Tax Checklist for F-1/OPT Students with Indian Bank Accounts

(UNITED STATES) A detailed checklist circulating among international student circles is refocusing attention on how F-1 visa holders with Indian bank accounts should handle U.S. tax season. It highlights that most students in their first five calendar years on campus are treated as nonresident aliens for federal tax purposes and must meet specific filing rules even with little or no income.

The guidance centers on the IRS’s substantial presence test, which can shift a student from nonresident to resident status for tax purposes after those initial years — or sooner if visa status changes. That shift affects what income must be reported and which forms are required. It also emphasizes that recordkeeping for Indian accounts and remittances matters now, not just later when students seek H‑1B jobs or permanent residence.

Filing basics for F-1 nonresident students

• Many students in their first five years in F-1 status generally follow a simpler filing path, but core obligations remain tied to immigration stay.
• A key requirement: Form 8843 must be filed by nonresident students even if they have no U.S. income.
• If a student earned wages or received taxable scholarships, they should file Form 1040-NR along with Form 8843.
• The checklist points students to the substantial presence test and the student exemption; this calculation can change a person’s tax residency.

For official rules and the student exemption, see the IRS page for the Substantial Presence Test: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test.

Substantial Presence Test — quick summary

• The test uses a day-count formula: 31 days in the current year plus weighted days from the prior two years.
• If the total meets the threshold, a student becomes a tax resident, with worldwide income reporting obligations.
• The student exemption can delay that shift for eligible F-1 students during their early years.

Important deadlines and timing

• For nonresident filers with U.S. income: typical deadline is April 15 for the prior calendar year.
• For nonresident students with no U.S. income who still must file Form 8843, the typical due date is June 15 in most years — always check current instructions.
• VisaVerge.com analysis recommends setting reminders for both dates to avoid skipping a required Form 8843 filing entirely.

Employment, payroll taxes, and authorized work

• Authorized jobs (e.g., on-campus roles, CPT, OPT) are U.S. source income and generally must be reported.
• During the first five calendar years in F-1 status, wages from authorized employment may be exempt from Social Security and Medicare (FICA) taxes.
• Use the federal withholding form W-4 when on payroll; see IRS guidance: https://www.irs.gov/forms-pubs/about-form-w-4.

Foreign income, Indian bank accounts, and recordkeeping

• While a student is a nonresident alien, they typically report only U.S. source income and do not include Indian bank interest on U.S. returns.
• Once the student becomes a tax resident (often after year five or earlier via the substantial presence test), they generally must report worldwide income, including:
  • Indian bank interest
  • Dividends
  • Rental income
• The checklist strongly urges keeping clean records from Indian banks:
  • Account statements and interest certificates
  • Documentation of transfers to the U.S. (gifts, loans, personal funds)
  • Proofs that explain the source of funds if questioned later

Foreign account disclosure and FATCA thresholds

• Students should watch thresholds related to foreign accounts and disclosure frameworks (such as FATCA), even though many will not meet reporting levels.
• Keep in mind that federal focus is primary, but state tax obligations can be equally important.

State taxes

• If you worked in states like California or New York while on OPT (or otherwise), you may need to file a state return regardless of federal status.
• State filing rules vary:
  • Full-year, part-year, or nonresident classifications differ by state
  • Check your state’s tax department for specific rules

Treaty benefits for Indian students

• The U.S.–India tax treaty can provide benefits, such as:
  • Excluding some scholarship income
  • Uniquely for many Indian students, the ability to claim the standard deduction even when filing as a nonresident alien (depending on facts)
• VisaVerge.com reports this relief can reduce taxes for students with mixed funding (scholarships, fellowships, part-time income).
• Always confirm current IRS guidance for the India–U.S. treaty and ensure treaty claims match your situation.

Records to keep — checklist

• I-94 records and dates of F-1 and OPT periods
• Social Security number or ITIN
• W-2s for wages
• 1099s for independent contracting (if any)
• 1098-T documents from schools (tuition reporting)
• Prior-year tax returns and Form 8843 filings
• Immigration change-of-status documents (H-1B, green card applications)
• Bank statements and transfer documentation from India

The emphasis: complete files today make future applications (H-1B, employment-based green cards, naturalization) smoother.

Transition years and dual-status complications

• If a student shifts from F-1 to H-1B mid-year, they may have a dual-status year: part nonresident, part resident.
• Dual-status filings can be complex and may require different forms and schedules for the same calendar year.
• The checklist recommends using software or advisors familiar with international student tax filings because many mainstream tools do not handle Form 1040-NR properly.
• See the IRS page for Form 1040-NR: https://www.irs.gov/forms-pubs/about-form-1040-nr, and for the standard Form 1040: https://www.irs.gov/forms-pubs/about-form-1040.

Critical reminders (bold and concise)

• Filing “nothing” is not an option: even with no U.S. income, a nonresident F-1 student must file Form 8843.
• Indian bank interest is not invisible forever: once you are a tax resident, include worldwide income.
• Ignoring the residency switch often leads to amended returns and delays (VisaVerge.com).

Practical tips and small steps that prevent bigger problems

1. File early and obtain proof of filing.
2. Store Indian bank statements year by year.
3. Save payroll records and school documentation for CPT/OPT.
4. Confirm state filing requirements — some states require returns even for short stays.
5. On departure or visa change, check whether any special “departing alien” filings apply.

Why this matters for immigration

• Clean tax and payroll records support later immigration steps:
  • H-1B petitions
  • Employment-based green cards
  • Naturalization applications
• Universities often require proof of full-time enrollment and proper CPT/OPT authorization; consistent tax paperwork helps confirm authorized employment and proper pay.

Final takeaways

• Each year, determine your tax residency status rather than assuming last year’s category still applies.
• File the correct federal and state forms for your status and situation.
• Keep strong records of both U.S. and Indian accounts and remittances.
• These steps protect you during studies, on OPT, and when moving into jobs that may lead to H-1B sponsorship or permanent residence.

For official IRS guidance referenced above:
– Substantial Presence Test: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
– Form W-4: https://www.irs.gov/forms-pubs/about-form-w-4
– Form 8843: https://www.irs.gov/forms-pubs/about-form-8843
– Form 1040-NR: https://www.irs.gov/forms-pubs/about-form-1040-nr
– Form 1040: https://www.irs.gov/forms-pubs/about-form-1040