Nonresident Aliens Exceptions

For residents of certain countries, there are exceptions to claiming only one personal allowance on the W-4 form. The exception to the "rule" applies to residents of Canada, Mexico, South Korea, India, Barbados, Hungary, Jamaica, or U.S. Nationals.

A U.S. National is an individual who, although not a U.S. citizen, owes his or her allegiance to the United States. U.S. Nationals include American Samoans, and Northern Mariana Islanders who chose to become U.S. Nationals instead of U.S. citizens.

American Samoa and the Northern Mariana Islands

If the individual is a U.S. national of American Samoa or the Northern Mariana Islands, an additional allowance for a spouse can be claimed if the following criteria are met:

• The spouse has no gross income.
• The spouse is not claimed as a dependent by another taxpayer.

The individual can also claim allowances for each dependent child who meets the following criteria:

• The child qualifies as a dependent under the normal IRS rules.
• The child is not required to be a U.S. citizen, U.S. resident for tax purposes.
• The child is not required to have lived with the individual at some time during the calendar year.

Canada and Mexico

If the individual is a resident of Canada or Mexico an additional allowance for a spouse can be claimed if the following criteria are met:

• The spouse has no gross income.
• The spouse is not claimed as a dependent by another taxpayer.

The individual can also claim allowances for each dependent child who meets the following criteria:

• The child qualifies as a dependent under the normal IRS rules.
• The child is not required to be a U.S. citizen, U.S. resident for tax purposes.
• The child is not required to have lived with the individual at some time during the calendar year.

South Korea

If the individual is a resident of South Korea an additional allowance for a spouse can be claimed if the following criteria are met:

• The spouse has no gross income.
• The spouse is not claimed as a dependent by another taxpayer.
• The spouse is required to have lived with the taxpayer at some time during the calendar year.

The individual can also claim allowances for each dependent child who meets the following criteria:

• The child qualifies as a dependent under the normal IRS rules.
• The child is not required to be a U.S. citizen, U.S. resident for tax purposes.
• The child is required to have lived with the taxpayer at some time during the calendar year.

The spouse and child dependent allowances must be prorated based on U.S. income to worldwide income.

India

Students from India may be able to claim additional allowances for their spouse or dependents. The student must be a tax resident of India at the beginning of the visit to the U.S. for the purpose of education or training. An additional allowance for a spouse can be claimed if the following criteria are met:

• The spouse has no gross income.
• The spouse is not claimed as a dependent by another taxpayer.

The individual can also claim allowances for each dependent child who meets the following criteria:

• The child qualifies as a dependent under the normal IRS rules.
• The child is required to be a U.S. citizen, or U.S. resident for tax purposes.

A child with the following visa status is usually considered to be a nonresident alien: F-2, J-2, M-2 or Q-2. A dependent child, who is a resident of Canada or Mexico and would otherwise qualify as a dependent of an Indian student, can be claimed as a dependent as well.

Barbados, Hungary, or Jamaica

As a tax treaty benefit, students from Barbados, Hungary, and Jamaica may claim residency for tax purposes even though they have not reached substantial presence. The following factors MUST be considered by the student before a decision to claim residency is made:

• Ability to claim the standard deduction on the student's tax return.
• Will be taxed on worldwide income, not just U.S. source income.
• Gives up the F1/J1 FICA exemption, but may be eligible for the normal student FICA exemption.
• If the student chooses to withdraw the residency for tax purposes, it may not be reversed without consent from the U.S. competent authority.

If the student chooses to claim this benefit and be taxed as a resident, the following forms must be completed:

• Form W-9 - Request for Taxpayer Identification Number and Certification. This is to certify that the student wishes to claim residency for tax purposes.
• Form W-4 - Employee's Withholding Allowance Certificate. This form is used to claim the desired withholding rate and allowances.

These forms must be completed and forwarded to Payroll Services for updating.