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Foreign Nationals - Frequently Asked Questions

What payroll taxes are deducted from my paycheck and what happens to the amounts withheld?

Federal withholding tax, shown on your earnings statement as "Fed Withholding", is based on tax withholding tables issued by the IRS, Internal Revenue Service. The amounts withheld area reported by your employer on an annual form W-2 form for your use when preparing your individual income tax returns.

State withholding tax, shown on the earnings statement as "OK Withholding" is based on tax withholding tables issued by Oklahoma Tax Commission

The amounts withheld for federal and state taxes are reported by your employer on an annual form W-2 form.

FICA tax (also called Social Security and Medicare Tax) shown in your earnings statement as "Fed OASDI/EE" and "Fed MED/EE" respectively. The combined rate deducted from employee's pay is 7.65 percent. Among other things, FICA, Federal Insurance Contributions Act, provides for a federal system of old-age insurance.

Are foreign nationals exempt from taxes?

For all or a portion of federal income taxes to be exempt from withholding, the relevant sections of the income tax treaty must be met.

For FICA tax to be exempt under the foreign national rules, you must be a nonresident alien in F-1 or J-1 status. To be exempt under the Student FICA rule, you need to carry sufficient credit hours per semester and maintain F-1 or J-1 student status. This is the general rule only. For foreign nationals with prior stays in the U.S. the rules may change. Contact Payroll Services with questions on your individual status.

Can I decide on the amount of taxes withheld from my pay?

The form W-4 is the tax form used by employees to direct the amount of federal and state taxes withheld from your monthly pay. However, for foreign nationals in nonresident alien tax status there are additional instructions by the IRS on how to complete this form. Foreign nationals in resident alien tax status complete the form following the instructions on the form. The amount of federal and state income tax withheld from your pay depends on your tax status and any applicable income tax treaty .

What are individual income tax returns?

Foreign nationals must prepare individual income tax forms, called "returns", with the U.S. federal and state governments. For Nonresident Aliens (NRA), OUHSC makes available a NRA tax preparation software. NRAs use the federal form 1040NR series tax forms and the form 511NR for the state of Oklahoma. Resident Aliens (RA) file tax forms similar to U.S. citizens using the form 1040 series. RAs can use the services of a tax preparation professional or tax preparation software. Each individual is responsible for filing tax returns for every calendar year or partial calendar year of residence in the U.S.

How do I file tax returns if I am in both nonresident alien and resident alien status in teh same tax year?

Follow the IRS instructions on how to file dual-status returns.

How do I get my final pay and/or income tax refund if I leave the country?

Prior to leaving the U.S., discuss with your U.S. bank how to keep your account open so your final pay can be deposited, and how to set up a wire transfer for the funds to be transferred to a foreign bank account.. If you have a refund of tax on your U.S. federal or state tax return (or both), you may direct the IRS to deposit the amount into your U.S. bank account. Note that the IRS will not deposit refunds into foreign bank accounts. If you close your U.S. bank account after returning home, and before you receive any tax refund due, you may not be able to cash a check.

What happens if I fail to file my taxes?

The IRS (Internal Revenue Service) can assess penalty and interest and seize U.S. bank assets for repayment. Fines and penalties can amount to more than the original debt. There can be immigration consequences for failing to file taxes. Applicants for a permanent residency "green card" must provide proof of filing taxes for all years of residence in the U.S.

What happens if I file my taxes but use the wrong forms?

We recommend you consult with a tax professional and with your immigration attorney.