FAQS

Q. Who should use 1040nra?

International student specifically on F1 and H1b visa who have income in the previous fiscal year.


Q. My visa status changed from F1 to H1b?

Q. Am I non resident for tax filing purpose when status changed from OPT to H1b?

You are considered non resident alien while on F1 visa status. On F1 visa, you are 'exempt' i.e. the number of days you spent in the US does not count in the substantial presence test. You will be considered non resident alien if you spent less than 183 days in 3 year period.

Example - You arrived in USA in 2013 on F1 visa. The next five years do not count. If your visa changed to H1b in 2016, then from 1st October to end of year you only spend 90 days. Hence you are considered non resident alien and would need to file 1040-NR.


Q. What is the substantial presence test?

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  • 31 days during the current year, and
  • 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
    • All the days you were present in the current year, and
    • 1/3 of the days you were present in the first year before the current year, and
    • 1/6 of the days you were present in the second year before the current year.
Example - You were physically present in the U.S. on 120 days in each of the years 2012, 2013, and 2014. To determine if you meet the substantial presence test for 2014, count the full 120 days of presence in 2014, 40 days in 2013 (1/3 of 120), and 20 days in 2012 (1/6 of 120). Since the total for the 3-year period is 180 days, you are not considered a resident under the substantial presence test for 2014.
Example - You are considered as a non resident (f1 visa) from 2011-2015. Starting from 01/01/2016, you will start counting your days. If you meet the Substantial Presence Test in 2016, you will be considered a US resident for tax purposes and file a Form 1040 for your tax year of 2016. Most likely in the 6th year i.e. 2016 since you would have only spend 4 months (120 days) while filing taxes you would be considered non resident for tax filing purpose.


Q. I am on F1 / CPT / OPT but FICA and SSN has been deducted?

Q. Social Security and Medicare tax refund while on F1 student status?

You are exempt from FICA and SSN taxes while on F1 / OPT / CPT status.
To get a refund back, first ask the employer to refund the tax deducted back to you. If they don't you would need to file form 843 and 8316 for refund from IRS. These forms are independent from tax returns. We currently do not support them but they are very easy to file.

Include the following in your application:

  • form 843 www.irs.gov/pub/irs-pdf/f843.pdf
  • form 8316 www.irs.gov/pub/irs-pdf/f8316.pdf
  • a copy of the W2s showing withheld social security taxes
  • a copy of the pages in your passport showing your visa
  • a copy of your I94 card
  • a copy of your I20 (if applicable) to show CPT or OPT status
  • a copy of your EAD card (if applicable)
  • a statement that you requested a refund from your employer but were unsuccessful (the letter you received from your employer or your own statement)


Q. What forms do I need to file as a non resident?

As a non resident alient on F1 or H1b status you need to file different from resident aliens.

  • Federal - 1040 NR
  • California - 540 NR Long/Short
  • Massachutsetts - form-1 NR/PY
  • New York - IT 203
  • North Carolina - D400
  • Oregon - OR40


Q. I filed my returns using 1040nra but deleted the email?

We are a cloud based company, so you do not have to worry. We securely store your tax documents in the cloud which you can access anytime. For post filing instructions please follow here or direct link below


Q. I do not see the option to select my state in 1040nra?

Currently we only support California and New York. You do not need to file state taxes if you have income from the following states - Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.


Q. What are the benefits of using 1040nra?

  • We are specifically built for international students on F1 and H1b visa
  • We are super competetive in the market and provide maximum deductions
  • Our refund policy is no question asked if you are not satisfied with our service
  • You can prepare multiple state taxes in one go if you worked or interned in different state
  • We securely store your tax documents in the cloud so you can come back anytime


Q. Do you support capital gains?

Currently we have provisions to enter calculated capital gain but do not prepare Schedule D for you. We have created a set of instructions to calculate capital gain by filling Schedule D you can follow - here


Q. Can I take deductions for student loan from different country?

Yes. You are allowed to take deductions for interest on student loans from another country, as long as the loan meets the requirements of being a student loan (a qualified student loan is a loan you took out solely to pay qualified higher education expenses) and you have legal obligation to make the loan payments. You have to attach year end statement which shows the interest you paid. In USA, banks provide Form 1098-E which should be attached with your returns. You can deduct up to $2,500 of student loan interest paid in a given year. As with many tax rules, there is an income limit to this deduction. Your modified adjusted gross income cannot be more than $80,000


