INTERNATIONAL - FAQ’s

What is a FNIF form and why do I need to submit it?

• FNIF stands for Foreign National Information Form.
• List of required documents needed includes (Passport, Visa, I-94, I20 or DS2019, Social Security Number (SSN), MSU ID).
• Payroll can verify your SSN is updated for various tax documents.
• A tax analysis will be processed in our Tax Navigator Program to determine eligibility for tax exemptions.

Do I have to pay taxes if I am not a U.S. citizen?

You must file Form 1040-NR, U.S. Nonresident Alien Income Tax Return if you have income that is subject to tax, such as wages, tips, scholarships, and fellowship grants, dividends, etc.

Who is considered a U.S. Citizen for tax purposes?

United States Citizen - Liable for US income taxes whether you are a citizen who was born in the United States or outside of the United States with at least 1 parent who is a US Citizen. If you are a naturalized citizen.

Who is considered a non-U.S. person for tax purposes?

If you are living and working in the U.S. as a nonresident alien, you may be required to file a federal tax return. The Internal Revenue Service (IRS) considers you a nonresident alien if you are not a lawful permanent resident (Green Card holder) or have not passed their substantial presence test.

What is the difference between an ITIN and an SSN?

• SSN (Social Security Number)- To be employed in the U.S. you must apply for a Social Security Number. This is how taxable wages are reported to the IRS.
• ITIN (Individual Taxpayer Identification Number) - Is not to be used for employment purposes; it is only used for tax purposes. If you are receiving a scholarship or fellowship, not employed with taxable wages being paid, then an ITIN is acceptable.

NOTE: It is extremely important to submit your SSN in a timely fashion. SSNs are included in the FNIF documents requested by payroll. Documents received on or before (Dec 1st) will provide payroll enough time to have your SSN updated in our system prior to year-end tax forms being processed. Incorrect SSN’s will delay your tax filing, and you may need to file an extension with the IRS until a corrected W2-C can be processed. This “will not” happen prior to the Tax filing deadline.

Do foreign workers pay taxes in the U.S.?

A nonresident employee (for tax purposes) must pay taxes on any income earned in the U.S., unless the person can claim tax treaty benefits. This applies to international students, faculty and staff.

Who qualifies for a Tax Treaty?

• Salaried Employees on a J-1 Research / Scholar Visas may be eligible for Tax Treaties offered through MSU.
• Employees on F-1 or J-1 Student Visas may be eligible for a Tax Treaty which they can claim at year-end when filing Tax Returns with the IRS. These individuals would work with a certified tax professional to take advantage, if eligible at that time.

What is the IRS Federal withholding tax rate for non-residents?

• The IRS regulation for non-resident student, researcher, or scholar who are temporarily present in the United States on an "F-1", or "J-1" visa will pay a higher rate than those who are “residents” for tax purposes. There isn’t a set percentage. That rate depends on which tax bracket you may fall into. Since hourly employees’ wages may fluctuate, their federal tax withholding will also fluctuate.
• When you file your tax return and discover that you have been over withheld, the IRS will refund the amount over withheld back to you.

What other taxes will I see withheld as a non-resident?

The State of Michigan withholds a tax rate of 4.25% and possibly local taxes depending on where you live and work.

What is FICA/Medicare and why is it being withheld from my pay?

• Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes also known as Social Security taxes, and the hospital insurance taxes also known as Medicare taxes. Different rates apply for these taxes.
• Everyone has Social Security (FICA) & Medicare taxes withheld from their wages - Rates are FICA 6.2% and Medicare 1.45%, totaling 7.65%.
• Exemptions from FICA/Medicare are:
  1. Student and Graduate Assistants, enrolled in the minimum required credits each semester,
     • 6 Credits for Undergrads
     • 5 Credits for Masters
     • 3 Credits for Doctoral
  2. International Employees:
     • Some International Students, International Researchers, and Professors on F-1 or J-1 Visas.
     • Please refer to the F1/J1 Visa’s in the International Related section

Why are my Non-resident withholding amounts different from my U.S. coworkers?

Employers are instructed to withhold an additional amount from nonresident wages based on IRS regulations. This amount is built into the payroll system’s tax table.

Why are my Non-resident withholding amounts different from my coworkers who are also Non-Residents?

Reasons vary case-by-case, FNIF documents may not have been submitted, individual has passed the substantial presence test (SPT) or, they are from a country that allows something other than “single” to be claimed on their Federal W-4 form.

Why can’t I change my status on the Federal W-4?

• IRS Regulations require employers to withhold Non-Residents Federal taxes as “Single” regardless of marital status or dependents. This is only for W-4 tax withholding purposes; you may claim dependents when filing your year-end tax returns.
• The only time an international employee can claim something different:
  • They have passed the substantial presence test (determined by processing FNIF documents) and are now considered a Resident Alien for tax purposes.
  • They are a Citizen of India who are eligible to claim married or Head of Household.
  • Resident status has changed to Permanent Resident or Citizen of the U.S.

How do I get my FICA refund?

• You must submit your FNIF packet before any refund can be made,
• Send a written request to payroll. They will verify your FNIF documents have been received/processed and determine the results.

NOTE: Timing is of the essence; documents received on or before (Dec 1st) will provide payroll enough time to process a refund of current year taxes if necessary. The refund will be issued to you on your next pay within the same calendar year if exempt.
NOTE: FICA refunds from the previous year take considerable time and effort on all parties concerned. You will be required to submit the FNIF documents and have the tax analysis completed. If you are found to be exempt, this requires written consent stating you will not pursue the refund from the IRS and will be requesting MSU to refund. A corrected W-2C will be processed for the FICA / Medicare taxes and wages. The refund will be processed via the accounting department. This process can take months to complete.

Do I need to supply the FNIF and requested documents if I’m not on an F-1 or J-1 Visa?

• The following documents are needed for Miscellaneous Visa Types:
  • I-797 showing Visa Status and dates
  • Social Security Card (Showing Name & Number)
  • MSU ID
• United States Citizen:
  • Copy of Naturalization Certificate or U.S. Passport along with MSU ID
• Permanent Resident:
  • Copy of Green Card along with MSU ID

How do I file my tax return?

• You must do this yourself or recruit the help of a certified tax professional. The Payroll Office does not assist employees with preparing tax returns.
• For help and information, please refer to the following websites and sources:
  • Internal Revenue Service – Federal Income tax www.irs.gov
  • Michigan Dept. of Treasury- Michigan Income tax www.michigan.gov/taxes
  • MSU Law School for information about their tax clinics
    • Phone: 517-432-6800 Website: www.law.msu.edu/clinics/tax/seminars/
    • Email the Tax Clinic at taxclinic@law.msu.edu. Please be patient in waiting for a response. The demand for this service is high, and they will do their best to respond as timely as possible.

NOTE: If you still need help preparing your tax return or getting your refund, consult with a professional tax adviser of your choice.