F-1 OPT Taxes 2026: What International Students and Graduates Owe

Your tax status: probably a nonresident alien

Immigration status and tax status are separate systems. For federal income tax, you are either a resident alien (taxed like a US citizen on worldwide income) or a nonresident alien (taxed mainly on US-source income). The dividing line is the substantial presence test: 31 days in the current year and 183 weighted days over three years (all current-year days + 1/3 of last year's + 1/6 of the year before).

Here is the part that saves most students: F-1 students are "exempt individuals" for their first 5 calendar years in the US. Your days simply do not count toward the test, so you remain a nonresident alien no matter how long you have actually been here. Calendar years are the key word — arrive in August 2021 and you burn all of 2021 as year one; your exemption runs through 2025. The five years need not be consecutive, and they are cumulative across separate F-1 stays.

Form 8843: the form everyone forgets

Every F-1 student who is an exempt individual must file Form 8843 (Statement for Exempt Individuals) for each year they are present — even if you earned zero income. It is not a tax return; it is the informational statement that tells the IRS why your days do not count. File it by the 1040-NR deadline (generally April 15); if you file a 1040-NR, attach the 8843 to it. If you have no return to file, mail the standalone 8843 to the IRS. Skipping it is the single most common compliance failure among international students.

If you earned money: Form 1040-NR

Had US-source income — OPT wages, on-campus work, stipends, taxable scholarships? You file Form 1040-NR (US Nonresident Alien Income Tax Return), not the regular 1040. Key differences from what your American classmates file:

• No standard deduction. Nonresident aliens generally cannot claim the standard deduction (one major exception: students from India can claim it under the US-India tax treaty). You itemize eligible deductions instead, which for most students means little beyond state taxes paid.
• Tax rates are the same graduated brackets as everyone else on your effectively connected income.
• Filing deadline is April 15 for employees (June 15 for some other NRA categories).
• State returns are separate and almost always required where you worked — states do not follow the federal exempt-individual rule uniformly, so check your state's guidance.

OPT income and the FICA question

OPT wages are fully taxable as ordinary income — there is no student exemption from income tax. But there is a valuable payroll-tax break: nonresident aliens in F-1 status are exempt from Social Security and Medicare (FICA) taxes under IRC §3121(b)(19), saving you 7.65% of wages. Two conditions: you must actually be a nonresident alien for tax purposes (within your 5 exempt years), and the employment must be authorized (OPT, CPT, or on-campus work). Once you become a resident alien for tax purposes — typically in year six — the FICA exemption ends and you pay like everyone else. If an employer wrongly withholds FICA, you can request a refund from the employer first, then from the IRS.

SSN vs ITIN

To work on OPT you need a Social Security number — apply through the Social Security Administration with your EAD card and job offer; it is free. If you have US tax reporting obligations but are not eligible for an SSN (for example, a non-working spouse), you apply for an Individual Taxpayer Identification Number (ITIN) with Form W-7. Do not use someone else's number, and do not invent one — mismatched numbers are a fast track to IRS notices.

Tax treaties can save you real money

The US has income tax treaties with dozens of countries, and several give students specific breaks you claim on the 1040-NR:

• China: up to $5,000 of wages/scholarship income exempt under Article 20
• India: eligible for the standard deduction (the big exception noted above), plus other provisions
• South Korea, Canada, and others: various scholarship and personal-service exemptions

Treaty benefits are not automatic — you claim them on the return (and your employer may need a Form 8233 to stop withholding). Read the actual treaty article for your country; summaries on the internet are frequently wrong about limits and conditions.

After the 5 years: you become a resident alien

In calendar year six, your days start counting toward the substantial presence test, and most graduates who stayed continuously will meet it — meaning you file Form 1040 like a US person, report worldwide income, and claim the standard deduction. The transition year can be a dual-status year (part nonresident, part resident) with its own filing quirks. This is also when FBAR and Form 8938 foreign-account reporting can kick in if you hold accounts back home — a whole new compliance world that surprises many former students.