This article is for information only and is not tax advice.
This article explains why Sprintax can show that you owe US tax when you expected to be exempt, and what can reduce your tax.
Am I exempt from US tax?
Not automatically. Many nonresident aliens believe that they do not pay any tax in the US. In general, everyone who receives income in the US pays tax on it, whatever their US tax status.
Your tax can be lower, or zero, only if you qualify for a tax treaty exemption or for the deductions that nonresident aliens can claim.
Why is there no tax-free amount?
Nonresident aliens cannot claim the standard deduction or a personal exemption. The exception is students and business apprentices from India, who can claim the standard deduction under the tax treaty.
Because of this, tax can apply from the first dollar of your taxable income.
What can reduce my tax?
A tax treaty between the US and your country. Each treaty has its own rules, income types, and conditions.
Itemized deductions that nonresident aliens can claim, such as state and local income taxes and charitable contributions to US organizations.
Your tax depends on your income, your country, your visa, and the deductions and treaty benefits you qualify for.
Does being an exempt individual mean I do not pay tax?
No. The term "exempt individual" applies to the Substantial Presence Test, which decides whether you are a resident for tax purposes. It does not make your income tax-free.
What if my employer did not withhold tax?
You may owe tax even when no tax was withheld. Withholding is a payment toward your tax, and it does not decide whether you owe tax. Nonresident aliens cannot claim exemption from withholding on Form W-4.
What should I check?
Check that the income and tax withheld in Sprintax match your income documents. If you believe that a tax treaty applies to you, check that your treaty details in Sprintax are correct.