Human Resources

Each tax treaty scenario below assumes that the individual is eligible to claim tax treaty benefits, is eligible to file using form 1040NR-EZ, and has no other income from any other sources. 

For more information about your country’s tax treaty, you may refer to IRS Publication 901, U.S. Tax Treaties.

The Office of Human Resources staff cannot offer individual tax advice. Students and employees with complicated tax situations may wish to consult with a tax professional or tax attorney with nonresident alien tax experience.

Questions & Answers:

1:  I am eligible for tax treaty benefits, but federal and state taxes are being withheld from my paycheck. How can I fix this?

Answer — If you are eligible for tax treaty benefits, you must complete Form 8233 with Payroll each year to prevent tax withholding from your paycheck.

2:  I am eligible for tax treaty benefits, but social security and Medicare (FICA) taxes are being withheld from my paycheck. How can I fix this?

Answer — In general, tax treaty benefits do not apply to FICA taxes; however, you may be eligible for a nonresident alien or student FICA exemption.

3:  How do I file my tax return if I received a 1042-S statement and I did not receive a W-2 statement?

Example — Jing is a student from China who earned $4,000 in 2009.  The U.S./China student tax treaty article covers $5,000.  Jing received a 1042-S statement for $4,000.  How should she claim this on her tax return?

Answer — Jing will enter “0” on line 3 of form 1040NR-EZ and $4,000 on line 6, and on page 2, item J. 

4:  How do I file my tax return if I received a 1042-S statement for my full treaty benefit amount and a W-2 statement?

Example — Jae is a student from Korea who earned 3,500 in 2009.  The U.S./Korea student tax treaty article covers $2,000.  Jae received a 1042-S statement for $2,000 and a W-2 statement for $1,500.  How should he claim this on his tax return?

Answer — Jae will enter $1,500 on line 3 of form 1040-NR-EZ, and $2,000 on line 6, and on page 2, item J.

5:  How do I file my tax return if I earned less than the amount covered by my tax treaty, and I received both a 1042-S statement and a W-2 statement?

Example — Laura is a student from Germany who earned $6,000 in 2009.  The U.S./Germany student tax treaty article covers $9,000.  Laura received a 1042-S statement for $4,000 and a W-2 statement for $2,000.  How can Laura claim the full tax treaty benefit of $9,000?

Answer — Laura will enter “0” on line 3 of form 1040-NR-EZ, and $6,000 on line 6, and on page 2, item J.  Because Laura’s total income of $6,000 is less than the treaty benefit of $9,000, she can claim an exemption from tax on all of her income.  Her total tax treaty benefit is $6,000.  She should not report her W-2 earnings on line 3.

6:  How do I file my tax return if I earned more than the amount covered by my tax treaty, but I received a 1042-S statement for less than the treaty benefit and I received a W-2 statement?

Example — Simon is a student from France who earned $7,000 in 2009.  The U.S./France student tax treaty article covers $5,000.  Simon received a 1042-S statement for $3,000 and a W-2 statement for $4,000.  How can Simon claim the full tax treaty benefit of $5,000?

Answer — Simon will enter $2,000 on line 3 of form 1040-NR-EZ, and $5,000 on line 6, and on page 2, item J.  Although Simon did not receive a 1042-S for the full tax treaty amount of $5,000, he can still claim the full benefit.

7:  How do I file my tax return if I am eligible for tax treaty benefits, but I did not receive a 1042-S and all of my income was reported to me on a W-2?

*1042-S statements are not mailed until March 15th. If you do not receive a 1042-S statement by the end of March, you should contact the Payroll Office to determine if you are eligible for tax treaty benefits*

Example — Maria is a student from Venezuela who earned $7,000.  The U.S./Venezuela student tax treaty article covers $5,000.  Maria received a W-2 statement for $7,000 and did not receive a 1042-S statement.  How can she claim her $5,000 tax treaty benefit?

Answer — Maria will enter $2,000 on line 3 of form 1040-NR-EZ, and $5,000 on line 6, and on page 2, item J.  Although Maria did not receive a 1042-S for the full tax treaty amount of $5,000, she can still claim the full benefit.

8:  How do I file my tax return if I received a 1042-S statement for my taxable fellowship or scholarship?

The tax treaties between the U.S. and the following countries provide an exemption from tax on scholarship and fellowship income (with no income limits):

Bangladesh, Belgium, China, Commonwealth of Independent States*, Cyprus, Czech Republic, Egypt, Estonia, France, Germany, Iceland, Indonesia, Israel, Kazakhstan, Korea, Latvia, Lithuania, Luxembourg, Morocco, Netherlands, Norway, Philippines, Poland, Portugal, Romania, Russian Federation, Slovak Republic, Slovak Republic, Slovenia, Spain, Thailand, Thailand, Trinidad & Tobago, Tunisia, Ukraine, and Venezuela

* The tax treaty between the U.S. and the Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, or Uzbekistan) provides an exemption from tax on up to $10,000 of scholarship/fellowship income.

Example — Benjamin is a student from Israel who received a room and board scholarship in the amount of $9,500. He received a 1042-S statement for $9,500 and has no other income. How will he enter this on the 1040NR-EZ?

Answer — Benjamin will enter $9,500 on line 6, and on page 2, item J.

DISCLAIMER

Any tax advice on this website was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed on any taxpayer.

Last updated January 27, 2011