Taxes for students on OPT

Students on OPT are required to pay taxes on their income, and will complete a W-4 tax form with their new employer before they begin to be paid.

 

Determining Tax Status

It is important to recognize the difference between a Resident and Non-Resident Alien (NRA) for tax purposes.  Most typically, a student or graduate in F-1 status that has been in the US for less than 5 years will be considered an NRA for tax purposes.  Students in the US for more than 5 years are usually considered Residents for tax purposes. Please note this is not related to permanent residency in any way.

Your tax structure will change when you become a resident for tax purposes.  The “Substantial Presence Test” that you do with your tax return each year will determine this status for you.

 

NRA Taxes and FICA (Social Security and Medicare)

Please note, NRA students or graduates are not required to pay FICA tax (Medicare and Social Security taxes).  This is often a point of confusion for employers not used to hiring NRA employees.  You can share the following link with employers not familiar with this rule: http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Student-Liability-for-Social-Security-and-Medicare-Taxes

 

UMBC Graduates on OPT and UMBC’s Tax Prep Program (such as “Sprintax”)

UMBC provides a login code to the Sprintax Program for all current F-1 international students each year, which assists students with their required tax return each year.  Students that have graduated from UMBC and are currently on OPT or the OPT STEM Extension can request a login code if additional codes are available.  The ISSS office will assign codes to all current students, then invite any graduates to request a login code if available.  Please watch your email around February each year for updates from ISSS concerning the availability of Sprintax Prep login codes.

Please note, Sprintax can only be used for individuals that are still NRA’s for tax purposes.  Once you become a Resident for tax purposes, you will not be able to use this program, but can use other programs such as TurboTax on your own.