Question:   Are nonresident alien students, with F-1 or J-1 visas and employed by a U.S. company during the summer, required to have federal income taxes withheld from their paychecks?

Answer:   Wages and other compensation paid to a nonresident alien for services performed as an employee:

• Are usually subject to graduated withholding at the same rates as resident aliens and U.S. citizens.
• Is subject to graduated withholding unless it is specifically excluded from the term "wages" by law, or is exempt from tax by treaty.
• Nonresident aliens must follow modified instructions when completing Form W-4 (PDF). Please refer to Publication 519, U.S. Tax Guide for Aliens, for directions on completing Form W-4 (PDF), Employee's Withholding Allowance Certificate.