Intern's income taxes

Q-1) If the intern intends to work in the U.S. after completion of the internship, is the
remuneration taxed the same as a local employee?

A-1) Please review the following website.

http://www.ice.gov/graphics/sevis/factsheet/061404emp_fs.htm

Income Taxes:
All wages that an interns earns while in the U.S. are subject to withholding“income tax.”
As a J-1 visa holder, your country may have a Tax Treaty with the U.S. allowing you to earn a
certain amount of income “tax-free”. For example, Germany has a tax treaty which permits
J-1 visa holders to earn up to $5,000 tax free. Any wages above and beyond the first $5,000
earned in a calendar year (January 1 through December 31) are, however, subject to standard
withholdings after Social Security, Medicare or FUTA (Federal Unemployment Tax Act) taxes
are deducted asper Prop. Treas. Reg. 31.3121(b) (19). For clarification, J-1 visa holders
from all countries are NOT subject to U.S. Social Security, Medicare or FUTA taxes.


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