Q. Can I deduct rent for Massachusetts state as F1 stundent or as non resident?

A deduction is allowed for rent paid by the taxpayer during the tax year for a principal residence located in Massachusetts. This deduction

  • Is limited to 50% of the rent paid and
  • Cannot exceed a total deduction of $3,000
The deduction must be for rent that the taxpayer paid to a landlord for the rental or lease of the taxpayer's principal residence in Massachusetts. Nonresidents and part-year residents are allowed a deduction equal to 50% of the rent paid if their residence is located in Massachusetts and the taxpayer's principal residence. An example of nonresidents example would be migrant workers.

The definition of principal residence includes:
  • Mobile home
  • Trailer park site rental
  • Rooming house occupancy: If a rental agreement exists, written or oral, creating a landlord-tenant relationship
  • Hotel or Motel
A principal residence doesn't include:
  • Apartment or house of a student or faculty member who has a principal residence elsewhere
  • Apartment or house of a nonresident who has a legal residence in another state or country
  • Dorm room
  • Hotel, motel, or rooming house occupancy where no rental agreement exists
Note - If 2 or more persons jointly rent a unit, each occupant is entitled to a deduction if each is using it as his or her principal residence. The deduction is based on the amount of rent each person paid. Click here for more info


Q. I am a F1 student in Oregon, what is my residency status?

From the Oregon state website

www.oregon.gov/DOR/programs/individuals/Pages/what-form.aspx

You are considered a full-year resident if all of the following are true:

  • You think of Oregon as your permanent home.
  • Oregon is the center of your financial, social, and family life.
  • Oregon is the place you plan on coming back to when you're away.


Q. What are the limitations of this software?

The following are the limitations

  • Currently we only support tax filing for singles on F1 or H1b
  • You can only prepare Federal, California, Massachusetts, New York, North Carolina and Oregon taxes
  • Capital gain calculation is not supported and we do not prepare schedule D for you
  • Deductions like moving expense, student loan and in some case rental deductions are only allowed


Q. What is the tax treaty between USA and China?

Q. What is the tax treaty between USA and China?

Q. Tax treaty for international students in USA?

Based on

  • Article 21(2) tax treaty Indians can claim standard deduction
  • Article 20(c) Chinese individuals can claim $5000 with no limit


Q. I am on F1 visa and married. My spouse is on F2 visa and does not have SSN?

If both you and your spouse are Non Residents, you cannot file a joint tax return. Each of you have to file separate Non Resident Tax Returns or as Married but filing separately.
If one of you is a Resident, then you can choose to a joint tax return.

If your spouse does not have SSN or ITIN, you can apply for ITIN by filling form W-7.


Q.What is Massachusetts requirement for Minimum Creditable Coverage for health insurance?

Minimum Creditable Coverage (MCC) is the minimum level of benefits that you need to be considered insured and avoid tax penalties in Massachusetts. These benefits include:

  • Coverage for a comprehensive set of services (e.g. doctors visits, hospital admissions, day surgery, emergency services, mental health and substance abuse, and prescription drug coverage).
  • Article 20(c) Chinese individuals can claim $5000 with no limit
  • Doctor visits for preventive care, without a deductible.
  • A cap on annual deductibles of $2,000 for an individual and $4,000 for a family.
  • For plans with up-front deductibles or co-insurance on core services, an annual maximum on out-of-pocket spending of no more than the annual limit set by the IRS for high deductible health plans. In 2014, out-of-pocket costs are limited to $6,350 for an individual plan and $12,700 for a family plan.
  • No caps on total benefits for a particular illness or for a single year.
  • No policy that covers only a fixed dollar amount per day or stay in the hospital, with the patient responsible for all other charges.
  • For policies that have a separate prescription drug deductible, it cannot exceed $250 for an individual or $500 for a family.
For more information visit https://www.mass.gov/info-details/health-care-reform-for-individuals#minimum-creditable-coverage-(mcc)-