If you’re working in the U.S. on an H-1B visa, understanding your tax obligations is essential — especially if you’re transitioning from F-1 student or OPT status.This guide breaks down everything you need to know, from what taxes you owe to how to file, what deductions you can claim, and key deadlines to watch.
H-1B visa holders generally pay the same taxes as U.S. citizens:
1. Federal Income Tax Your U.S. employer withholds federal income tax from each paycheck. The amount depends on your salary and the information you provide on your W-4 form. This is filed annually via Form 1040 or 1040NR.
2. Social Security and Medicare (FICA) Taxes H-1B holders must pay FICA taxes — 6.2% for Social Security and 1.45% for Medicare. Your employer also matches these contributions. Unlike F-1 students, there’s no FICA exemption.
3. State and Local Taxes Depending on where you live and work, you may owe state or local income tax. States like California and New York impose state income tax, while others like Texas do not.
| Form | Purpose |
| W-2 | Shows annual wages and taxes withheld (issued by employer) |
| Form 1040 | Standard federal tax return for resident aliens |
| State Return | Required in most states if income was earned there |
| FBAR / FinCEN 114 | Required if you held foreign accounts totaling $10,000+ at any time in the year |
One common question is how taxes for H-1B workers compare to those for F-1 international students or other visas. The difference mainly comes down to tax residency status and FICA exemptions:
| Category | F-1 Student (Pre-OPT) | F-1 OPT (Post-Graduation) | H-1B Worker |
| Tax Status | Nonresident Alien | Nonresident Alien (usually) | Resident Alien (once SPT met) |
| Federal Tax Return | Form 1040NR | Form 1040NR | Form 1040 |
| Social Security & Medicare (FICA) | Exempt | Exempt | Required from day one |
| Standard Deduction | Not allowed (except Indian students) | Not allowed (except Indian students) | Allowed (e.g. $14,600 in 2024) |
| Substantial Presence Test (SPT) | Days do not count (5-year exemption) | Days do not count | Days do count |
| Form 8843 Required? | Yes | Yes | No |
| China Tax Treaty Benefit (Chinese citizen applied) | $5,000 income exemption (up to 5 years) | $5,000 income exemption (up to 5 years) | Not applicable |
| Worldwide Income Taxed? | No | No | Yes |
To determine if you’re a resident or nonresident for tax purposes, the IRS uses the Substantial Presence Test:
You are a resident alien if:
You were physically present in the U.S. 183 days or more over the past three years, calculated as:
All the days in the current year
1/3 of the days in the prior year
1/6 of the days in the year before that
F-1 visa days don’t count (for the first 5 years), but H-1B days do. Most H-1B holders become tax residents in their first or second year.
Once you're classified as a resident alien, you can claim several benefits:
Standard Deduction ($14,600 for single filers in 2024)
Child Tax Credit (if child has SSN)
Education Credits (if you or your spouse pay for U.S. college tuition)
Student Loan Interest Deduction (if repaying student loans)
Foreign Tax Credit (if you pay taxes on income from your home country)
IRA/401(k) Contributions – Reduce taxable income
Nonresidents (Form 1040NR) have fewer options, typically limited to itemized deductions like state taxes and U.S. charitable donations.
January 31 – Receive W-2 from employer
April 15 – Federal and most state returns due
October 15 – Extended filing deadline (if you request one)
Use Reliable Software – TurboTax, H&R Block, and TaxAct support resident filings. For 1040NR, consider Sprintax
Hire a CPA for dual-status years, foreign income, or if you’ve changed visa types.
Track your entry/exit dates to calculate tax residency accurately.
Report all income, including side gigs, interest, or foreign accounts.
Avoid double taxation using the Foreign Tax Credit or a tax treaty.
Contribute to retirement plans early to reduce taxable income.
If you’re laid off or approaching the end of your H-1B’s 6-year limit, don’t panic. You may be able to stay and continue working in the U.S. by enrolling in a qualified graduate program that offers Day 1 CPT (Curricular Practical Training).
✅ Learn how Day 1 CPT can help you:
Avoid falling out of status
Continue working without interruption
Maintain lawful presence in the U.S.
Understanding your tax obligations as an H-1B worker, especially after coming from F-1 or OPT status, can help you avoid penalties and maximize your refund. Know your residency status, file on time, and claim any deductions or treaty benefits you qualify for. If in doubt, seek professional help.