When you start a job, your employer will ask you to complete Form W-4. They’ll provide it to you on your first day of work because they need it to know how much money to withhold from your paycheck for taxes.
The reality is many U.S. citizens don’t even know how to properly fill this out! So, if you’re a non-US citizen, don’t be surprised if you also find this form confusing. But don’t try cheating off your neighbor as it won’t work here! You need to fill it out specifically to your personal situation.
Follow the below instructions or simply reach out to us directly to make sure you get this form completed correctly. Getting it right upfront will save you big headaches later.
Determine whether you are a ‘resident’ or ‘non-resident alien’ taxpayer
The purpose of Form W-4 is to instruct your employer how much to withhold from each paycheck to cover your tax obligations. In order to know what to tell your employer, you need to know first whether you will be filing your taxes as a ‘resident’, using Form 1040, or a ‘non-resident alien’, using Form 1040NR. There are significant differences in the rules between the two which will impact your final tax liability and thus how much money should get withheld.
If you don’t yet know whether you’re a resident or non-resident, start with this blog or reach out to us at Visor directly. Once you know that you’re a non-resident, continue on for instructions on filling out Form W-4.
Form W-4 instructions for non-resident alien taxpayers
Once you’ve determined that you are a non-resident alien taxpayer, we’ve prepared simple instructions to help you fill out the form.
The below cheat sheet will save you from having to read the IRS’s instructions in Notice 1392. You can follow along by pulling up a copy of Form W-4.
- Section 1: We’ll assume you can handle filling out your name and other personal information.
- Section 2: You are required to have a social security number. If you don’t yet have one, you can apply for one. You cannot use an ITIN.
- Line 3: Select “single” regardless of your actual marital status.
- Line 4: Ignore this line, unless your last name differs from the name listed on your Social Security card
- Line 5: Claim “1” withholding allowance on this line.
- Line 6: On the dotted line after “each paycheck,” write “non-resident alien”
- Special note to Indian citizens: skip this step! See the next section for further explanation.
- Line 7: Do not claim to be “exempt,” even if you think you meet the conditions.
Now just sign and date the form and you’re all done! That’s all you need to know!
Special instructions for Indian citizens
If you are a citizen of India, you benefit from a tax treaty signed with the U.S. government. This tax treaty entitles you to additional deductions and credits that most other non-resident alien taxpayers can not take.
What this means is you need to fill out your Form W-4 accordingly to have your paycheck withholding set correctly. As a result, you do not need to write “non-resident alien” on the dotted line section of line 6. Simply do not write anything there. All the other steps in the instructions outlined above still apply to you though.
Important note on the new tax law
A quick heads up that there was a major reform to the US tax code signed into law at the end of last year, which is effective starting with the 2018 tax year. While there were many changes, a couple of those impacted the tax treaties signed between the U.S. and Canada, Mexico, and South Korea.
We point this out because if you are a citizen of one of those countries, you used to have special instructions on how to fill out Form W-4 too, similar to what we provided above for Indian citizens. With the new tax law, you no longer need to worry about those. Instead, refer to the general non-resident alien instructions when filling out your Form W-4 withholding.
The IRS hasn’t yet updated Notice 1392 to properly reflect the new tax law, so you’ll have to trust us on this. We’ll keep you updated if the IRS eventually posts revised instructions (UPDATE: the IRS issued a revised Notice 1392 in Oct 2018 so you can double-check any items outlined here to the publication if so inclined).
Visor is a year-round tax service. That means, unlike the other guys, our tax advisors are available to help you at any time during the year with filling out your Form W-4 correctly. Getting it wrong can cost you a lot of money and time down the road. So reach out to us now to and make sure your taxes are withheld properly from the onset.
Visor is one of the leading tax providers for non-US citizens, particularly for international graduate students and other young professionals. Sign up and take comfort knowing all your tax needs are in expert hands.
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