Employment Taxes
Employment taxes apply for all non-citizens of the United States who work in the U.S. There are three classes of payroll deductions that may apply:
 
  • Social Security (OASDI), Medicare (HI) and California State Disability Insurance (CASDI)
  • Federal income taxes
  • California state income taxes
 
Social Security, Medicare and CASDI
Generally, all alien (non-U.S. citizen) earnings are subject to the following deductions:
 
  • Social Security
  • Medicare
  • California State Disability Insurance (CASDI)
 
However, there are exceptions:
F-1 VISA: Non-resident aliens with a valid F-1 visa (students) are exempt until reclassified as a resident alien. An alien with a valid F-1 visa is considered a non-resident for five (5) calendar years from date of entry into the U.S. An alien with a valid F-1 visa is considered a resident in the sixth calendar year if they are present in the U.S. for a minimum of 183 days in the sixth calendar year. If this test is met, withholding is effective with the first day of the sixth calendar year. For example, if you enter the U.S. on December 1, 2007, and are present in the U.S. for 183 calendar days in calendar year 2012, all wages beginning January 1, 2012, are subject to taxation.
 
J-1 VISA: Non-resident aliens with a valid J-1 visa (professors, researchers) are exempt until reclassified as a resident alien. An alien with a valid J-1 visa is considered a non-resident for two (2) calendar years from date of entry into the U.S. An alien with a valid J-1 visa is considered a resident in the third calendar year if they are present in the U.S. for a minimum of 183 days in the third calendar year. If this test is met, withholding is effective with the first day of the third calendar year. For example, if you enter the U.S. on December 1, 2007, and are present in the U.S. for 183 calendar days in calendar year 2009, all wages beginning January 1, 2009, are subject to taxation.
 
See Internal Revenue Service Publication 519, “U.S. Tax Guide for Aliens” for more information on how to determine the status of a non-resident, resident or dual status alien, and on the physical presence test.
 
Federal Income Taxes
A non-resident alien is subject to U.S. income tax only on U.S. source income. However, there are exceptions:
 
F-1 VISA: Non-resident aliens with a valid F-1 visa (students) may be exempt from a fixed amount of earnings per calendar year if the home country has a tax treaty with the U.S. The amount of exempt wages, if any, varies by country. For example, non-resident aliens from China on an F-1 visa are exempt from federal income taxes on the first $5,000 of earnings per calendar year while on an F-1 visa.
 
J-1 VISA: Non-resident aliens with a valid J-1 visa (professor, researcher) may be fully exempt (all earnings) for a number of calendar years if the home country has a tax treaty with the U.S. The number of years varies by country. For example, non-resident aliens from China on a J-1 visa are fully exempt from federal income taxes for three years from date of entry into the U.S.
 
A non-resident alien's income is subject to withholding after the tax treaty exemption has been reached. City of Hope 's Payroll Department can provide additional information concerning federal income tax withholding.
 
California State Income Taxes
All employees, regardless of visa type, country or residency status, are subject to California income tax withholding.
 
Change of Visa Type
If your visa type changes from F-1 or J-1 to a resident alien (e.g., H1-B) you will be subject to all taxes in the same manner as a U.S. citizen.
 
Documentation
To administer the tax laws, City of Hope's Payroll Department requires that the foreign national provide the following documents at the time of hire:
 
  • DS-2019 (Certificate of Eligibility for Exchange Visitor (J-1 Status))
  • I-20 (Certificate of Eligibility for Nonimmigrant (F-1 Student)
  • Passport
  • Visa
  • Social Security card (if not available, provide a receipt from Social Security as evidence of application)
 
For More Information
City of Hope Payroll Department
Kathleen Bleizeffer
626-256-HOPE (4673), Ext. 62183
Fax 626-301-8114
kbleizeffer@coh.org
 
Internal Revenue Service (IRS)
General Information: 800-829-1040 (ask for tax law assistance)
International Division: 215-516-2000