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Immigration Services

Taxes

Salk Institute for Biological Studies - Immigration Services - Taxes

Taxes

  1. What is the difference between Nonresident alien (NRA) vs. resident alien (RA)?

    An NRA and RA foreign national are treated differently for tax purposes.

    As an NRA, you are exempt from FICA and SDI tax for the first 2 calendar years in the U.S. under a J visa, and for the first 5 calendar years under an F visa.

    As an RA, you are subject to all federal and state taxation, unless you are still on a treaty and exempt from federal tax withholding.

    If you created a Glacier record during the previous tax year it will have identified you as a Resident or Nonresident alien for tax purposes. You may also take the Substantial Presence Test to make this determination, making sure to not count days as an exempt individual (F-1/J-1 student or J-1 scholar). You can also refer to Publication 519, “U.S. Tax Guide for Aliens” for more information. For California state tax residency determination, refer to Publication 1031.

  2. What type of deductions will/I not see in my paycheck while I am considered a nonresident for tax purposes?

    A nonresident alien for tax purposes is exempt from FICA (SS 6.2% and MED 1.45%) and SDI tax (1.1%).

    Per IRS regulations, payroll is required to add an NRA additional withholding amount added and deducted from your paycheck ($561.50 BW and $608.30 SM) for additional tax withholding to be calculated and deducted.

    This is due to an NRA foreign national not being able to take the standard deduction when filing your tax returns. The government wants to make sure that you have enough withholding to cover your tax due at the end of the year.

  3. What is Glacier? Who benefits from it?

    Arctic International LLC is a professional services firm which focuses primarily on nonresident alien tax issues. With the annual license purchased by the Salk Institute to use their GLACIER software, they provide the Salk Institute and our foreign nationals:

    To correctly determine and track residency status for tax purposes. As a withholding agent for the IRS, the Salk Institute is tasked with making correct determinations not only for the foreign national, but also for the Salk Institute. We document and review to make sure we are correctly processing for audit purposes.

    GLACIER helps to help the Salk Institute to:

    • determine foreign national residency status and treaty eligibility,
    • properly set up required taxation,
    • track visa changes, expirations, missing information (SSN), and
    • process year-end tax forms (for example Forms 1042-S for FN’s with treaties)

    GLACIER helps the foreign national to:

    • Be in compliance with annual tax filings
    • Correctly determine residency status for tax filing purposes.
    • To help NRA’s prepare annual federal tax returns with GLACIER Tax Prep
    • To keep track of visa updates and expirations with resulting tax implications
    • Answer questions through a Support Center with licensed tax professionals, and
    • Provides annual Q & A sessions with licensed tax professionals to assist in tax preparation during the tax season beginning 1/31/24 through 4/15/24 for FN’s using GLACIER Tax Prep software the annually purchased and provided by the Salk Institute. GTP will be made available at the end of this month.

    Side note: the Salk Institute provides a state workshop every year to help nonresident aliens prepare for their state tax return.

  4. What is a Tax treaty?

    Tax treaties are published in IRS Publication 901 – U.S. Tax Treaties

    This publication will tell you if there is a tax treaty between the United States and a particular country, which offers a reduced rate of, or possibly a complete exemption from, U.S. income tax for residents of that particular country. For example, there is a 2-year tax treaty with Germany and a 3-year tax treaty with China. The time frame begins with your initial date of entry to the U.S. and allows the FN to claim exemption from federal income tax withholding for the full time period.

  5. I am a Resident for tax purposes. How do I file my taxes?

    As a resident alien for tax purposes, you are basically treated the same as a U.S. citizen in being subject to all federal and state taxation and tax filing responsibilities. You can find tax forms and instructions on-line, or you can find a licensed tax professional to help you file your tax returns. There’s also the option to use a software program like TurboTax.

    When you first came on-board with the Salk Institute and completed the GLACIER documentation process as a foreign national, you were sent an email attachment with General Tax Information. This document has detailed federal and state information such as forms, websites, dates, addresses, and publications.

    We also included a link in the email to an IRS website that provides tax information and responsibilities for new immigrants to the U.S.

  6. What are the Tax filing deadlines this year? What if I miss it?<

    Every year the tax filing deadline is the same, April 15th, unless the IRS extends the date due to the date falling on the weekend or for some other circumstance (i.e. Covid).

    You can file for an extension; see Form 4868 on requesting an extension. Please note that the form for filing an extension must be received by the regular due date of the return (April 15) and that payment, if any, is still owed by the due date and subject to interest/penalties if not paid. See extension for state tax filing.

  7. Where can I get my tax return filing forms?

    If you use GLACIER Tax Prep, it will help prepare the form 1040NR and Form 8843. Tax forms can also be found at the Internal Revenue Service or the California Franchise Tax Board.

