Having worked in the US on the J-1 Exchange Visitor program, you’ll no doubt be aware that tax was deducted from your earnings. You may be able to claim back some of the tax you’ve paid. IENA have joined forces with US non-resident tax specialist Sprintax to help you to understand your US tax obligations and how to claim your tax refund the easy way!
So let’s get started!
Here’s 4 things all J-1 participants should know about US tax
1. Tax returns
Every J-1 participant is required by law to file a tax return. Filing is also one of the conditions of the J-1 visa. The form that the majority of J-1 participants must fill out is known as 1040NR.
The US tax year runs from 1 January – 31 December. You can file your return as of January 1 2024. The earlier you file, the quicker you will receive your refund. The tax filing deadline is April 15 2024.
It’s vital to comply with US tax law especially if you wish to return to the US in future. And, if you do not file a correct tax return, you may end up having to pay some unwanted fines or penalties.
Residency status
The majority of all J-1 visa holders are considered non-residents for tax purposes in the US.
Non-resident J-1 participants must file a 1040NR tax return in order to remain compliant with the IRS.
Filing a tax return as a US resident will not be considered compliant with the conditions of the J-1 visa. So it’s important to note that non-residents can’t file a tax return with Turbo Tax. Sprintax is the non-resident partner of choice for Turbo Tax*.
*You can read more about this here https://intuit.me/2Mb2TyZ & https://intuit.me/2nBD2BK
If you’re unsure of whether or not you should be considered ‘non-resident’, Sprintax can help you determine your tax status.
2. Tax Rates
In the US, people pay the following taxes:
Federal Tax
Federal tax is progressive. In other words, the more you earn the more tax will be deducted from your pay by your employer.
For example, all non-residents must pay 10% in federal income tax up to $9,525. And if you earn more than this amount on your J-1 program, you must pay 12% in income tax on the amount between $9,525 and $38,700.
State Tax
The rate of state tax you pay depends on which state you work in but generally it ranges between 1 – 13%.
FICA Tax
If you are on an F-1 or J-1 student visa, you are typically exempt from paying FICA taxes and they should not be deducted from your income. If they are, you are entitled to claim them back.
3. Tax refunds
Every year thousands of J-1 participants are entitled to a US state tax refund. The average State tax refund for a Sprintax customer is $175. But remember, in order to receive your refund you will need to file a tax return. It’s your money. So file your return and claim your cash!
4. The benefits of choosing Sprintax
When you create your account, the Sprintax software will assist you in preparing fully compliant Federal and State tax returns. Sprintax will also enable you to receive your maximum legal tax refund.
Sprintax is the ‘go-to’ tax filing software for numerous major universities in the US including NYU, Columbia, Arizona State University, Illinois Institute of Technology and Cornell. Sprintax is also the non-resident partner of choice for Turbo Tax.
Why use Sprintax
- Secure and affordable online service
- You will be compliant with the IRS
- You can easily prepare all necessary tax documents including Federal and State tax returns and Form 8843
- Over 200,000 non-residents use Sprintax to prepare their tax forms each year Live chat support on the software
To file your J-1 tax return, get started here.
Attend a free webinar on Nonresident Tax from Sprintax to learn more:
- Wednesday, December 13th @ 12pm EST – Register here
- Tuesday, January 23rd @ 2pm EST – Register here
- Tuesday, February 13th @ 11am EST – Register here
- Wednesday, March 27th @ 2pm EST – Register here
- Wednesday, April 10th @ 11am EST – Register here