p519--2022-00-00

Publication 519

Contents

U.S. Tax Guide
for Aliens

Introduction . . . . . . . . . . . . . . . . . . 1

Cat. No. 15023T
Department
of the
Treasury
Internal
Revenue
Service

For use in preparing

2022 Returns

What's New

.................. 2

Reminders . . . . . . . . . . . . . . . . . . . 3
Chapter 1. Nonresident Alien or
Resident Alien? . . . . . . . . . . . . . 3
Chapter 2. Source of Income . . . . . . 11
Chapter 3. Exclusions From
Gross Income . . . . . . . . . . . . . 15
Chapter 4. How Income of Aliens
Is Taxed . . . . . . . . . . . . . . . . 17
Chapter 5. Figuring Your Tax . . . . . . 24
Chapter 6. Dual-Status Tax Year . . . . 31
Chapter 7. Filing Information . . . . . . 34
Chapter 8. Paying Tax Through
Withholding or Estimated Tax . . . 37
Chapter 9. Tax Treaty Benefits . . . . . 45
Chapter 10. Employees of Foreign
Governments and International
Organizations . . . . . . . . . . . . . 47
Chapter 11. Departing Aliens and
the Sailing or Departure
Permit . . . . . . . . . . . . . . . . . . 49
Chapter 12. How To Get Tax Help . . . 51
Taxpayer Assistance Inside the
United States . . . . . . . . . . . . . 51
Appendix A—Tax Treaty Exemption
Procedure for Students . . . . . . . 56
Appendix B—Tax Treaty Exemption
Procedure for Teachers and
Researchers . . . . . . . . . . . . . . 60
Index

. . . . . . . . . . . . . . . . . . . . . 65

Future Developments
For the latest information about developments
related to Pub. 519, such as legislation enacted
after it was published, go to IRS.gov/Pub519.

Introduction

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Feb 8, 2023

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For tax purposes, an alien is an individual who
is not a U.S. citizen. Aliens are classified as
nonresident aliens and resident aliens. This
publication will help you determine your status
and give you information you will need to file
your U.S. tax return. Resident aliens are generally taxed on their worldwide income, the same
as U.S. citizens. Nonresident aliens are taxed
only on their income from sources within the
United States and on certain income connected

Table A. Where To Find What You Need To Know About U.S. Taxes
Commonly Asked Questions
Am I a nonresident alien or resident alien?

Where To Find the Answer
See chapter 1.

Can I be a nonresident alien and a resident alien in the same
year?

• See Dual-Status Aliens in chapter 1.
• See chapter 6.

I am a resident alien and my spouse is a nonresident alien. Are
there special rules for us?

• See Nonresident Spouse Treated as a Resident
in chapter 1.

• See Community Income in chapter 2.

Is all my income subject to U.S. tax?

• See chapter 2.
• See chapter 3.

Is my scholarship subject to U.S. tax?

• See Scholarships, Grants, Prizes, and Awards in chapter 2.
• See Scholarships and Fellowship Grants in chapter 3.
• See chapter 9.

Would any U.S. estate or gift taxes apply to me, my estate, or an See U.S. federal estate and gift tax in Reminders.
estate for which I am an executor, trustee, or representative?
What is the tax rate on my income subject to U.S. tax?

See chapter 4.

I moved to the United States this year. Can I deduct my moving
expenses on my U.S. return?

See Deductions in chapter 5.

Can I claim my spouse and/or children as dependents?

See Dependents in chapter 5.

I pay income taxes to my home country. Can I get credit for
these taxes on my U.S. tax return?

See Tax Credits and Payments in chapter 5.

What forms must I file and when and where do I file them?

See chapter 7.

How should I pay my U.S. income taxes?

See chapter 8.

Am I eligible for any benefits under a tax treaty?
Are employees of foreign governments and international
organizations exempt from U.S. tax?
Is there anything special I have to do before leaving the United
States?
with the conduct of a trade or business in the
United States.
The information in this publication is not as
comprehensive for resident aliens as it is for
nonresident aliens. Resident aliens are generally treated the same as U.S. citizens and can
find more information in other IRS publications
at IRS.gov/Forms.
Table A provides a list of questions and the
chapter or chapters in this publication where
you will find the related discussion.
Answers to frequently asked questions are
presented in the back of the publication.
Comments and suggestions. We welcome
your comments about this publication and suggestions for future editions.
You can send us comments through
IRS.gov/FormComments. Or, you can write to
the Internal Revenue Service, Tax Forms and
Publications, 1111 Constitution Ave. NW,
IR-6526, Washington, DC 20224.
Although we can’t respond individually to
each comment received, we do appreciate your
feedback and will consider your comments and
Page 2

• See Income Entitled to Tax Treaty Benefits in chapter 8.
• See chapter 9.
See chapter 10.

