Money Matters
Students are responsible for making all necessary payment arrangements with the university bursar in the Student Accounting office, Records Hall, College Avenue Campus. All students are expected either to pay their full semester's expenses or to contract for partial payment and make the first installment prior to the end of the first week of classes. The partial payment option enables students to pay 50 percent of their term bill prior to the beginning of the semester and to make two more payments of 25 percent each later in the semester. If you make the first payment at the beginning of the semester, you must pay 75 percent at first and the balance in one more payment later. Students making full or contractual partial payments as described above may pay at any of the cashiers offices located in the Administrative Services Building (Busch Campus), Waller Hall (Cook/Douglass Campus), Lucy Stone Hall (Livingston), Miller Hall (University College), or Records Hall (College Ave. Campus).
Whether you receive an assistantship from the university, a scholarship from an outside agency, or family support from abroad, if for any reason you are not prepared to make payment at the required times you must consult the supervisor of Student Accounting in Records Hall to finalize your registration. Students receiving scholarships from their home government or other agency may arrange for direct sponsor billing tuition, fees, insurance, room and board.
Registration for the current semester is canceled if a student fails to pay required fees when required to do so. Students may
not register for a subsequent semester until all financial obligations for the current semester have been met.
Financial Aid
Financial aid available through the university specifically for foreign students is limited. Although graduate students may compete for graduate and teaching assistantships and fellowships, state and federal aid packages such as Pell Grants and College Work Study are available only to citizens and permanent residents of the United States.
Emergency loans up to $500 are available to international students through the office of Financial Aid. To apply, students must have a letter of recommendation from the Center for International Faculty and Student Services and must not have outstanding payment obligations to the university. The loans are interest-free and must be paid back in full by the end of the semester.
After completing at least one full year at Rutgers, undergraduate students may apply for the International Scholarship. This scholarship offers a small partial remission of tuition to a very few students who can show severe financial need. Applications are available in March at the Student Financial Aid office in Records Hall, College Avenue Campus, and awards are made in June for the subsequent academic year.
Students with severe financial problems should seek the advice and assistance of their international student adviser.
It is neither necessary nor practical to carry large amounts of cash with you. If you have not done so already, you should open a checking account. Personal checks are acceptable almost everywhere in the area with appropriate identification (driver's license, passport, student ID). Checks should always be used to pay bills; never send cash through the mail. Canceled checks are returned to you from the bank either automatically or upon request and provide a record of your payments. Keep them in a safe place in case you have to prove you have paid a bill.
If you have a substantial sum of money which will sit in an account for any length of time, you may also wish to open an interest-bearing account or purchase a short-term certificate of deposit.
Different banks have their own policies on service charges and minimum balance requirements for checking accounts and interest yields on savings. It is wise to check service charges and interest rates at several banks before making a choice, because such rates can vary from bank to bank.
The Campus Centers have automatic teller machines (ATMs) which allow you to withdraw money from your account 24 hours a day if your bank participates in the network.
There is may be a charge of up to $2.00 for withdrawing your money. ATMs are located in shopping centers and a number of places in downtown New Brunswick. You may wish to ask about such a service when you inquire about opening an account.
When opening an account you must present identification (passport, driver's license) and proof of affiliation with the university. Check the Yellow Pages for names and addresses of banks in the area.
An alternative to a commercial bank or savings and loan institution is the Old Queens Student Federal Credit Union (OQSFCU), a member-owned, nonprofit financial institution managed entirely by student volunteers for Rutgers students and alumni. Located in the Rutgers Student Center, room 447, the OQSFCU is open during business hours. The telephone number is 932-8117.
Foreign Exchange
International transfers of funds may be done by cable, bank transfer or foreign drafts, or international postal money orders. Contact a bank, Post Office, or Western Union for details.
It is difficult to change currencies of countries other than Canada in New Brunswick. Most banks have to send currency to New York City for exchange. The best thing to do is to have money converted to U.S. dollars before it is sent to you from home.
The regulations governing the exchange of foreign currency for U.S. dollars vary from country to country. Most often, a letter
from the registrar certifying your enrollment for the current term or academic year suffices, but some governments require a
detailed break-down of expenses. Since there may be a significant waiting period involved in the release of currency from
your home country, you should initiate the process well in advance of the time you anticipate needing the money.
