On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (BBB) into law, a sweeping reform package that combines major tax updates with federal spending changes. While a lot of public focus has been on the bill’s effects on Medicaid, border security, and defense, nonresident aliens—especially J1 visa holders—will feel the impact in more direct and immediate ways.
Let’s break it down so you know exactly how this new law affects you and what steps to take to stay compliant (and avoid paying more than you should!).
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What’s in the One Big Beautiful Bill (BBB) for J1 Visa Holders?
1. Tip Income – Now Non-Taxable up to $25,000
If you work in the service or hospitality industry, you’re likely earning tips. Under the new bill:
- Tip income is non-taxable up to $25,000
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Any tips beyond that are still considered taxable income and will be subject to graduated tax rates
This is a huge win for J1s working in restaurants, bars, and tourism-related jobs. But remember—you still need to report all your tip income accurately.
2. Overtime Pay – Exempt up to $12,500
Working long hours? There’s good news:
- The first $12,500 of overtime pay is now tax-exempt
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Anything over that amount is treated as standard compensation and taxed accordingly
This change provides some relief for J1s who often work extra hours during peak seasons or in hospitality roles.
3. Deductions You Can No Longer Claim
The BBB Act eliminates several commonly used deductions, which may increase your taxable income:
- Personal expenses
- Itemized deductions over 2% of your adjusted gross income
- Moving and relocation expenses (not usually applicable to J1s, but still good to note)
While these deductions didn’t always apply to nonresident taxpayers, the clarification simplifies the process—but also removes potential tax-saving opportunities.
What Forms Do You Still Need to File?
Let’s make this simple:
- Form 8843 – Required every year, even if you didn’t earn any income. This form proves your exempt status as a nonresident for tax purposes.
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Form 1040-NR – If you earned any income in the U.S., this is your go-to tax return form. You should not file the standard 1040 form meant for residents.
Filing incorrectly can lead to complications with your visa and future U.S. travel eligibility, so this step is critical.
Stay Visa-Compliant – Tax Violations Can Hurt Your Status
A quick reminder: staying on top of your taxes isn’t just about avoiding fees—it’s also about protecting your J1 visa. Filing late or incorrectly can result in:
- Holds on future visa applications
- Trouble re-entering the U.S.
- Even denial of immigration benefits in the future
Programs under J1 such as Internship, Work and Travel, and Au Pair are designed to be cultural and educational—so keeping everything above board is part of the experience!
Read Sprintax’s full article on the tax updates here.
The One Big Beautiful Bill Act brings sweeping changes to how J1 visa holders manage their U.S. taxes. While some of the updates are helpful—like the new exemptions on tips and overtime—others may increase your taxable income. As tax season approaches, take the time to review your income, prepare the correct forms, and ask questions if you’re unsure.
At Architect-US, we’re here to support you—not just in your career, but in your full U.S. experience. That includes helping you stay compliant and confident about taxes.
Stay tuned for more updates—and as always, reach out if you need us!
