Exemption for Self-Employed Nonresident Aliens

The self-employment income of nonresident alien students and teachers are exempt from self-employment tax. The exemption is lost if an alien becomes a resident.

Foreign scholars, teachers, researchers, trainees and other nonstudents who enter the U.S. in J-1 or Q-1 immigration status will lose this exemption on January 1 of their third calendar year in the U.S.; and foreign students who enter the U.S. in F-1, J-1, or Q-1 immigration status will lose this exemption on January 1 of their sixth calendar year in the U.S.

Generally, immigration law does not authorize nonimmigrants (such as nonresident alien students and teachers) to earn self-employment income. Nonresident alien students and teachers who earn self-employment income in violation of their nonimmigrant status must pay self-employment tax. Such returns are Out of Scope for the VITA/TCE Foreign Student and Scholar program.