Tax Implications for International Workers in the US: What You Need to Know

The United States is a top destination for international professionals seeking career growth, high salaries, and new opportunities.

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However, if you’re planning to work in the US, it’s essential to understand the tax implications. The US tax system can be complex, especially for non-resident aliens, visa holders, or those with income from outside the US.

In this guide, we break down the key tax rules for international workers in the US, including who needs to file taxes, how much you may owe, and how to stay compliant.

Who Is Considered an International Worker?

In the US, international workers typically include people who are:

Working on a temporary work visa (e.g., H-1B, L-1, O-1)
Studying with limited work rights (F-1 visa holders with CPT/OPT)
Working as part of an internship or training program (J-1 visa holders)
Living and working in the US without a green card

If you fall into any of these categories, you may be subject to federal, state, and local taxes.

Resident vs. Nonresident Alien: What’s the Difference?

Your tax obligations in the US depend on whether you’re a resident alien or a nonresident alien for tax purposes.

1. Resident Alien

You’re taxed on worldwide income, just like US citizens. You become a resident for tax purposes if:

You pass the Substantial Presence Test (you were physically present in the US for at least 183 days over the last 3 years, with weighted calculations)
You have a green card (lawful permanent resident status)

2. Nonresident Alien

You are taxed only on your US-source income. Most new international workers fall into this category during their first few years in the US.

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Tip: Even if you live in the US for part of the year, you may still be a nonresident for tax purposes depending on your visa and number of days present.

What Taxes Do International Workers Pay?

International workers may be subject to several types of taxes:

1. Federal Income Tax

This is paid to the Internal Revenue Service (IRS). It’s usually withheld from your paycheck by your employer under the withholding system.

2024 Federal Tax Brackets (for single filers):

10% on income up to $11,600
12% on $11,601 to $47,150
22% on $47,151 to $100,525
Higher brackets apply for higher earnings

Nonresident aliens cannot claim the standard deduction (except students from India under tax treaties).

2. State Income Tax

Most US states also collect income tax. Rates vary by state—some states like Florida, Texas, and Washington have no state income tax, while others like California and New York have higher rates.

FICA includes:

6.2% Social Security tax
1.45% Medicare tax

H-1B and L-1 visa holders typically pay FICA taxes. However, some visa holders (like F-1, J-1, M-1) may be exempt for a certain number of years.

Do I Need to File a Tax Return?

Yes—almost all international workers need to file an annual tax return.

Nonresident aliens use Form 1040-NR
Resident aliens use Form 1040
F-1 and J-1 visa holders must file Form 8843, even if they earned no income

Deadline: April 15 each year (or the next business day if it falls on a weekend).

Tax Treaties: Avoiding Double Taxation

The US has tax treaties with over 60 countries to help prevent double taxation. These treaties may:

Reduce or eliminate income tax on certain types of income (like salaries or scholarships)
Allow tax-free income thresholds for students or trainees
Change the withholding rate your employer applies

To benefit, you’ll need to:

Submit Form 8233 (for personal services)
Inform your employer in advance

Tip: Students from India on F-1 visas may be able to claim the standard deduction, unlike most other nonresidents.

Tips for Staying Compliant

Apply for a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) if needed
Understand your visa category and how it affects your tax status
Keep detailed records of your income, visa status, and days spent in the US
Check eligibility for tax treaty benefits
Use IRS-approved software or consult a tax professional with experience in international tax issues.

Can I Get a Tax Refund?

Yes—if you had too much tax withheld from your paycheck or qualify for tax treaty benefits, you may be eligible for a tax refund. File your return early to avoid delays

Final Thoughts

Understanding the tax implications for international workers in the US is critical to staying compliant and avoiding penalties.

While the system can be complex, knowing whether you’re a resident or nonresident, which taxes apply to you, and how to take advantage of tax treaties can save you time and money.

If you’re unsure, it’s best to seek help from a tax advisor or use tax software built for nonresident workers. The more informed you are, the easier it is to manage your finances during your time in the United States.