CPT tax for international students

Question

Hi, I am international student doing MBA in Chicago.

I am currently on CPT. I work as a consultant and earning around 70K per year.

How much tax my employer supposes to cut from my pay?

Will I get tax back from the government at the end of the year? If yes How much?

I will appreciate your help on this matter. I am also looking for official site or documentation regarding the same.

Answer 1

Everyone on F1/OPT/CPT is exempt from residency for 5-years that is your income is not subject to FICA taxes. You must file non-resident tax return. You get deduction based on the tax treaty between your country and the U.S.

Read: http://taxipay.blogspot.com/2008/03/us-t...  

Answer 2

www.irs.gov  has all your answers.

Answer 3

OPT = Optional Practical Training.  CPT = Curricula  Practical Training.  OPT is for one year after graduation.  CPT is a coop position and requires them to be registered in a class at the same time.    

Are you still on the student visa? What year did you first arrive?  What country are you from?

India has a great treaty.  As a student from India you get the standard deduction (worth $5450) along with the $3500 personal exemption.  Thus you will pay no income tax on $8950 of income.  Every dollar above that is taxable.

Answer 4

That's going to depend upon a number of factors.  I assume that you are referring to OPT, not CPT.  OPT is Optional Professional (or Practical) Training.  I've never heard of CPT before.

What visa are you on?  Generally if you are on a student visa you are treated as a non-resident alien for your first 5 years here in the US.  That means that you pay higher income taxes than citizens or resident aliens, although you would not be subject to FICA and Medicare taxes.  If you've been here for 5 or more years then you are taxed as a resident alien (same as a citizen) and although your income tax bill will drop, you'll start paying FICA and Medicare taxes.

You can get a rough idea on what will be withheld from your pay by going to this site:  http://www.paycheckcity.com  This will not be completely accurate for your situation if you're still on your first 5 years in the US on your student visa, however it will be fairly close over all.

Get a copy of IRS Pub 519 from the IRS website.  Here's a link:  http://www.irs.gov/pub/irs-pdf/p519.pdf  It will tell you most of what you will need to know and will refer you to other IRS pubs as needed.

Edit:  OK, I stand corrected on the definitions.  And v b is correct in that your nationality can affect your tax liability as there are some tax treaties that confer preferential treatment to citizens of some countries.  IRS Pub 519 does touch on that as well.

Answer 5

i have only done a few of these and find them confusing.  If you are going to be considered a Non-resident you should make sure that the employer is not taking out the FICA tax as it is difficult (at best it takes a long time)to get back.