I am an international student on F1-OPT Visa, working for a software firm. I need to transfer money to my cousin who is a US Citizen. Does this have tax implications?

[nishchay-thebigp]

I am an international student in USA, working for a software firm on F1-OPT Visa. 

I need to transfer money to my cousin who is a US Citizen. I plan to pay monthly in installments of 1-2K for around 1-2 years.

Will this have any tax implications or raise any questions?

[tagteam]

Please check back later. I will page Champ @pk.

[pk · Accepted solution]

@nishchay-thebigp , while I am not familiar with the on-line product and its screens, 

(a) if you are  an NRA during this period ( i.e. you have not passed the SPT ), then there is No implication  for US purposes and nothing to re[port

(b)  if you are resident for tax purposes ( passed SPT after the exemption period ), you are treated as US person  and taxed on world income.  You also come under the gift tax reporting --- each year there is free gift amount ( for 2024 it is US$18000 per donor per donee ).  Since you may go over this amount, you have to report this on form 709,  but there is NO current tax implications .  It just acts as a deduction to your life time  Gift Tax credit .

(c) The question that is always there is why you are  committed to paying an essentially constant amount for a couple of years -- is it  paying for something  that you are  jointly buying ( what and tax implications thereof ) or paying back on a loan ( in which case there is interest earning implications for the recipient) or something else .  You may want to share this ( if not here then by PM )

Is there more I can do for you ?