Every spring, hundreds of thousands of international students in the United States face one of the most confusing obligations of living abroad: filing a U.S. tax return. The stakes are higher than many realize. Using the wrong form, misunderstanding your residency status, or overlooking treaty benefits can lead to IRS penalties, overpaid taxes, and even complications with future visa applications. This guide walks through the six most common tax filing mistakes international students make during the 2026 filing season (for the 2025 tax year) and explains exactly how to avoid each one.
Filing the Wrong Form Can Trigger an IRS Audit
One of the most common and costly mistakes is filing Form 1040 (the resident return) when you should be filing Form 1040-NR (the nonresident return). The IRS cross-references your visa status with tax records. Filing the wrong form can result in penalties, delayed processing, and problems with future visa applications or green card petitions. If you’ve already filed incorrectly, you must amend using Form 1040-X — which can only be submitted by mail.
TurboTax Does Not Support Form 1040-NR
One of the most frequent reasons for misfiling: popular tax software like TurboTax does not prepare Form 1040-NR and will default to the resident Form 1040. If you’re a nonresident alien, use Sprintax (TurboTax’s partner for nonresidents), Glacier Tax Prep, or consult a CPA experienced with nonresident returns.
Mistake 1: Filing Form 1040 Instead of Form 1040-NR
The single most consequential tax mistake an international student can make is filing the wrong return. The IRS maintains two entirely separate individual income tax forms, and which one you use depends on your tax residency status — not your visa type, not how long you’ve physically been in the country, and not what software your roommate recommended. Form 1040 is for U.S. citizens and resident aliens. Form 1040-NR is for nonresident aliens. Most international students on F-1, J-1, M-1, or Q visas are nonresident aliens for their first five calendar years in the United States and must file Form 1040-NR.
The differences between these two forms are not cosmetic. Form 1040 requires you to report worldwide income — every dollar earned anywhere on the planet, including money earned in your home country. Form 1040-NR only requires reporting of U.S.-sourced income, such as wages from a campus job, on-campus research assistantship, or OPT employment. Filing Form 1040 when you should have filed 1040-NR means you may incorrectly report (or fail to report) foreign income, claim credits you’re not entitled to (like the Earned Income Tax Credit), or miss deductions that are specific to nonresidents. Conversely, if a nonresident accidentally claims the standard deduction on Form 1040, the IRS may adjust the return and assess penalties — unless the student is from India and qualifies under Article 21 of the U.S.-India tax treaty (discussed later in this article).
Form 1040 vs. Form 1040-NR: Key Differences
| Feature | Form 1040 (Resident) | Form 1040-NR (Nonresident) |
|---|---|---|
| Who files | U.S. citizens, green card holders, resident aliens | Nonresident aliens (most F-1/J-1 students in first 5 years) |
| Income reported | Worldwide income (U.S. and foreign) | U.S.-sourced income only |
| Standard deduction | $15,750 (single, 2025) | Not available (exception: India treaty students) |
| Filing status options | Single, MFJ, MFS, HOH, QSS | Single or MFS only (no joint filing) |
| Earned Income Tax Credit | Available if eligible | Not available |
| Education credits | American Opportunity, Lifetime Learning | Generally not available |
| Tax treaty benefits | Generally not claimed | Can reduce or eliminate tax on specific income |
| FICA exemption | Subject to Social Security & Medicare | Exempt (F-1/J-1/M-1 in first 5 years) |
| Filing deadline | April 15, 2026 | April 15, 2026 (June 15 if no withheld wages) |
If you filed the wrong form, file Form 1040-X (Amended U.S. Individual Income Tax Return) as soon as possible, attaching the correct return. Amended returns must be mailed — they cannot be e-filed for form-type corrections. You generally have three years from the original filing date to amend for a refund.
Mistake 2: Misunderstanding the Substantial Presence Test
The substantial presence test is the formula the IRS uses to determine whether a foreign national is a “resident alien” or a “nonresident alien” for tax purposes. It’s important to understand that this is purely a tax classification — it has nothing to do with your immigration status, your visa type, or whether USCIS considers you a “resident” for any other purpose. You can be a nonresident for tax purposes while living full-time in the United States on an F-1 visa.