A limited source of income is on-campus employment. American and foreign students hold positions in dining halls, cafeterias, offices, libraries, laboratories, gymnasiums, and residence halls. The hourly rate of pay depends on the nature of the job and the student's experience as determined by the employing department. International students may not work more than 20 hours per week while school is in session (full-time employment is permitted during vacation periods) and must pay income tax on money earned from on-campus employment.
Everyone who works in the United States must prove s/he is eligible to be employed. Employers are required by law to examine documents which prove a prospective employee's eligibility. At Rutgers, the employer's section of the Employment Eligibility Verification Form (Form I-9) is completed by the employing department, but all F-1 and J-1 students must attend an On-Campus Employment workshop at the Center for International Faculty and Student Services to assist them in completing the employee's section and to obtain a data form for the payroll office which relays information unique to nonimmigrant visa holders. These workshops are held every day during orientation and on Mondays at 2:00 p.m. and Thursdays at 9:30 a.m. throughout the year.
Working outside the university is illegal for international students unless it is authorized by the U.S. Immigration and
Naturalization Service, or, in certain cases, by an international student adviser who has been granted such authority by
regulations. Generally, F-1 or J-1 students must establish eligibility to work by documenting a "severe economic hardship
caused by unforseen circumstances beyond the student's control" or by meeting criteria for Practical Training (see below).
Off-campus employment based on economic need cannot be granted during the first academic year. The economic need
application may be difficult to obtain even after the first year, since guarantee of adequate funds to cover educational expenses
is a requirement for securing a student visa and maintaining student status.
Practical/Academic Training
The immigration service authorizes international students in F-1 and J-1 status to engage in employment at certain times if the employment is related to the field of study and commensurate with the degree level of the student; in some cases, Practical Training (for F-1 students) and Academic Training (for J-1 students) may be required or elected to meet degree requirements. There are a variety of Practical Training options--some part-time, some full-time--and there are restrictions on the total number of months a student may pursue Practical Training. In general, most F-1 students will be limited to 12 months and J-1 students to 18 months of Academic Training, but students should check with their international student adviser to evaluate their individual allotment.
See section titled "Employment: Practical/Academic Training" in the next chapter, "Laws and Regulations" for further details.
If you have income during your stay at Rutgers, there are three different types of tax with which you must be concerned: U.S.
federal income tax, social security (FICA) tax, and New Jersey state income tax.
Federal Income Tax
Collection of Federal Income Tax in the United States is the responsibility of the U.S. Internal Revenue Service (IRS).
Foreign students in the United States are subject to federal income taxation on any wages earned in the United States. The following is a summary of U.S. government requirements; for more detailed information regarding your tax obligations, obtain publications 519 (U.S. Tax Guide for Aliens), and 901 (U.S. Tax Treaties). These publications and tax forms are available from the local IRS office, 100 Dey Place, Route 1 Wick Plaza, Edison. As supplies last, they are also available at the Center for International Faculty and Student Services between February 15 and April 15. These and all other forms and publications can also be obtained by calling 1-800-TAX-FORM.
The federal tax obligations of foreign nationals are determined by several factors: immigration status, length of residence in the U.S., purpose for being in the country, intent to return to the home country or to remain for an extended period in the United States, country of citizenship, and type of income. Different combinations of these factors result in different tax obligations.
The first consideration is one's status as a resident or nonresident for tax purposes. In general, the following guidelines apply:
F-1 and J-1 students are considered nonresidents for tax purposes in their first five years of study. After five years, students are presumed to be residents and must justify continued filing as nonresidents to the IRS.
Individuals in J-1 status other than students in degree-granting programs, i.e., scholars, faculty, and researchers, are considered nonresidents for tax purposes during their first two years in the United States.
All other nonimmigrant visa holders who reside in the United States for more than 183 days in the tax year (calendar year) are presumed to be residents for tax purposes.
Permanent residents are residents for tax purposes.
