What if a students only source of income is a scholarship? Isn that exempt from tax?
Scholarships from foreign sources are exempt from U.S. tax in their entirety. However, only the portion of U.S. source scholarship used for tuition, fees, and required books and equipment is exempt from tax. The United States taxes any portion of a U.S. source scholarship granted or used for living expenses, room, or board. Northwood University will send Form 1042-S to nonresident alien scholarship recipients who receive taxable scholarships in the calendar year. A copy of this form must be attached to the U.S. tax return. 5. If my country has a tax treaty with the U.S. does that mean I don’t have to file any tax forms? No. In order to claim tax treaty benefits, you must file federal income tax Form 8843 and either Form 1040NR-EZ or Form 1040-NR. 6. Will I be subject to U.S. social security taxes? F-1, J-1, M-1, and Q-1 nonresident aliens are exempt from social security and Medicare taxes on authorized employment. F-1, J-1, M-1, and Q-1 resident aliens are not exempt. A foreign student