Under the substantial presence test, you are considered a U.S. resident for tax purposes if you have been physically present in the country for at least 31 days during the current calendar year and at least 183 days during a three-year lookback period, calculated using a weighted formula: all days in the current year, plus one-third of the days in the prior year, plus one-sixth of the days in the year before that. However, here is where international students consistently get confused: F-1, J-1, M-1, and Q visa holders are classified as “exempt individuals” for the purpose of this test, meaning their days of physical presence do not count toward the 183-day threshold for a specific period. For F-1 and J-1 students, this exempt period lasts for five calendar years. Even a partial year counts as a full year — if you arrived in August 2021, your five exempt years are 2021, 2022, 2023, 2024, and 2025.
“Exempt Individual” ≠ “Exempt From Tax”
The IRS term “exempt individual” is misleading. It does not mean you are exempt from paying U.S. taxes. It only means your days of physical presence are not counted toward the substantial presence test. You may still owe federal income tax on U.S.-sourced income. Many students misread IRS guidance and mistakenly believe they owe no taxes at all during their exempt period.
🔢 How the 5-Year Exempt Rule Works
🎓 F-1/J-1 Students
🔬 J-1 Non-Students (Teachers/Researchers)
A critical detail that students frequently overlook: Form 8843 (Statement for Exempt Individuals) must be filed every year you claim exempt individual status, even if you had no income and are not filing a tax return. If you fail to timely file Form 8843, you may lose the ability to exclude your days of presence under the exempt individual rule — which could cause you to fail the substantial presence test and become a resident alien for tax purposes retroactively. The deadline is April 15, 2026 if you have income and are filing with your 1040-NR, or June 15, 2026 if you had no U.S.-sourced income.
After Year 5: Your Status May Change
Once your five exempt calendar years expire, your days begin counting toward the substantial presence test. If you arrived in 2020 and are still in the U.S. on an F-1 visa in 2026, your exempt period ended on December 31, 2024. Starting January 1, 2025, every day of physical presence in the U.S. counts. If you were present for at least 183 days in 2025, you may now be a resident alien for tax purposes for the 2025 tax year — meaning you file Form 1040, report worldwide income, and may owe FICA taxes. This transition catches many long-term students off guard.
Mistake 3: Claiming the Standard Deduction When Not Eligible
For the 2025 tax year (filed in 2026), the standard deduction for a single filer is $15,750. This is one of the most valuable deductions available — it directly reduces your taxable income before any tax calculation begins. However, nonresident aliens generally cannot claim the standard deduction. This is one of the most frequent errors made by international students who use general-purpose tax software or follow advice intended for U.S. residents.
When a nonresident alien files Form 1040-NR, they must itemize their deductions using Schedule A of Form 1040-NR. The itemized deductions available to nonresidents are limited — primarily state and local income taxes, charitable contributions to U.S. organizations, and casualty and theft losses from a federally declared disaster. Most international students working part-time campus jobs have very limited itemized deductions, often amounting to just a few hundred dollars in state taxes withheld from their paychecks. The temptation to claim the $15,750 standard deduction instead is understandable, but doing so as a nonresident (unless you qualify for the India treaty exception) will trigger IRS scrutiny.
Another common point of confusion involves the personal exemption. Before 2018, nonresident aliens could generally claim one personal exemption of $4,050. The Tax Cuts and Jobs Act of 2017 eliminated the personal exemption for tax years 2018 through 2025, and the One Big Beautiful Bill Act signed in July 2025 made this elimination permanent. So for the 2025 tax year, there is no personal exemption to claim — for residents or nonresidents.
Mistake 4: Missing Tax Treaty Benefits — Especially the India-U.S. Treaty
The United States has income tax treaties with dozens of countries, and many of these treaties contain provisions that can significantly reduce the tax burden on international students and scholars. Yet a surprising number of eligible students either don’t know their treaty exists or don’t know how to claim the benefits. This is money left on the table every filing season.