Taxation of Residents: If you are a resident for tax purposes, you
pay tax on your entire worldwide income
may claim all of your dependents
may take the standard deduction or itemize deductions
file form 1040 or 1040EZ
Taxation of Nonresidents: If you are a nonresident, you
pay tax only on income earned in the United States
may claim only yourself as a personal exemption regardless of the number of accompanying dependents (citizens of Canada, Mexico, Japan, and South Korea excepted)
may not take a standard deduction; must itemize deductions
file form 1040NR or 1040NR-EZ with required attachments regardless of whether you had any earned income in the tax
year
file form 8843 (Statement for Exempt Individuals and Individuals With a Medical Condition)
Taxable Income: Assistantships, Fellowships, and Scholarships
All students must pay taxes on teaching, graduate, and research assistantships. Assistantships are not scholarships or fellowships. No portion of the stipend paid is excluded from taxation. Foreign students who are not eligible to claim tax treaty benefits must have taxes withheld from their biweekly paychecks and must file a tax return between January 1 and April 15 of the following year to recover any amounts withheld in excess of taxes owed. (See "Tax Treaties" below and "Filing Tax Returns and Obtaining Refunds" on page 55.)
Students who are degree candidates at qualified educational institutions do not pay tax on amounts received as a scholarship or fellowship grant which cover tuition and education-related expenses such as required university fees, text books, supplies and equipment. Expenses for room and board and other personal items are not considered educational expenses for the purpose of determining tax liability. Students who are not degree candidates must pay income tax on the entire amount of their fellowship award.
Although tax is not withheld from the fellowships of residents for tax purposes, it is withheld from those of nonresidents.
Tax Treaties
The United States has tax treaties with many different countries. Although there are certain basic similarities among them, the treaties vary in significant ways in terms of the benefits they offer to students, in terms of the types of income covered, the total amount of the exemption, and the number of years one can claim the benefit. Although some treaties exempt 100 percent of some types of income, most treaties exempt only a portion of students' earnings, including assistantships. The university withholds tax on your earnings unless you make a claim for exemption by treaty.
Countries with which the United States has tax treaties which exempt certain types of income of students in the United States
are listed in IRS Publication 901, U.S. Tax Treaties. Please be advised that the existence of a tax treaty with your country
does not automatically mean you do not have to pay taxes.
Claiming Exemption from Taxes Based on a Tax Treaty
Everyone earning income in the U.S. is required to complete and file a Form W-4; however, tax treaty benefits are not claimed on the W-4 form itself. Individuals who hold teaching and graduate assistantships and who are sure they are eligible for treaty benefits must submit to the payroll office Form 8233 filled in duplicate. Individuals awarded fellowships must file a claim for exemption on form W-4. Individuals are responsible for their own tax decisions. They are also responsible for notifying the payroll office when their tax treaty benefit ends.
If you are unsure as to whether you are eligible for tax treaty benefits, you may consult with a tax attorney for advice, or you may do the following: do not claim exemption from withholding; the payroll office will withhold your tax, and when you file your tax return, request a refund, based on the treaty, of all taxes withheld. If the IRS determines you are ineligible for treaty benefits, your withheld taxes will not be returned, but you will not have to pay the penalty.
For your reference the Center for International Faculty and Student Services provides copies of IRS Publication 901 which
details all tax treaties. The staff does not, however, interpret the treaties for you in detail; for a full analysis you must consult a
tax accountant or your consulate.
Filing Tax Returns and Obtaining Refunds
All individuals in F-1, F-2, J-1 or J-2 status must file a tax return, regardless of whether they have earned income in the U.S. or not.
Nonresidents for tax purposes who have income from a source in the United States -- foreign students who have assistantships, fellowships, on or off-campus jobs -- must file the tax return form 1040NR or 1040NR-EZ plus attachments between January 1 and April 15 for the preceding tax year. Nonresidents for tax purposes who have no earned income must file the tax return form 1040NR or 1040NR-EZ plus attachments between January 1 and June 15 for the preceding tax year. In the spring of each year the Center for International Faculty and Student Services conducts seminars on how to file a federal nonresident tax return. The 1040NR/1040NR-EZ is filed with the Internal Revenue Service Center, Philadelphia, PA 19255.
In many cases, taxpayers are due a refund because more money was withheld from their pay than they owe in taxes. If a refund is due, a check is sent approximately six months after the tax return is filed. In some cases, more tax may be due; in this case the taxpayer must send the IRS a check for the tax due with the return by the April 15 deadline.
It is not possible to receive a refund of money withheld without filing a return. Individuals who have earned income in the
United States and who fail to file an income tax return may later be required to pay fines, penalties, and interest charges in
addition to any taxes owed.
