IRS Tax Filing for Indian F1 Students in the U.S.
For Indian students on an F1 visa, tax season is often more about “compliance” than “payment.” Even if you didn’t earn a single dollar in 2025, you still have a federal obligation to the IRS.
In 2026, the One Big Beautiful Bill (OBBB) has changed some credit eligibility, but for most Indian students, the biggest advantage remains a unique provision in the U.S.-India Tax Treaty that students from other countries don’t get.
1. The “Zero Income” Requirement: Form 8843
If you were physically present in the U.S. for even one day in 2025 on an F1 visa, you must file Form 8843.
- Why? It tells the IRS you are an “Exempt Individual.” This doesn’t mean you don’t pay taxes; it means you are exempt from counting your days toward becoming a tax resident for your first 5 calendar years.
- Who files? You, your spouse (F2), and any dependents (F2), regardless of age or income.
- Deadline: June 15, 2026 (if you have no income) or April 15, 2026 (if you do).
2. Filing Form 1040-NR (Nonresident Alien)
If you had a campus job, an internship (CPT), or started OPT in 2025, you must file Form 1040-NR.
- The Rule: You only report income earned inside the U.S. Money sent from your parents in India for tuition or living expenses is not taxable and does not need to be reported.
- Taxable Scholarships: If your scholarship covers more than just tuition and books (e.g., it pays for your room and board), that “excess” amount is considered taxable income.
3. The Article 21 Advantage (The “Secret” Deduction)
India is the only country whose students can claim the Standard Deduction while filing as nonresidents.
- The Benefit: Under Article 21 of the U.S.-India Tax Treaty, you can claim the $15,750 standard deduction for the 2025 tax year.
- Why it matters: Students from China, Europe, or elsewhere are forced to “itemize,” meaning they often pay taxes on almost everything they earn. As an Indian student, your first $15,750 of income is essentially tax-free.
4. FICA Tax: The 7.65% You Should NOT Pay
F1 students are generally exempt from Social Security and Medicare (FICA) taxes for their first 5 calendar years, provided they are still “nonresidents” for tax purposes.
- Check your Pay stub: If you see “SS” or “Med” taxes being deducted from your CPT or OPT pay check, your employer is making a mistake.
- How to fix it: Ask your employer for a refund first. If they won’t help, you must file Form 843 with the IRS to get your money back.
How KKCA Secures Your Status
Filing incorrectly (e.g., using TurboTax, which often forces students into “Resident” status) can lead to visa complications later. At KKCA, we support students by:
- Treaty Optimization: We ensure Article 21 is correctly applied so you get your $15,750 deduction.
- OPT-to-H1B Transitions: We manage the complex “Dual-Status” year when you move from FICA-exempt student to tax-paying professional.
- FICA Recovery: We help you prepare the documentation needed to reclaim Social Security taxes wrongly withheld by employers.
Call to Action
Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.
Frequently Asked Questions (FAQ)
Q: Can I use TurboTax to file my taxes? A: No. TurboTax is designed for U.S. residents (Form 1040). Most F1 students must file Form 1040-NR. Using the wrong form is considered a violation of your tax filing requirements and could impact your future Green Card application.
Q: I have a remote internship for an Indian company. Do I pay U.S. tax? A: Generally, if you are physically in the U.S. while doing the work, the IRS considers that “U.S. source income,” even if the company is in India. This is a complex area, contact us for a review.
Q: Do I need an SSN to file Form 8843? A: No. If you have no income and are only filing Form 8843, you do not need an SSN or an ITIN.
Q: Does the OBBB affect my student taxes? A: The OBBB increased the standard deduction you can claim via Article 21 to $15,750. However, it also introduced stricter AI monitoring for 1099-K forms (payment apps), so ensure any gig work is properly reported.
Disclaimer
This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.