Nonresident Stanford students, postdoctoral scholars and employees who are in the U.S. on temporary visas and are not tax residents of the U.S. are considered nonresidents and have special taxation rules.
To comply with U.S. law, Stanford must verify eligibility for employment for all new employees, including nonresident employees. Nonresidents generally have at least one of the following documents:
- Unexpired foreign passport with an I-94 card and appropriate supporting documents for the visa type
- J-1: DS-2019
- F-1: I-20
- H-1B: I-797
- TN: Legible date on I-94
- Unexpired Employment Authorization card
- Common for J-2 spouses and F-1 students on optional practical training
Employment authorizations expire on the expiration date listed on the I-94 supporting document or on the Employment Authorization card. Nonresident employees and the responsible administrator must monitor expiration dates. To maintain employment, employees must obtain and present an updated Employment Authorization Document before the current document expires. Refer to Topic Overview: Verify Employment Eligibility (I-9) for more information.
If an updated document is not obtained, nonresident employees must stop working on the expiration date listed on their current authorization document.
A Social Security number is required of all employees in the U.S. Most nonresidents do not have a Social Security number when they arrive in the U.S. These nonresidents should wait for two weeks after entering the U.S. before applying for a Social Security number.
Nonresident employees may begin working before applying for a Social Security number, but they must apply and provide the number to Stanford in a timely manner. Student employees should enter their Social Security number in Axess when it is received. All other employees should present their Social Security card to their department administrator.
- Withholding allowances for nonresidents on the Federal W-4 Form are limited to the Single marital status
- Withholding allowances on the California DE-4 form are not limited for nonresidents
- Refer to How to: Declare or Change Income Tax Withholding Allowances
- Nonresident employees on F-1 and J-1 visas are exempt from paying FICA (Social Security and Medicare) taxes until they become residents for tax purposes. Students also fall under the student FICA exemption, so they generally do not pay FICA taxes even after they become residents for tax purposes.
- F-1 and J-1 students generally maintain nonresident status for their first five calendar years in the U.S.
- J-1 researchers generally maintain nonresident status for their first two calendar years in the U.S. On Jan. 1 of the third calendar year in the U.S., they begin to pay FICA taxes.
- H-1B, J-2 and TN visa holders are subject to FICA taxes from their first day of employment.
To establish the exemption from FICA taxes, nonresident employees should submit a completed Withholding Allowance Declaration Form to Payroll, listing all entry and exit dates to and from the U.S., so residency status can be determined.
Residents of certain countries may be eligible to claim a tax treaty to exempt all or part of their wages from U.S. federal income tax withholding.
- California does not honor federal tax treaties; therefore, wages are taxable by the state of California
- Tax treaties for F-1 and J-1 students generally exempt a limited amount of wages, from $2,000 to $5,000, from federal income tax
- Tax treaties for J-1 researchers generally exempt all wages from federal income tax
- A Social Security number is required to claim the tax treaty benefit
Wages for nonresident employees are reported on Form W-2 at the end of the calendar year (December 31). Nonresidents who have claimed a tax treaty with Stanford will receive a second form, Form 1042-S, reporting the wages associated with the tax treaty benefit.