Income Tax Basics


Taxes are a financial charge imposed by a governing body upon a taxpayer to collect funds. Income taxes are a financial charge imposed on the income earned by an individual. Not all income comes from being employed in the U.S. Taxable income can also be from a fellowship, grant, or scholarship. Income can be taxed at the local, state, and federal/national level. Those residing in Texas will not have their income taxed at the local or state level, but their income is subject to taxation by the U.S. federal government. The Internal Revenue Services (IRS) is the unit of the U.S. federal government responsible for administering and enforcing tax laws.
 
It is the taxpayer’s (that’s YOU!) responsibility to meet their tax obligations to the IRS. Most taxpayers meet their tax obligations through the following process:

  1. A portion of your income is withheld by the employer or organization that is providing the income.
  2. The withheld portion of your income is given directly to the IRS on your behalf.
  3. Each year, you file a tax return to summarize your tax obligations and payments for the prior tax year. If you paid too much in taxes during the tax year, the IRS would owe you a refund. If you paid too little in taxes during the tax year, you would owe the IRS the remainder of your obligation.
 
Paying federal income taxes and filing the appropriate paperwork with the U.S. government is required by law. Failure to comply can result in serious immigration, financial, and legal consequences.
  • Most international students in F-1 and J-1 status and their F-2/J-2 dependents are considered NONRESIDENTS for tax purposes and therefore DO have to file a tax form with the U.S. government for each tax year they are in the U.S. even if they earned NO income.
  • Most international students in F-1 and J-1 status are NOT PERMITTED to electronically file their tax return with any software other than Sprintax.
  • Most international students in F-1 and J-1 status are NOT PERMITTED to utilize the tax filing software products most advertised in the U.S. because these products typically only apply to residents for tax purposes.
  • Each spring, ISS purchases tax software called Sprintax to help international students determine their tax residency status and to file their tax return. Sprintax is NOT the same as the Glacier Nonresident Alien Tax Compliance System (https://www.online-tax.net/glogin.asp) administered by Texas A&M University.

Check out Sprintax’s Nonresident Taxes Explained
Check out Sprintax’s Ultimate Guide to Nonresident Taxes in the U.S.
Check out Sprintax’s U.S. Tax Season Survival Guide for F-1 Students
Check out Sprintax’s Ultimate Tax Guide for F-1 Students on OPT

GLACIER Nonresident Alien Tax Compliance (GLACIER) is a system that allows Texas A&M University to collect information and make decisions regarding how much you may be required to pay in federal income taxes if you receive any taxable income from the University. You do NOT file your tax return through GLACIER. If you receive taxable income from Texas A&M University, the information you input into GLACIER determines how much of your income should be withheld for tax payment purposes. For assistance with how to enter your information into GLACIER Nonresident Alien Tax Compliance (https://www.online-tax.net/glogin.asp), please ask your employing department's payroll office or visit https://uas.tamu.edu/tax/instructions.html. ISS does not have access to this system and therefore we are not the best resource for advising on how to use it.
 
All international students receiving taxable income from Texas A&M University will receive an email from support@online.tax.net explaining that they are required to create and maintain an account in GLACIER. If the student is receiving taxable income from multiple units at Texas A&M University, they may even be required to set up multiple GLACIER accounts. Taxable income can be from a variety of sources, such as employment, fellowships, grants, scholarships, etc. Prizes, awards, and payment for participating in research can all be considered taxable income as well and will require the student to create a GLACIER account. Having taxable income does not necessarily mean the student is employed by Texas A&M University. If a student is emailed about creating an account in GLACIER, they should so as soon as possible. It is best to create the GLACIER account and submit the required documents even if the student does not yet have an SSN or ITIN.
 
