October 27, 2009

Do J-1 Participants Pay Taxes?

"Certainty? In this world nothing is certain but death and taxes." - Benjamin Franklin

Ben Franklin was a wise man.

Yes, J-1 intern and trainee participants do pay taxes while in the U.S. They will pay some but not all taxes that U.S. citizens/residents pay, including city state and federal taxes. J-1 participants are not required to pay FICA (Social Security and Medicare Tax) or FUTA (Federal Unemployment Tax).

In the Global Current Welcome Packet, we include instructions on how to complete the W-4. The instructions we provide are intended to prevent him/her from owing any taxes at the end of the year.

Remind J-1 participants that they will need to file a Federal Tax Return and possibly a State Tax Return in order to receive any money that was withheld from the stipend that is due back to him/her. This is often the last thing on a participant's mind if they finish the program before tax season or if they are participating in a program that spans over two calendar years. Please let them know that filing a return is mandatory for each year that they participate in a J-1 program.

To make filing easier for our participants, Global Current provides information for a filing service called Taxback.com.