State Income Taxes
The income tax laws of the District of Columbia, Maryland, and Virginia (referred to as the tri-state area) in some ways parallel and in some ways diverge from Federal laws. You may wish to consult the instruction booklets for the state returns that apply to you and contact state taxpayer assistance help lines for more detailed information. This section will provide a general overview of state taxes.
In general, international students and scholars whose income exceeds the allowable standard deduction and exemptions for their state of residence may be required to file a state income tax return. Specific information relating to state taxation in our tri-state area is provided below.
State Residency vs. Nonresidency
The levy of income tax in the tri-state area is based on the location of residence rather than on place (or source) of income received. For example residents of Maryland (MD) and Virginia (VA) who work in DC need to pay only taxes to MD and VA, respectively.
All three states have a similar definition of who is a resident. Two tests generally determined residency:
- actual residency (abode), and
- legal residency (domicile)
Under the actual residency test, if you simply live in DC (for 183 days or more) in VA (for more than 183 days) or in MD (for more than six months), then you are a resident of that state. To "simply live" there means to rent an apartment, a dorm or a temporary house. Most international students will qualify during most, if not all of their education with GW, as a resident of the state in which they actually live.
It may be possible, during a first or last semester at GW, to not meet the residency requirements of one of our three local states. If this is the case and state tax is withheld from your paychecks. You will be able to get the money back by filing a claim for refund on a return of the state where the tax was withheld (i.e., DC, MD or VA).
Under the legal residency test, an international student or scholar will qualify as a resident of DC, MD or VA when he/she or a household family member has an intention of living in the state permanently or on a long-term basis. Examples of intention include: (a) you have made arrangements with an area company to begin employment in the year of graduation; (b) you have other family members in the area and you really believe that you will stay there after graduation; (c) your parents had a home in DC or VA (at any time during the year) or in MD (on December 31st) and you live with them or lived with them prior to moving to a dorm or to an apartment, or; (d) if you own or owned your home in one of the states. If one of these situations applies, you are a legal (domiciliary) resident of the relevant state.
All nonresident alien students and scholars holding F-1, J-1, M-1 or Q-1 status and receiving any form of payment from within the United States must each file an annual tax return with IRS. The form to file is Form 1040-NR, U.S. Nonresident Alien Income Tax Return. Form 1040-NR must be filed with the IRS by April 15 of the following year if the income received was earned for the performance of services. If the only money received was via scholarship, fellowship, or stipend, then the return is due June 15.
Once the student or scholar qualifies for resident alien status, however, he/she should no longer file Form 1040-NR, unless required to do so under the dual-status alien filing requirements (see IRS Publication 519 (PDF)). Resident aliens have the same tax responsibilities as U.S. citizens and must file Form 1040.
You may want to consult IRS Publication 519, or a tax professional to determine whether you must file a return and which form to file.
Students and scholars who are residents of DC or MD must file a state income tax return, generally by April 15, whenever they are required to file a federal return (or when requesting a refund) even if they are only residents of the state for part of the year. The filing requirements for residents of VA include a gross income threshold, which is different from the federal filing limit. Check the VA Form 760 instructions for details. VA returns are due May 1. VA has a separate form called 760PY for part-year residents while MD and DC ask questions about part year residency on their main tax forms (D-40 for DC and 502 for MD).
In general, the same filing status that was claimed on your federal return must also be claimed on your state return. One exception to the filing status requirements that may be significant for nonresident aliens who are residents of DC, is that even though each spouse is required to file a separate return for federal purposes, they may file a joint return for DC purposes.
Lastly, all income reported on the federal return must be reported on the state return. This includes taxable stipends.
Withholding Forms and Certificates of Nonresidence
If you are a resident of DC, MD or VA, you must file a state withholding form to notify Payroll Services of the correct amount of state tax to withhold from your compensation. Without such a form on file, the university is required to withhold taxes as single marital status and are permitted zero personal exemption allowances in DC, VA, and MD.
The higher the number of personal exemption allowances you claim, the lower the amount of tax withheld. This is because each allowance reduces your income on which tax withholding is computed. You must, however, claim the number of allowances that will most accurately reflect your tax liability by the end of the year.
The withholding forms of the tri-state area are as follows:
- District of Columbia, Form D-4
- State of Maryland, Form MW 507
- State of Virginia, Form VA-4
Nonresident aliens may not claim "exempt" status on their Forms D-4, MW 507, or VA-4.
If you commutes to campus or another GW worksite within DC FROM OUTSIDE of the tri-state area, then you may file a DC Form D-4-A, Certificate of Non-Residence in the District of Columbia to avoid DC income tax withholding. If you are a resident of and commuted from Kentucky to a worksite on the VA campus, you may file VA Form VA-3, Certificate of Nonresidence of the Commonwealth of Virginia to avoid VA income tax withholding. If you are a resident of and commuted from either Pennsylvania or West Virginia to a GW worksite in MD, you may complete line 4 of MD Form MW 507 to certify nonresidence in MD and to avoid MD income tax withholding. These are the ONLY situations in which a Certificate of Nonresidence should be filed with the university. In all other circumstances, state income tax withholding forms must be filed.
TIMELY SUBMISSION AND ACCURACY OF TAX WITHHOLDING FORMS ARE THE RESPONSIBILITY OF THE STUDENT OR SCHOLAR.