In GLACIER, the student will be instructed to enter either their SSN or their ITIN. If the student has both, they should enter their SSN. The ITIN is no longer valid once the individual receives an SSN. After the student enters their SSN or ITIN into GLACIER, the University will be able to apply any applicable tax treaties and exemptions to the student’s taxable income. This means the student should be taxed at the correct rate by the University. Each individual student’s tax scenario is unique. It is not a guarantee that a student will be eligible for any tax treaties or exemptions, but if they are eligible, the University must have an SSN or ITIN in order to apply them.
  • F-1 students can only obtain a Social Security Number (SSN) if they have employment. F-1 students must have either an offer of on-campus employment or authorization to work off-campus before even applying for an SSN. Without employment, F-1 students cannot obtain an SSN.
  • F-1 students can only obtain an Individual Taxpayer Identification Number (ITIN) if they do not have, and are not eligible to obtain, an SSN and they need a tax processing number issued by the U.S. government for federal tax withholding and filing purposes. ITINs do not serve any purpose other than federal tax reporting. 
If the student does not have an SSN or an ITIN, they will be asked to select from the following options.
  • I do NOT have a U.S.-issued SSN or ITIN; I would like to apply for an SSN
    • If this option is selected, the student will not receive instructions for applying for the SSN. Instructions for this process can be found on the ISS website at https://iss.tamu.edu/Current-Students/Social-Security-Number. The GLACIER process will be on hold until the student applies for, receives, and enters their SSN.
  • I have applied for an SSN, and I have not yet received the number
    • If this option is selected, the GLACIER process will be on hold until the student receives and enters their SSN.
  • I do NOT have a U.S.-Issued SSN or ITIN; I would like to apply for an ITIN
  • I have applied for an ITIN, and I have not yet received the number
    • If this option is selected, the GLACIER process will be on hold until the student receives and enters their ITIN. 
Until the student’s SSN or ITIN is reported in GLACIER, the student’s income will be taxed at 14%. No tax treaties or exemptions can be granted without the SSN or ITIN, so the University is required to apply the highest possible tax rate. This 14% tax withholding will either be deducted from the income that is distributed to the student and/or charged to the student’s tuition and fee bill through the international withholding tax.
 
The GLACIER system will ask the student to enter their SSN or ITIN within 10 days after the GLACIER account is created. However, the University is aware that it may take much longer than 10 days for a student to receive an SSN or ITIN. The student should report their number in GLACIER as soon as they receive it so the University can begin granting any applicable tax treaties and exemptions and the student can be charged the proper amount of tax withholding. If the SSN or ITIN is entered into GLACIER on or prior to mid-December, and it is determined that the student should have been charged at a rate lower than 14%, it may be possible for the University to credit the student. Alternatively, the student should receive a refund of unnecessary tax withholding when they file their tax return with the Internal Revenue Service (IRS) in the spring. The student will need to have an SSN or ITIN to file the tax return. After a student has an SSN or ITIN entered in GLACIER, the University should be able to calculate their proper tax withholding for all future tax years.
 
Students receiving taxable income because they are employed by Texas A&M University will also be required to maintain an account in Workday. These students will be asked to enter their SSN into Workday once they have it. There is no specific deadline for entering the SSN into Workday, but it should be entered as soon as the individual receives it.
 
U.S. tax law divides people into residents and nonresidents for tax purposes. Residency for tax purposes is determined by the Substantial Presence Test – a complicated calculation that considers how long you have been in the U.S. and in what status. Sprintax will calculate the Substantial Presence Test for you. Residents for tax purposes follow the same rules as U.S. Citizens and are taxed on world-wide income. Nonresidents for tax purposes follow different rules and are taxed on U.S.-sourced income. Nonresidents for tax purposes are not eligible for many of the tax benefits available to residents for tax purposes, including the ability to use most of the tax products marketed in the U.S. and the ability to benefit from many tax credits.

 
There are 3 basic categories of tax forms that international students may encounter in the U.S.
  1. Forms that you (the taxpayer) must complete and submit to the entity that is providing your taxable income (such as your employer, school, bank, etc.) so they can calculate the correct amount of federal income tax that should be withheld from your taxable income.
  2. Forms that you (the taxpayer) will receive from the entity that is providing your taxable income (such as your employer, school, bank, etc.) to summarize your prior year tax history. These forms show you how much taxable income you earned and how much federal income tax you paid already because it was withheld from your income.
  3. Forms that you (the taxpayer) must complete and submit to the U.S. government (the Internal Revenue Services, or IRS) each year to summarize your tax situation for the previous tax year (January 1 – December 31).
Here is a very basic overview of the most common tax forms you may encounter as an international student. If you receive a form not listed below, you may email hello@sprintax.com to determine how the form may impact your tax filing requirements.
Here you will find answers to the tax-related questions most frequently asked by international students.