Pay and Important Tax Information
Your host organization will pay according to the established pay policy and will provide a statement showing the number of hours of training, pay, and the taxes and other deductions taken out of your paycheck.
Host employers are required to adhere to U.S. wage and hours laws. https://www.dol.gov/whd/regs/compliance/hrg.htm
Intern/Trainees are to be scheduled a minimum of 32 hours per week, if at any time you are not scheduled 32 hours per week, contact AHA immediately so we may work with the host employer to resolve.
HOW TAXES WORK
As a foreign visitor receiving paid training on a J-1 visa, you are required to pay some (but not all) of the same taxes U.S. citizens pay. Roughly 10% to 15% of your salary will be withheld for federal income tax. Some states and cities also charge income tax, which would could be an additional 5% to 8%. While your host organization should withhold the correct taxes, it is wise to review your first paycheck to make sure there are no errors and the tax withholding is correct.
What you must pay:
- Federal income tax
- State income tax (if applicable)
- Local or city income tax (if applicable)
What you do not have to pay:
- Social Security and Medicare tax (FICA)
- Federal unemployment tax (FUTA)
If you see deductions that say FICA, FUTA, S.S. or Social Security, please notify your employer promptly. If your employer is unable to issue a refund, contact the Internal Revenue Service Center and request IRS Form 843 Claim for Refund and Request for Abatement. You will need to submit the completed IRS forms to the Internal Revenue Service Center. Please note: some states may deduct state unemployment taxes, which you are required to pay.
New Tax Information
Starting January 1, 2018 (until 2026) the personal exemption has been suspended. In the past, students may have received refunds from the federal government. Due to the change (IRS Publication 515) you will not receive any federal refunds if you have earned less than $9,525. State taxes are not affected by this act, and are dependent on the state you worked in. You may still be eligible for a State refund regardless of the amount you earned.
I-9 Form
When you arrive at your host company, you must complete an I-9 Employment Eligibility Verification Form, which notifies the federal government that you are allowed to work in the United States. You need to show your passport, I-94 printout or card, J-1 Visa, and DS-2019 Form to your employer when completing this form. You are only required to fill out Section 1. Your employer will complete Section 2. Remember to fill out Section 1 using your U.S. work address.
Form W-4 Expandable Box
For tax purposes, you are required to fill out a W-4 Employee’s Withholding Allowance Certificate as soon as you start working. Your employer will give you a W-4 Form. It is your responsibility to complete and submit the W-4 Form to your employer. Based on the information you provide on the W-4 Form, your employer will calculate the amount of federal, state, and local taxes to be withheld from your paycheck.
HOW TO COMPLETE THE W4 FORM
Your host organization will ask you to fill out a W4 form (shown below) before you begin your program. If your host organization completed this form for you, show these instructions to your employer. Following the instructions below will insure that you are in compliance with IRS regulations and have the proper amount withheld.
INSTRUCTIONS
Note: The instructions below may not be used by married individuals from Canada and Mexico or students and business apprentices from India.
Use the instructions in Publication 15 (2020), (Circular E), Employer’s Tax Guide, chapter 9 Withholding From Employees’ Wages, Non-resident employee to calculate the amount withheld and Notice 1392 - Supplemental Form W-4 Instructions for Nonresident Aliens.
Complete in full Step 1. On line (c), Step 1, check only “single or married filing separately” marital status (regardless of marital status)
In the blank space under line 4 (c) enter “NRA”
Complete Step 5, dates, employer’s details and sign in the relevant spaces and leave the rest of the form blank (Page 3).
Source: www.irs.gov/pub/irs-pdf/n1392.pdf
For more information related to the special Form W-4 instructions for nonresident alien employees, including exceptions, refer to Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens.