What the “One Big Beautiful Bill” Means for International Students, Nonresident Taxpayers, and Investors in the U.S.
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act into law — a sweeping reform that merges tax policy changes with federal spending cuts.
While most headlines have focused on defense, healthcare, and border funding, this legislation also carries important tax implications for international students, scholars, investors, and other nonresident taxpayers in the U.S.
Here’s a breakdown of what’s changing — and how it may affect you.
⚙️ Stricter Eligibility for Tax Credits
Previously, some nonresident taxpayers — especially those with children or spouses in the U.S. — could qualify for certain credits. Under the new law, eligibility is now significantly limited.
To claim Child Tax Credit, Child Care Credit, or Earned Income Credit, both the filer and the dependent must have valid Social Security Numbers (SSNs).
Additional updates include:
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ITIN holders are now ineligible for all child, education, and related tax credits.
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Premium Tax Credit is restricted — individuals under TPS, asylum, or non-permanent status without an SSN valid for work no longer qualify.
In short: no valid SSN = no access to major tax credits.
💵 New Exemptions and Deductions
Several new exemptions will apply only to individuals with valid SSNs authorized for work in the U.S.:
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Tip income: non-taxable up to $25,000
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Overtime pay: non-taxable up to $12,500 — income above that threshold is taxed normally
Other notable tax code updates include:
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SALT deduction cap raised to $30,000 (or $15,000 for married filing jointly)
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Standard deduction remains doubled and permanent — but only for U.S. citizens and residents
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Charitable deductions (non-itemized) reinstated from 2025–2028: $150 (single) / $300 (joint)
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1099-NEC threshold increased to $2,000
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1099-K threshold restored to $20,000 and 200+ transactions
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Backup withholding threshold also increased to $2,000
However, several deductions have been fully eliminated, including:
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Personal expense deductions
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Itemized deductions exceeding 2% of adjusted gross income
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Moving and relocation expenses
For many nonresidents without a valid SSN, these changes mean fewer deductions and higher taxable income.
💸 1% Tax on Remittance Transfers
One of the most significant updates for nonresidents is a new 1% excise tax on money transfers (remittances) sent abroad.
Unless you’re a U.S. citizen/national or use a verified remittance provider partnered with the U.S. Treasury, this tax will apply to most international transfers.
For international students, temporary workers, and nonresident taxpayers sending funds home, this will increase the cost of money transfers starting in 2026.
📈 How the Bill Affects Nonresident Investors
Good news for investors — the final version of the bill did not include the proposed Section 899, which originally targeted FDAP income (Fixed, Determinable, Annual, or Periodic income).
That means no major changes to dividend or investment income taxation for nonresident investors in 2025.
🏥 Healthcare Impacts
Although the bill does not directly address tuition or visa policies, some indirect health-related effects could still matter for nonresidents:
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Medicaid eligibility tightened with new work and ID verification requirements
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ACA subsidy cuts could affect nonresidents who later change visa status (for example, from F-1/J-1 to H-1B)
F-1 and J-1 students remain exempt from ACA mandates, but future visa transitions could expose them to new healthcare-related tax obligations.
💡 What J1 Summer Tax Back Clients Should Know
If you’re an international student, research scholar, or exchange visitor (J-1) in the U.S., here’s what to keep in mind:
✅ Always file Form 8843 annually — even if you earned no income.
✅ If you earned income, file Form 1040-NR and check for treaty benefits from your home country.
✅ Maintain visa compliance while working under CPT, OPT, or STEM OPT.
✅ If you’re planning to transition to H-1B or another status, understand how your tax residency and obligations may change.
At J1 Summer Tax Back, we’re dedicated to helping nonresidents stay compliant, claim eligible benefits, and navigate the latest U.S. tax changes with confidence.
🚀 Final Takeaway
The One Big Beautiful Bill Act represents one of the most significant U.S. tax overhauls in years.
While it introduces stricter credit eligibility and a new remittance tax, it also simplifies certain rules for workers and investors with valid SSNs.
For international students and nonresidents, understanding these changes early means you can stay compliant, avoid penalties, and plan smarter for your financial future in the U.S.
Stay tuned as J1 Summer Tax Back continues to provide expert guidance and resources to help you manage your U.S. taxes — clearly, confidently, and on time.