U.S. income taxes are owed on any income that you receive during your stay in the United States. Even if you do not receive income from a U.S. source, it may be possible that you could still be taxed on your world-wide income. Income taxes are assessed at both a state and a federal level. Each year, you must report your earnings on annual tax reports, known as "Income Tax Returns”, to both state and federal tax offices.
Each state has its own tax office to handle the enforcement and collection of state and local taxes. Tax office websites for states where NIH scientists commonly reside can be found at:
Tax Treaty Agreements
The United States has
income tax agreements or treaties with several nations that may exempt some individuals from certain types of U.S. tax. These treaties are between the U.S. and your country of
“tax residence.” The country of “tax residence” is not necessarily your country of citizenship; rather, it is the country where you last paid income taxes before arrival to the NIH. The benefits of the treaty may only be applied for a certain number of years – either on a calendar year or tax year basis (depending on the terms of the treaty) – which are calculated from the date that you initially entered the U.S.
DIS will make an interpretation regarding your tax treaty eligibility and will notify you if we believe that any exemption applies. Ultimately, income taxes are a private matter between you and the United States government. The NIH must withhold taxes as necessary under all applicable tax laws and will do so in situations where treaty eligibility is not clearly evident.
Nonresident Tax Orientation & Materials
Our contracted tax consultation service provider presents a yearly nonresident tax orientation. This orientation is designed to provide NIH Visiting Program participants with a general overview of U.S. tax procedures, terms, and forms.
The link to this year’s orientation video can be found on the first slide of Nonresident Tax presentation:
Tax Resources:
Tax Preparation Guide
DIS worked with a contracted tax consultation service provider to prepare a Tax Preparation Guide. This guide gives NIH Visiting Program Participants a specific review of documents and processes required to file annual tax returns before the April 15th deadline.
Form 1042-S, W-2, 1099, 1099-G Information
Form 1042-S – Foreign Person’s U.S. Source Income Subject to Withholding Visiting Fellows have their stipend payments and a summary of federal tax withheld reported on Form 1042-S. The NIH Fellowship Payroll Office sends out the Forms 1042-S for the prior year no later than March 15, but they make every attempt to send the forms out before the deadline. These forms are not available online.
Prior to December 15, you should make sure that your Administrative Officer (AO) has your correct mailing address. Your AO will update your information in the Fellowship Payroll System (FPS). If you do not receive your Form 1042-S by March 25, you can contact the
Office of Financial Management (OFM) via email to request a copy. You can obtain your IC’s OFM contact from your AO.
Form W-2 – Wage and Tax Statement
Scientists in FTE positions (Research Fellows, Clinical Fellows, etc.) have their wage payments and a summary of federal tax withheld reported on Form W-2. The Office of Human Resources sends out the Forms W-2 for the prior year by the end of January. If you do not receive your Form W-2 by the end of January, a duplicate can be requested from
OHR.
Form 1099-M and Form 1099-G
For information regarding these forms, contact the following offices:
- Form 1099-G – contact the Office of Financial Management (OFM) at (301) 496-5635
- Form 1099-M – contact the OFM Customer Service at (301) 496-6088.
Frequently Asked Questions
How can I get tax advice?
You can get information tailored to your specific NIH Visiting Program award/assignment/appointment at the DIS website.
Your tax liability is a personal matter between you and the U.S. Internal Revenue Service (IRS). DIS neither prepares individual returns nor represents individuals before the IRS or state tax authorities. If you require these services, we encourage you to consult with a professional tax advisor of your choice who has expertise with nonresident or resident alien tax issues.
Must I file a federal and state income tax return?
Generally, yes. Anyone who works and receives income in the United States must file an annual income tax return for federal and state taxes, regardless of if you are exempt from taxes for any reason. Even if you do not receive income from a U.S. source, you may still be required to file a tax return.
If a tax treaty applies to me, do I still need to file a tax return?
Yes. Even if you are exempt from taxes based on a tax treaty, you must still file an annual tax return to report this exemption.
If a tax treaty applies to me, do I still need to pay state taxes and file a state tax return?
It depends on the state. Each state has a different tax authority than the federal system. Many states, including Maryland, do not recognize federal tax treaties as applicable to them.
Why are there more tax treaty benefits for Visiting Fellows than for employees (full-time equivalents)?
Tax treaties are very specific regarding the type of income that allows you to receive a tax treaty benefit. Many of the treaties have benefits available for “grant” or “stipend” recipients, but not for individuals earning “salaries” or “wages.”
My country has a tax treaty, but I do not see it detailed. Why is my country not recognized by NIH?
Although tax treaties exist between the US and many countries, they are very specific regarding the type of income that allows an individual to receive a benefit.
I believe that I should benefit from a tax treaty but DIS has indicated that I am not eligible. How is this possible?
In addition to the type of income, tax treaties are also based upon the country where you last maintained “tax residence.” The country of tax residence is not simply your country of citizenship; rather it is the country where you last paid income taxes before arrival to the NIH. Establishing tax residence is generally based upon your “habitual residence” or “center of life” just prior to your arrival to the NIH. Residency status for tax purposes is entirely different than residency status for immigration purposes.
What if I disagree with the determination regarding my tax eligibility?
DIS staff does their best to ascertain the facts to determine tax treaty eligibility. If you disagree, contact the DIS to provide additional details regarding your specific situation. The NIH must withhold taxes as necessary under all applicable tax laws and will do so in situations where treaty exemption is not clearly evident.
Ultimately, taxes are a personal matter between you and the U.S. Internal Revenue Service (IRS). Therefore, if you feel that the tax treaty benefit does apply to you, but the NIH has withheld taxes, you are welcome to file for the benefit along with your annual tax return. If the IRS accepts and processes the return, you will receive a refund of the taxes that were withheld by the NIH. However, you should be prepared to substantiate your treaty claim in the event of an audit. DIS is unable to assist with these claims.
When will I receive my year-end tax earnings statement?
Employees receive a Form W-2 by the end of January. Fellows receive a Form 1042S by the end of March.