  8. What tax forms will we receive from Salk and when?

    Form W-2
    Form 1042-S
    Fellowship stipend letter
    Form 1099-MISC

    Everyone will electronically receive a Form W-2. They are now available through ESS in UKG. If you are on a treaty, you will also receive a Form 1042-S to include in filing your federal tax return. These forms will be electronically available later this week.

    If you were on a fellowship stipend in 2023, you will receive a letter notifying you of the total amount paid to you in 2023 to include in filing your tax returns. With a fellowship stipend, there is no federal or state tax withheld. Recipients were sent information on how to make estimated federal and state quarterly tax payments.

    1099’s from the Salk Institute are sent out late January. File Form 1099-MISC, Miscellaneous Information, for each person to whom the Salk Institute has paid other types of income payments during the year, for example.

    • At least $10 in royalties.
    • At least $600 in Rents or Other income type payments not processed through payroll.
  9. Will my federal tax exemption be affected if my DS-2019 has been issued for more than 2 years?

    Federal tax treaty time limits are not affected by your visa expirations and residency status. The time frame from goes from your initial “date of entry” through to the number of full years on the treaty.

    This differs from your change in residency status in that year 1 is the year you enter to 1 more full year if you are on a J visa. If your initial date of entry is any time in 2023, that counts as 1 full year.

  10. What percentage of my gross salary will be tax deductions?

    This depends on your W-4 and DE-4 filing status for federal and state tax holding. The calculation is based on your withholding status, income, and pay frequency, which then looks at annualized tax tables to determine your tax withholding. Plus, there is the 7.65% in FICA tax and 1.1% in SDI tax that will be withheld for a resident alien for tax purposes. But if you are a nonresident alien for tax purposes, there is no FICA and SDI tax for the first 2 years under a J visa, and the first 5 years under an F visa.

    Also, the amount of withholding in the calculation above is based on taxable wages, so it will change depending on whether or not you enroll for Section 125 pre-tax benefits and pre-tax federal and state retirement benefits. These benefits will reduce your taxable wages, and therefore, your federal and state tax withholding.

  11. I have been in the US on an ESTA before and this is my 1st year as a J-1 scholar, will I still be exempt from medicare and social security taxes?

    This depends on the type of visa you entered under in visit to the U.S. Was it a working visa such as a J or F visa, or was it a visiting visa such as a B visa.

    For example, if you came on a F visa 3 years ago, and are now entering on a J visa, you will be a resident alien for tax purposes and subject to all federal and state taxation.

    This is why it’s important for us to have the GLACIER software system to help the Salk Institute determine a correct residency status for tax purposes. Part of the documentation process is for the FN to sign a Tax Summary certifying that all information is true to the best of your knowledge. With the information entered and the GLACIER software, the Salk Institute is able to correctly determine all tax implications.

  12. I did not earn any income last year. Am I still required to file taxes?

    All nonresident aliens for federal tax purposes who are present in the U.S. in F, J, M, or Q statuses at any point in the tax year are required to file a Form 8843. Form 8843 is not an income tax return but an informational statement required by the U.S. government.

  13. What is an ITIN number? I was told I need an ITIN (Individual Taxpayer Identification Number) to claim a tax treaty benefit for myself or a dependent. What should I do?
    • If you haven’t applied for SSN, please contact Social Security Office right away.
  14. I received a 1099INT or 1042-S from my bank. What should I do?

    Nonresident aliens for federal tax purposes in J/F status are not taxed on interest from simple bank accounts; you may wish to file an IRS form W-8 BEN with your bank to avoid receiving these documents/having tax withheld.

    As a withholding agent for the IRS, the Salk Institute is tasked with making correct determinations not only for the foreign national, but also for the Salk Institute. We document and review to make sure everything is correct for audit purposes.

Message from GLACIER to our foreign nationals.
Warning about scammers targeting foreign nationals and immigrants.

  • IRS never initiates contact with taxpayers by email, text or social media to request personal or financial information.
  • New scam: a letter that states a refund is due – looks official and includes IRS logo and had incorrect contact information to call “in relation to your unclaimed refund.”

RESOURCES:

For tax questions you can go to IRS.gov or call 1-800-829-1040.

FTB Publication 923 | FTB.ca.gov

www.ftb.ca.gov

Secure Web Internet File Transfer (SWIFT) Guide for Resident, Nonresident, and Real Estate Withholding

Customer service phone numbers for State of California:

  • Tax information/Refund/Forms: 1-800-338-0505
  • Other assistance: 1-800-852-5711
  • Out of U.S. (not toll free): 1-916-845-6500