Tax treaty benefits vary widely by country. Some treaties exempt scholarship and fellowship income from U.S. taxation. Others exempt a certain amount of compensation for personal services. A few provide especially broad benefits. The most notable of these is Article 21 of the U.S.-India Income Tax Treaty, which provides Indian students and business apprentices with a unique advantage that no other country’s treaty offers in exactly the same way.
🇮🇳 Article 21: The India Treaty Standard Deduction
Under Article 21(2) of the U.S.-India Income Tax Treaty, Indian students and business apprentices who are temporarily present in the United States for the purpose of education or training are treated, for certain purposes, as though they were U.S. residents — even though they file Form 1040-NR as nonresident aliens. The most significant practical benefit is that Indian students can claim the standard deduction ($15,750 for single filers in the 2025 tax year), which is generally not available to any other nonresident alien filers. This single provision can reduce an Indian student’s tax bill by hundreds or even thousands of dollars compared to students from other countries with similar income levels.
To claim this benefit, you write the words “Standard Deduction Allowed Under US/India Income Tax Treaty” on Schedule A of Form 1040-NR in the space provided for state and local income taxes. You cannot claim both the standard deduction and itemized deductions — you must choose one or the other. In the vast majority of cases, the standard deduction of $15,750 will far exceed the value of any itemized deductions available to a student, making this a straightforward choice. The IRS confirmed these procedures in Revenue Procedure 93-20, and they remain in effect for the 2025 tax year.
It’s important to note what Article 21 does not do: it does not make Indian students into U.S. residents for tax purposes. They still file Form 1040-NR, still report only U.S.-sourced income, and are still subject to nonresident alien rules for most purposes. The treaty simply extends certain specific benefits — the standard deduction being the most valuable — to this category of filers. Indian students also cannot file joint returns (unless married to a U.S. citizen who makes a special election) and cannot use the head of household filing status.
| Country | Treaty Article | Key Student Benefit | Standard Deduction? |
|---|---|---|---|
| India | Article 21(2) | Standard deduction; exempt on payments from India for maintenance/education | Yes — $15,750 |
| China | Article 20 | Exempt on payments from outside U.S. for maintenance/education; $5,000 services exemption | No |
| South Korea | Article 21 | Exempt on payments from outside U.S. for maintenance/education | No |
| Canada | Article 15 | Up to $10,000 in personal services income exempt (if total under $10,000) | No |
| Barbados / Jamaica | Various | May elect to be treated as U.S. resident (file Form 1040) | Yes (via election) |
How to Claim Treaty Benefits on Your Return
To claim a tax treaty benefit, report both the income and the treaty benefit on Form 1040-NR. If the treaty provision you’re claiming requires it, attach Form 8833 (Treaty-Based Return Position Disclosure). For employment income exemptions, submit Form 8233 to your employer before the income is earned so they can reduce withholding. For scholarship exemptions, submit Form W-8BEN to your university’s payroll office. Always check IRS Publication 901 for your specific country’s treaty provisions.
Mistake 5: Not Recovering Wrongly Withheld FICA Taxes
Under the Federal Insurance Contributions Act (FICA), U.S. employers are generally required to withhold Social Security tax (6.2% of wages) and Medicare tax (1.45% of wages) from employee paychecks. Combined, this amounts to 7.65% of your gross earnings. However, nonresident alien students on F-1, J-1, or M-1 visas are exempt from FICA on wages earned from services performed within the United States, provided the employment is authorized and connected to the visa’s purpose. This exemption applies for as long as the student remains a nonresident alien for tax purposes — typically the first five calendar years.
The problem is that many employers — particularly off-campus employers of students on OPT or CPT — are unfamiliar with this exemption. Their payroll systems are configured to withhold FICA from all employees by default, and unless someone in HR specifically flags the student’s nonresident status, Social Security and Medicare taxes get deducted from every paycheck. For a student earning $40,000 on OPT, that’s over $3,000 in taxes that should never have been withheld. Many students see the deductions on their pay stubs, assume they’re mandatory, and never question them. Others discover the error at tax time but don’t know how to get the money back.
