What is Form 1042-S and Form W-2 for Non Resident Alien Taxes?

[Administrator]

What is Form 1042-S and Form W-2 to report income and Taxes for International Students F1,J1 visas and Non Resident Aliens?

International students and Non Resident aliens may get Form 1042-S, Form W-2 depending upon their income type.

Form W-2:

The W-2 form is also known as a Wage and Tax Statement.

If you are employed in the U.S. for any period of time , each employer for whom you worked is required to report your earnings to both you and the Internal Revenue Service (IRS).

By law, W-2s must be mailed no later than January 31.

If you worked during 2005, whether off campus or on-campus and have not received your form W-2 by February 1, contact your former employer right away. It's possible that they do not have your address.

You will be required to include a copy of each W-2 from with your federal and state income tax forms.

The IRS computer system will match the income with what they have received from the employer.

Different kinds of taxes are withheld by employers. The W-2 form has boxes for reporting withholding of Federal Income Tax (box 2), Social Security Tax (box 4), Medicare Tax (box 6), State Income Tax (box 18) and local income tax (box 21). Some individuals who received form W-2 will find that all of these boxes have amounts in them, others will find only some or none of the boxes showing tax withheld.

Form 1042-S

Form 1042-S is used to report income paid to a non-resident regardless of whether the payment is taxable. The form has a number of purposes, but mainly used to report scholarship or fellowship income.

It can be used to report wages exempt under a tax treaty, wages earned as an independent contractor, royalties, and scholarship or fellowship grants.

By law, 1042-S forms must be issued by March 15. Many international students receive both form 1042-S and form W-2; some students will receive only form W-2.

The Universities are required to mention only Taxable portions of their scholarships in the Form 1042-S .

Example:

Say, a university paid $26000 as scholarship split as

Tuition and Fees: $15000

Educational Tools: $5000

Room and Boarding: $6000

1042-S contains only $6000, which are considered non educational expenses, and this amount will be taxed. Usually for students the taxes on non educational expenses is 14% and for other Non Resident Aliens its 30%

Hope you found the information helpful!