J1 students leave €1m behind in unclaimed US taxes every year

IRISH students leave more than €1 million behind in unclaimed taxes in the US each year when they finish their working holidays.

Thousands of Irish students travel to the US each summer on J1 visas and are entitled to receive tax back on money earned.

Taxback.com reports that Irish students leave up to $1.6m (€1.1m) unclaimed in the US each year.

Figures from 2007 to 2009 show a drop of about 20% in the average amount claimed back, which taxback.com says reflects the fact that students working in the US on J1 visas are earning less in recent years due to the recession. They said however that they expect things to improve in 2011.

The personal tax exemption threshold in the US is $3,700 which means that most students are in a position to make a claim when they return.

The average refund each Irish student receives is $800 (€555). Taxback.com said Monday is the deadline for more than 8,000 students who were in the US in 2007 to reclaim their tax.

Aoife Twohig of taxback.com said: “We believe that a sizeable proportion, probably about 20% of 2007 students, have yet to reclaim their tax which typically amounts to about $800 each. With more than 30,000 J1 visas granted to Irish students between 2007 and 2010, the vast majority of these students are eligible to file for tax refunds for income earned during these years.

“We are urging these students to take action before it’s too late — the right to claim becomes null and void after four years,” she said.

Temporary workers in the US including J1 students are legally obliged to file a US tax return. Anybody who applies for a US visa or a green card and who has been in the US before has to produce copies of their tax returns for the last five years.

“While we can’t guarantee that people only applying for 2007 refunds now will get in before the cut-off point, it is certainly worth filing a tax return to comply with US guidelines and avoid jeopardising future visas,” said Ms Twohig.

Students looking to claim tax can download the form on taxback.com.


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