📋 FICA Refund Process: Step by Step
💰 How to Recover Wrongly Withheld Social Security & Medicare Taxes
After Year 5: The Student FICA Exception
Once you become a resident alien for tax purposes (typically after year 5), you generally become liable for FICA taxes. However, there is a separate exemption under IRC Section 3121(b)(10) — the “student FICA exemption” — that applies to all students (regardless of citizenship or tax residency) who are enrolled at least half-time and work for the school, college, or university where they study. This exemption only covers on-campus employment — off-campus OPT/CPT jobs with other employers do not qualify.
Mistake 6: Ignoring State Tax Obligations
Federal taxes get most of the attention, but many international students are surprised to learn that they may also owe state income taxes. The United States has 50 states, and 41 of them impose some form of personal income tax. If you earned income in a state that taxes income, you almost certainly have a state filing obligation — and the forms, deadlines, and rules vary from state to state. Your federal tax residency status (resident vs. nonresident alien) does not automatically determine your state tax residency status, which adds another layer of complexity.
Nine states currently levy no personal income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you study and work exclusively in one of these states, you likely have no state income tax return to file. Washington is a partial exception — it imposes a capital gains tax on high earners, but does not tax regular wages. For everyone else, the state where you earned income will generally require a nonresident state tax return. In many cases, even a single day of work in a state can trigger a filing requirement, though the amount of tax owed may be minimal.
Some states add additional complications for international students. Maryland, for example, considers international students to be state residents for tax purposes even though they are nonresident aliens federally. This means a Maryland-based international student files as a nonresident on their federal Form 1040-NR but as a resident on their Maryland state return. Other states like California, New York, and Massachusetts have their own nonresident tax forms that must be filed separately. The filing deadline for most states aligns with the federal deadline of April 15, 2026, though a few states set different dates — Iowa’s state return, for instance, is due April 30, 2026.
- Check your state’s specific nonresident form — Each state has its own (e.g., IT-203 in New York, 540NR in California, D-400 + Schedule PN in North Carolina)
- File state and federal returns separately — They go to different agencies with different rules
- Report only income earned in that state — Nonresidents are generally only taxed on income sourced within the state
- Check if your tax treaty applies at the state level — Some states honor federal treaty provisions, others do not
- Use nonresident-specific software — Sprintax handles both federal and state nonresident returns
- Assume no state tax is owed — Even on-campus wages may be subject to state income tax
- Confuse federal and state residency — You can be a nonresident federally but a resident for state tax purposes (e.g., Maryland)
- Skip your state return — State tax authorities share data with the IRS and can assess penalties independently
- Rely on the federal 1040-NR alone — Your state return is a separate legal obligation
- Forget to deduct state taxes on your federal return — State income taxes paid can be an itemized deduction on Schedule A of 1040-NR
The Complete Filing Checklist for International Students
With so many forms, deadlines, and rules to track, it helps to have a single reference list. The checklist below covers the key steps for the 2026 filing season (2025 tax year) and applies to most international students on F-1 or J-1 visas who are still within their first five calendar years in the United States. If your situation involves dual-status filing, investment income, self-employment, or a visa status change mid-year, consider consulting a tax professional who specializes in nonresident returns.
📋 2026 Filing Season Checklist (2025 Tax Year)
📅 Key Deadlines for 2026 Filing Season
Frequently Asked Questions
You file Form 1040-NR. F-1 students are considered “exempt individuals” for their first five calendar years in the United States. During this period, your days of presence do not count toward the substantial presence test, so you remain a nonresident alien for tax purposes. You must also attach Form 8843 to your return (or file it separately if you had no income).
TurboTax does not support Form 1040-NR and automatically prepares a resident return (Form 1040). If you’re a nonresident alien, this is incorrect. You should file an amended return using Form 1040-X, attaching a corrected Form 1040-NR. Amended returns must be mailed to the IRS — they cannot be e-filed for this type of correction. You generally have three years from the original filing date to amend. Going forward, use Sprintax (TurboTax’s official partner for nonresident returns) or Glacier Tax Prep.
