For tax purposes in the United States, individuals can be classified in one of four groups:
- U.S. Citizen,
- Permanent Resident Alien,
- Resident Alien for U.S. tax purposes, or
- Nonresident Alien for U.S. tax purposes.
To determine tax residency, non-U.S. citizens (excluding most Permanent Residents, DACA recipients, and asylees) are required to use Glacier, a nonresident tax compliance system, which collects information about an individual's immigration status, visa, country of residency, and history of presence in the United States. In order to properly pay and tax individuals, the following determinations must be made:
- residency tax status (Nonresident or Resident Alien for U.S. tax purposes),
- eligibility to claim a tax treaty exemption (based on country of residence) and/or
- nonresident OASDI (Social Security) and Medicare tax exemption.
Upon completion of the required data within Glacier, all system-generated forms and copies of immigration documents must be signed and submitted to Tax Services in order to withhold the appropriate taxes from any payments issued.
A nonresident employee who earned wages that were exempt from federal withholding taxes due to a tax treaty will receive a Form 1042-S. Nonresident employees will receive both a 1042-S and W-2 Form if wages earned are above the tax treaty limit.
1042-S Forms will also be issued for any nonresident individuals that were paid scholarships, fellowships, royalties, and/or cash prizes during the tax year.
The Internal Revenue Service (IRS) requires 1042-S Forms be sent to eligible individuals no later than March 15 of each year. The University typically mails 1042-S Forms in mid-February. 1042-S Forms can be accessed electronically through the My Tax Forms page of UT Direct.
Nonresident IRS Tax Returns
The International Student & Scholar Services (ISSS) section of Texas Global has a license agreement for Glacier Tax Prep, which assists individuals preparing nonresident U.S. tax returns.