Foreign Exchange Student

[tonia2021]

How do you handle payroll for a foreign exchange student? Do you handle the pay the same by withholding all taxes? My client just called and was just told that he prepared 2008 payroll incorrectly because he mailed them a W2.

[Burke]

Does student meet the criteria for resident alien?

[Koss]

Foreign Exchange Student

Foreign Exchange Student does not, to my knowledge, have a formal definition under the tax law. And even if it does, the term may be used loosely. Are we talking about a high school student or a college student?

What kind of visa does the kid have?

And what country are they from?

You can't answer the original question without this information.

With that said, here's my educated guess:

Nonresident alien. Temporary visa that is not "immigration track." Not in the US long enough to qualify as a "nonresident alien treated as a resident alien for tax purposes."

May be exempt from FICA. May be exempt from federal income tax if there is a tax treaty between their country and the US.

Employer may need to issue something called Form 1042-S instead of Form W-2.

I haven't worked on this sort of thing for a while. It's a trip and a half.

Good luck...

:-P

BMK