Yes. Under Article 21(2) of the U.S.-India Income Tax Treaty, Indian students and business apprentices can claim the standard deduction ($15,750 for single filers in the 2025 tax year), even though they file as nonresident aliens on Form 1040-NR. Write “Standard Deduction Allowed Under US/India Income Tax Treaty” on Schedule A. You cannot also claim itemized deductions — it’s one or the other. This benefit is unique to the India treaty; students from most other countries cannot claim the standard deduction.
If you are a nonresident alien on an F-1, J-1, or M-1 visa (within your first five years), you are exempt from FICA taxes under IRC Section 3121(b)(19). If your employer withheld these taxes in error, first ask your employer’s payroll department for a refund. If they refuse, file Form 843 and Form 8316 with the IRS, along with a copy of your W-2, visa, I-94, and employment authorization documents. Mail to IRS Ogden, UT 84201-0038. Refunds can take up to six months.
Yes. Even if you had zero U.S.-sourced income, you must still file Form 8843 if you are claiming exempt individual status to exclude your days of presence from the substantial presence test. Failure to file Form 8843 can cause you to lose your exempt status, potentially making you a resident alien for tax purposes. The deadline for Form 8843 alone (with no income) is June 15, 2026.
This depends on when the status change occurs and how many exempt years you’ve used. If you switch to H-1B mid-year and you’ve exhausted your five exempt calendar years, you may become a resident alien for the remainder of the year, making you a dual-status taxpayer. Dual-status returns are complex: you typically file Form 1040 labeled “Dual-Status Return” with Form 1040-NR attached as a statement. You cannot take the standard deduction for the dual-status year, and you cannot file a joint return (unless making a special election). Consult a tax professional for dual-status situations.
It depends on what the scholarship covers. Amounts used for tuition and required course-related fees and expenses at an eligible educational institution are generally tax-free. However, scholarship amounts used for room, board, travel, or other non-qualified expenses are taxable and must be reported as income on Form 1040-NR. Some countries have tax treaties that exempt scholarship income — for example, the China treaty (Article 20) may exempt certain scholarships. Check your specific treaty provisions.
You need either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) to file Form 1040-NR. If you’ve worked in the U.S., you should already have an SSN. If you haven’t worked but need to file (e.g., for a taxable scholarship), you can apply for an ITIN using Form W-7, submitted alongside your tax return. You can mail your passport as identification (it will be returned in 60–90 days), visit a Taxpayer Assistance Center for in-person verification, or use a Certified Acceptance Agent.
No. Texas is one of nine states with no personal income tax. If you earned all of your income in Texas, you have no state income tax filing obligation. The other no-income-tax states are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming. However, if you also earned income in another state that does have an income tax (for example, through a remote internship), you may need to file a return in that state.
It can. USCIS considers tax compliance as part of “good moral character” determinations in adjustment of status (green card) applications. Filing the wrong form, claiming benefits you’re not entitled to, or failing to file altogether can raise red flags during immigration processing. Additionally, if the IRS assesses penalties or back taxes due to incorrect filing, this may create issues with demonstrating financial stability or adherence to U.S. laws. Filing correctly from the start is the safest approach for both your tax obligations and your immigration record.
📚 Official Sources
- IRS — Taxation of Nonresident Aliens
- IRS — Substantial Presence Test
- IRS — Foreign Student Liability for Social Security and Medicare Taxes
- IRS — Nonresident: Figuring Your Tax (Standard Deduction & India Treaty)
- IRS — Foreign Students, Scholars, Teachers, Researchers and Exchange Visitors
- IRS — Tax Treaties
- IRS Publication 519 — U.S. Tax Guide for Aliens
- IRS — Instructions for Form 843 (Claim for Refund)
This article is for informational purposes only and does not constitute legal or tax advice. Tax laws change frequently, and individual situations vary. Always consult with a qualified tax professional or CPA experienced in nonresident alien taxation for guidance specific to your circumstances. Information is current as of February 2026 for the 2025 tax year.
