presence Test may be able to choose to be treated as a tax resident for the year.
If you are a J-1 visa holder – any other category – the exempt years are 2 of the last 6.
What taxes do J-1 Scholars pay?
If you are in the US as a J-1 Scholar, you’ll have to pay tax on any US-sourced income you received during your stay.
The rate of tax that you will pay will depend on a variety of factors. These include:
- how much income you received
- the rate of tax in your state
- and if your home country has a tax treaty with the US.
US tax rates are progressive. If you are deemed a nonresident, you must pay 10% on any income tax up to $11,600 (in 2024).
However, if you received more than this amount on your J-1 program, you must pay 12% in income tax on anything between $11,600 and $47,150 (2024 tax brackets).
There are a variety of things you can be taxed on, such as:
- Wages and compensation
- Salaries
- Interest
- Dividends
- Some scholarships/fellowship grants
- Prizes/awards
Some J-1 teachers or researchers may be able to avail of tax treaties for compensation for teaching or research.
This will depend on any treaties your home country has with the US.
You can find out more on that here.
Will J-1 visa Scholars have to file a tax return?
Every J-1 Research Scholar / Professor has to file a tax return before the annual tax deadline.
In 2024, the tax deadline falls on 15 April.
If you earned income during your stay in the US, it’s vitally important that you file correctly when filling out your tax return.
If you file a non-compliant tax return, it can lead to fines or penalties from the IRS. This in turn can jeopardize applications for future US visa or green cards..
When preparing to file your US tax documents, you will need the following:
- Passport
- Information such as US entry and exit dates for current as well as any previous visits
- All of the tax forms you’ve received (including Forms W-2, 1042-S, and/or 1099, etc.)
- Visa/immigration status information-Form DS
- Your individual Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
The 1040NR (federal return) is one of the most important tax forms, and can be confusing and difficult for nonresidents to successfully complete. Sprintax Returns can help prepare your US tax return so you don’t have to!
Some of the boxes on the 1040NR form will not directly apply to you. However, a great deal of the information needed is unique to you – personal details, total earnings, the amount of tax that you paid.
Even if you had no US-sourced income, you still need to file a Form 8843. This is also known as ‘Statement for Exempt Individuals with a Medical Condition’.
Are J-1 Research Scholars eligible for tax refunds?
Yes!
Filing a 1040NR can also help you get any tax refund you may be due!
A lot of J-1 holders in the US are due tax refunds for a variety of reasons, such as if they overpaid tax.
You can easily prepare your tax return online with Sprintax Returns – we’re the go-to online tax filing software for nonresident aliens.
The amount of time it will take to receive your refund depends. After all, tax return processing time for paper tax returns by the IRS is usually around 4-6 weeks from the moment when the tax return is received by them.
Who can help me with my J-1 Research Scholar tax return?
You can always file your taxes by yourself.
However, Sprintax Returns is here to help!
When you create a Sprintax account, you can easily prepare all your relevant tax documents, such as fully completed and compliant 1040NR and form 8843 tax documents.
We will also help you claim your MAXIMUM legal tax refund.
With Sprintax Returns you can:
- Save time and stress!
- Determine your residency status
- Prepare a fully compliant US tax return
- E-file form 1040-NR (eligibility criteria)
- Maximize your State tax refund
- Avail of our 24/7 Live Chat facility
Prepare all of your necessary J-1 tax documents with Sprintax Returns today!
