Information for Current Grantees - Social Security Number and Income Taxes

OVERVIEW

• Fulbright grant payments issued in the United States
• University awards and financial aid
• Pay from employment, such as teaching or research assistantships

All financial income derived from U.S. sources is subject to U.S. income taxes.

In the case of income from Fulbright grant payments issued in the United States, the U.S. Department of State withholds the required income tax and pays it directly to the IRS. In the case of employment, you are unlikely to owe any tax beyond the amount withheld from your pay by your employer.

Nevertheless, if you have any financial income from U.S. sources, you must file with the IRS, each year, an official report called a tax return. In your case, as Fulbright grantee, you are required to file IRS Form 1042-S: Foreign Person’s U.S. Source Income Subject to Withholding.

If you have no income from U.S. sources, and therefore owe no income taxes, you are still required to file IRS Form 8843: Statement for Exempt Individuals and Individuals with a Medical Condition.

IIE’s GRANTAX tax-management service will file your tax return on your behalf, free of charge. You are strongly urged to use this service, whether you owe taxes or not. If you receive either funding or visa sponsorship through IIE, you are required to use the GRANTAX service.

In order to file a U.S. income-tax return, you must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). These are the nationwide identification numbers used by the IRS.

IIE recommends that you to apply for an SSN or ITIN as soon as possible—even if your grant payments are issued by the Fulbright Commission in your home country—but only after you have officially reported your arrival in the United States; see Arrival.

The following sections outline your primary responsibilities under the IRS income-tax regulations:

• Applying for a Social Security Number
• Applying for an Individual Taxpayer Identification Number
• Filing your income-tax return
• State tax return
• Resume of important terms
• Relevant IRS forms

For further discussion, see the Fulbright Foreign Fellows Handbook: Guide to Living and Studying in the United States, pages 22-27 (income taxes), pages 27-28 (SSN and ITIN), and page 29 (employment authorization).

APPLYING FOR A SOCIAL SECURITY NUMBER

To apply for a Social Security Number, you must appear in person at the office of the Social Security Administration nearest your host institution. Take the following documents with you:

1. A completed Form SS-5, Application for a Social Security Card (available online at http://www.ssa.gov)
2. Your passport and one other document that establishes your age and identity
3. Your I-94 Card
   
4. Your SEVIS Form DS-2019

Some Social Security Administration Offices may require a letter that states that you are authorized to work in the United States. Your IIE Regional Center will provide you with a letter that states that it is possible that you may work in the United States at some point in the future.

****NOTE: It is extremely important that your name on the application for an SSN be spelled exactly the same way it is spelled on your passport and on your SEVIS Form DS-2019.***

The Social Security Administration verifies your immigration documents and status through the Department of Homeland Security (DHS) Systematic Alien Verification for Entitlements (SAVE) Program. SAVE is populated by data collected by the DHS at the time you were admitted to the United States DHS estimates that this data will become available in the SAVE system within 10 calendar days of your arrival.

APPLYING FOR AN INDIVIDUAL TAXPAYER IDENTIFICAITON NUMBER (ITIN)

To apply for an ITIN, you should go to the nearest IRS office and complete IRS FORM W-7. For updated information on ITINs, check with the Foreign Student Advisor on your campus or contact your IIE Regional Center representative.

FILING YOUR INCOME TAX RETURN

GRANTAX prepares and files Federal tax returns by combining the personal and financial information you provide in a questionnaire with the various tax forms issued to you by independent sources. These could include wage statements (W2), bank interest statements, statements of interest paid and received, etc. It is very important for GRANTAX to receive complete and accurate information from you in order to prepare your return, although it may seem quite time-consuming to you. An increasing number of tax returns have been subject to tax audit and GRANTAX would like to be well-prepared for an audit should one be issued.

If you do NOT have a SSN/ITIN, please immediately apply for one by either downloading the application and instructions for a social security number (Form SS-5) from the Social Security Administration Website at http://www.ssa.gov OR downloading the application and instructions for the IRS Individual Taxpayer Identification Number (Form W-7) from the IRS Website at http://www.irs.gov. Please contact Grantax@iie.org if you have any problems or questions.

If you already have a SSN or ITIN and your computer has internet Explorer version 5.0 or higher, please proceed to the online questionnaire:

https://www.iieapp1.org/grantax/grantaxlogin.asp

Please complete and submit this questionnaire to GRANTAX, as we need this information to prepare your U.S. Income Tax Return. If you have used GRANTAX to file your tax return previously, please have your last year’s password available. You need to use the same password to have access to the existing account where personal information is pre-populated, for your convenience. If you don’t remember your password, you can obtain it on the first page of the online questionnaire (click “Forgot Password”.)

Note to first time users: When you log into the questionnaire for the first time, please make sure to click “First-Time User Registration,” which will take you to the registration page where you create your password for entry to your questionnaire:

https://www.iieapp1.org/GRANTAX/Prelogin.asp

If you have problems accessing our online questionnaire, please contact your IIE Regional Center representative for a MICROSOFT WORD version and a Power of Attorney form in PDF format.

Please complete and submit the questionnaire and mail all required documents so that GRANTAX receives them by 03/31/07.

STATE TAX RETURN

GRANTAX will also prepare your state tax return if necessary and will mail it to you so you can sign and mail the completed and signed forms to the applicable state tax authority directly. Although your sponsor does not bear any state tax liability, if you are charged with a late filing penalty, IIE will bear the charge on your behalf.

Resume of Important Terms

FICA: Federal Insurance Contributions Act—the provisions of the Social Security Act, as they appear in the U.S. Internal Revenue Code

GRANTAX: IIE’s tax-management service for Foreign Fulbright grantees

IRS: Internal Revenue Service

ITIN: Individual Taxpayer Identification Number (see W-7 below)

SSA: Social Security Administration

SSN: Social Security Number

Social Security Form SS-5: Application for a Social Security Card

Relevant IRS Forms

1042-S: Foreign Person’s U.S. Source Income Subject to Withholding

1099: Miscellaneous Income

8233: Exemption from Withholding on Compensation for Independent (Certain Dependent) Personal Services of a Nonresident Alien Individual

8843: Statement for Exempt Individuals and Individuals with a Medical Condition

W-2: Employer Wage and Tax Statement

W-4: Employee’s Withholding Allowance Certificate

W-7: Application for Individual Taxpayer Identification Number