New Jersey Income Taxes
If you earned income in New Jersey, even if it was exempt by treaty from federal income tax, you probably owe New
Jersey state income tax. If you live in New Jersey, you file as a resident; if you live in Pennsylvania or New York, you file as a
nonresident of New Jersey. State tax forms are available in libraries. New Jersey tax returns are filed between January 1 and
April 15 for the previous calendar year.
Social Security Tax
The United States' national retirement and disability insurance plan is known as Social Security. With very few exceptions all
people who work in this country are required to pay into the system: F-1 and J-1 visa holders are not required to have social
security payments withheld from their pay as long as they are nonresidents for tax purposes and are employed by the school
whose immigration sponsorship they are under. J-2, H-1, and L-1 visa holders must pay social security tax.
W-4 Form
Because the United States requires employers to withhold tax on wages earned by employees, all employees must fill out a W-4 form before going on a payroll. Based on projected earnings and the numbers of allowable exemptions, this form determines the amount of money withheld from one's pay for the Internal Revenue Service and the New Jersey State Division of Taxation. Except for citizens of Canada, Mexico, Japan, and South Korea, nonresidents for tax purposes may claim only one personal allowance (item 5) regardless of the number of accompanying dependents. Unless your total earnings for the tax year will not exceed the amount you may deduct for your withholding allowance and you owed no U.S. tax in the prior year, you may not claim exemption from withholding on the W-4. No one may use the W-4 to make a claim to exemption from withholding based on a tax treaty; see below "Tax Treaties."
Taxpayers must have withheld, or make quarterly estimated payments in, an amount equal to 90% of their estimated current
year's tax or 100% of their prior year's liability, whichever is less. U.S. law allows substantial penalties for under-withholding
of federal taxes. It is safer to have money withheld and get it back the next year when you file your tax return than to risk
having to pay the tax, plus interest and a penalty if you make a mistake.
W-2 and 1042S Forms
In January, everyone who was on a payroll in the previous year receives a W-2 form, a statement of the amount of money withheld from total earnings for federal tax, social security taxes (FICA), and state taxes. The form is issued by every employer for whom you worked. Each W-2 has three or four identical pages, one to be submitted to the IRS with the federal tax return, one to be submitted to the state with the federal tax return, one to be retained, and, in some jurisdictions, one to be submitted with with the city tax return.
Nonresident recipients of fellowships receive a 1042S statement of income rather than a W-2. A portion of the income
reported on the 1042S is subject to federal and state taxes. The portion of the income which is taxed depends on your
education-related expenses and whether or not you are covered by a tax treaty. See Publications 519, and 901.
Social Security Number (SSN)
Everyone who has earnings in the United States must obtain a social security number, the number used by the U.S.
government to identify wage earners for tax purposes. The number is printed on a light blue card, referred to as the social
security card. The number assigned to new international students by the school is not valid for use outside the university; nor is
it valid for payroll purposes within the university. (The number is used as a student identification number to maintain attendance
and grade records.) Representatives from the Social Security Administration come to campus during fall orientation to take
applications for numbers; those who miss this program must go to the Social Security Administration office at 52 Charles
Street of Livingston Avenue in downtown New Brunswick. Take with you your IAP-66 or I-20, your I-94 (white card), your
passport and any identification showing your name which is more than 1 (one) year old.
Individual Taxpayer Identification Numbers (ITINs)
Individual Taxpayer Identification Numbers (ITINs) are for those who do not have a social security number (SSN) and who
are not eligible to get one. Since all individuals in F or J status--including F-2 and J-2 dependents--are required by law to file
non-resident tax returns, those who are not eligible for SSNs must obtain an ITIN. To apply for an ITIN, file Form W-7 with
the Internal Revenue Service (IRS). The local IRS office is located at 100 Dey Place, Route 1 (behind Wick Plaza), Edison.
It usually takes about 30 days to get an ITIN.
A Final Note
The university does not provide tax advising to American students or staff; nor can it offer detailed advice or assistance to foreign nationals enrolled or employed at Rutgers. The above is intended to give you a general sense of your obligations under the law; for in-depth analysis and assistance, you must consult a professional tax accountant or attorney specializing in nonresident alien tax matters. The Center for International Faculty and Student Services provides names, addresses, and telephone numbers of tax accountants qualified to assist with nonresident tax matters.