Residents for Tax Purposes: Filing Federal and State Income Taxes in the U.S.

Overview

If you are a resident for tax purposes, generally speaking, you will be subject to tax in the same way as a U.S. citizen.  It is important to note U.S. citizens are taxed on their worldwide income.  Thus, if you are a resident alien for tax purposes, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income (whether originating within the U.S. or elsewhere) on your U.S. tax return.

What You Need to File and When

If you are a resident for tax purposes, you may need to file a federal and/or state tax return:

Federal Tax Return

Federal taxes are those paid to the U.S. central government Internal Revenue Service (IRS).  To clarify whether or not you had enough income to file taxes, please see the "Do You Need to File a Federal Income Tax Return" tool on the IRS website.

State Tax Return

In addition to a federal tax return, you may also have to file a State of Illinois income tax return.  If you resided and/or worked in more than one U.S. state during the past calendar year, you may have to file tax returns in all the states in which you resided or worked. You should check the state revenue website of the other state(s) where you lived and worked to figure out your tax filing obligations.

If you do not want to pay to use a tax filing software or professional preparer for your state return, you can file  Form IL 1040 (Instructions) on your own if you resided in Illinois in the previous calendar year. Once you complete your federal return, it will be fairly straightforward to calculate your state taxes by hand using that tax form. The 1040 is for Illinois only.  If you resided in a different state for all or part of last calendar year, you will likley need to file paperwork for that state, as well.

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Deadlines and Timelines:

  • You must file your 2016 tax return by: April 18, 2017
  • This is the case for both federal and state tax returns.

Need More Time? About Tax Filing Extensions

You may find that you need additional time to file your taxes.  If you need additional time to file your federal return, you can file for an Automatic Extension of Time to File Your U.S. Tax Return.  You should submit the extension form before the deadline listed above.  More information can be found on the IRS link above.

The information above is for the federal return only.  If you are required to make any state filing, you may need to apply for a separate extension.  Information about Illinois State tax extensions can be found on the Illinois revenue website. If you received income from other states, you will need to review the regulations for those specific states.

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Filing as a Resident for Tax Purposes

As a resident for tax purposes, you can use the same tools and forms that a U.S. citizen or permanent resident could use.  This means, you could use resident tax preparation software (e.g. Turbo Tax, H&R Block, etc), file by hand yourself, or go to a tax preparation service.  Unless you are very familiar with filing U.S. tax returns, we recommend you use a software or go to a professional.

On their website, the IRS lists several companies that provide a free tax filing if you meet certain criteria.  Often these companies provide the federal return for free and prepare any necessary state returns for a fee. 

As a resident for tax purposes, you will not be able to use software that has been made specifically for non-residents, such as Glacier or Sprintax.  This is true even if you have used these programs as a non-resident in the past.

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Filing Assistance

Important note: OIA does not have tax experts and therefore cannot, by law, answer specific tax questions or help you prepare your tax forms. Ultimately, it is your responsibility to meet your tax obligations and do so accurately.

Helpful Publications and Websites

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FAQs: Residents for Tax Purposes

Q. What tax form will I get for my scholarship/fellowship payment?

A. Domestic students will not receive a tax form. Scholarship stipends are considered by the IRS to be self-reported income, so there is no tax form that you would receive, even though you are required to report and remit taxes on this income.

Q. I want a tax form to document my scholarship/fellowship payments. Can the University of Chicago create a 1099-MISC or W2 with my scholarship/fellowship payments?

A. No. Each tax form has specific requirements for the information it reports. The IRS does not require that the University provide any tax documents for scholarship/fellowship income to U.S. Citizens, Permanent Residents and Residents for Tax Purposes.

Q. I do not know how much scholarship/fellowship I received in calendar year 2011. How do I find out?

A. There is no one place at the University of Chicago that would house all of this information. Your Dean of Students provides financial aid letters to students each year which include the financial aid package.

Q. Am I eligible for the Earned Income Tax Credit (EITC)?

A. To qualify for EITC you must have earned income from employment, self-employment or another source and meet certain rules. Also, you must either meet the additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.  Visit the IRS website for further details.

Q. Can I deduct books and supplies on my tax return?

A. Please review IRS publication 970 for information on acceptable educational deductions.

Q. I have never filed taxes claiming my scholarship/fellowship payments in previous years. Can I do so now?

A. Yes. If you filed a previous tax return for a calendar year, you should file an amended tax return (IRS form 1040X and Illinois state form IL-1040X). If you have never filed (i.e. only had scholarship/fellowship income and did not file any tax return for a calendar year), you need to file an original tax return.

Q. I do not want to pay estimated quarterly tax payments. Can I just pay in full when I file my tax return?

A. The IRS and Illinois State have requirements for filing estimated tax payments. Typically, if you will owe more than $1000 for federal taxes and $500 for Illinois State, you should be paying estimated quarterly payments. If you do not pay estimated tax payments when required to do so, the IRS and Illinois state may assess a penalty for late taxes.

Q. How do I include my Scholarship/Fellowship income on my federal and state tax return and not have the IRS and Illinois State think this is self-employment income?

A. The IRS details how to file scholarship/fellowship income here.

Q. What is the deadline for tax filing?

A. For 2016 tax returns, the deadline is April 18, 2017. This means the forms must be post-marked by this date. The IRS does not have to receive the documents by this date.

Q. Will I get a notification that my tax returns was received or processed?

A. No. You will only be contacted via US mail (not by email) if something is missing or incorrect.

Q. How long will it take to get my refund?

A. The sooner the tax return is filed, the quicker the return. For instance, if you file in February or early March, the processing time is approximately 2-6 weeks. If you file in early April, the processing time is 2-8 weeks.

NOTE: As of the 2015 processing year, returns are taking 6-12 months to be processed.  This trend is expected to continue for the 2015 tax filing year.

Q. My spouse also has income, can we file together?

A. If you are a resident for tax, you and a spouse can file a joint tax return. You may have the option to file ‘Married Filing Jointly’ or ‘Married filing separately’. There is no “better” way to file – it is what is best for your tax situation and this can vary between individuals, couples and families.

To claim a spouse or dependent who does not have an SSN or ITIN: 

  • Complete W7 and attach appropriate documents per instructions for each individual who needs an ITIN.
  • Complete federal tax return.
  • Mail completed W7 applications and completed 1040 to the W7 address. ITIN applications will be processed first, then the federal tax return will be forwarded for processing.

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