• See Expatriation Tax in chapter 4.
• See chapter 11.

suggestions as we revise our tax forms, instructions, and publications. Don’t send tax questions, tax returns, or payments to the above address.
Getting answers to your tax questions.
If you have a tax question not answered by this
publication or the How To Get Tax Help section
at the end of this publication, go to the IRS Interactive Tax Assistant page at IRS.gov/
Help/ITA where you can find topics by using the
search feature or viewing the categories listed.
Getting tax forms, instructions, and publications. Go to IRS.gov/Forms to download
current and prior-year forms, instructions, and
publications.
Ordering tax forms, instructions, and
publications. Go to IRS.gov/OrderForms to
order current forms, instructions, and publications; call 800-829-3676 to order prior-year
forms and instructions. The IRS will process
your order for forms and publications as soon

as possible. Don’t resubmit requests you’ve already sent us. You can get forms and publications faster online.

What's New
Filing status name changed to qualifying
surviving spouse. The filing status qualifying
widow(er) is now called qualifying surviving
spouse. The rules for the filing status have not
changed. The same rules that applied for qualifying widow(er) apply to qualifying surviving
spouse. See Qualifying surviving spouse in the
Instructions for Form 1040 for details on the
qualifying surviving spouse filing status.
New lines 1a through 1z on Form 1040-NR.
This year line 1 is expanded and there are new
lines 1a through 1z. Some amounts that in prior
years were reported on Form 1040-NR are now
reported on Schedule 1 (Form 1040).
• Scholarships and fellowship grants are
now reported on Schedule 1 (Form 1040),
line 8r.
Publication 519 (2022)

• Pension or annuity from a nonqualified deferred compensation plan or a nongovernmental section 457 plan are now reported
on Schedule 1 (Form 1040), line 8t.
• Wages earned while incarcerated are now
reported on Schedule 1 (Form 1040),
line 8u.

Nontaxable Medicaid waiver payments on
Schedule 1. For 2021, nontaxable amounts of
Medicaid waiver payments reported on Form
1040, line 1, were excluded from income on
Schedule 1, line 8z. For 2022, nontaxable
amounts will be excluded on Schedule 1,
line 8s.
Qualified disability trusts. The exemption
amount for a qualified disability is $4,400 for
2022.
Credit for child and dependent care expenses. The changes to the credit for child and dependent care expenses implemented by the
American Rescue Plan Act of 2021 (ARP) were
not extended. For 2022, the credit for the child
and dependent care expenses is nonrefundable. The dollar limit on qualifying expenses is
$3,000 for one qualifying person and $6,000 for
two or more qualifying persons. The maximum
credit amount allowed is 35% of your employment-related expenses. For more information,
see the Instructions for Form 2441 and Pub.
503.
Recovery rebate credit is not available. Aliens could claim the recovery rebate credit for
2020 and 2021 if they were a resident alien for
the entire year, were married and chose to file a
joint return with a U.S. citizen or resident
spouse, or were a dual-status alien and chose
to be treated as a U.S. resident for the entire
year. The credit is not available after 2021.
Credits for sick and family leave for certain
self-employed individuals are not available.
Self-employed individuals can no longer claim
these credits.
Health coverage tax credit is not available.
The health coverage tax credit was not extended. The credit is not available after 2021.

Reminders
Disaster tax relief. Disaster tax relief is available for those impacted by certain Presidentially
declared
disasters
(see
IRS.gov/
DisasterTaxRelief). Aliens who are required to
file a U.S. income tax return may be affected.
For more information, see the Instructions for
Form 1040, or the Instructions for Form
1040-NR.
Premium tax credit. You may be eligible to
claim the premium tax credit if you, your
spouse, or a dependent enrolled in health insurance through the Health Insurance Marketplace
(Marketplace). See Form 8962 and its instructions for more information.
Advance payments of the premium tax
credit. Advance payments of the premium tax
credit may have been made to the health insurer to help pay for the insurance coverage of
you, your spouse, or your dependent. If advance payments of the premium tax credit were
made, you must file a 2022 tax return and Form
8962. If you enrolled someone who is not

claimed as a dependent on your tax return or for
more information, see the Instructions for Form
8962.
Form 1095-A. If you, your spouse, or a dependent enrolled in health insurance through
the Marketplace, you should have received a
Form 1095-A. If you receive a Form 1095-A,
save it. It will help you figure your premium tax
credit. If you did not receive a Form 1095-A,
contact the Marketplace.
U.S. federal estate and gift tax. An individual (or deceased person) who is (or was) a nonresident noncitizen of the United States for estate and gift tax purposes may still have U.S.
estate and gift tax filing and payment obligations. The determination of whether an individual is a nonresident noncitizen for U.S. estate
and gift tax purposes is different than the determination of whether an individual is a nonresident alien for U.S. federal income tax purposes.
Estate and gift tax considerations are outside of
the scope of this publication, but information is
available on IRS.gov to determine whether any
U.S. estate or gift tax considerations may apply
to your situation. Further information on U.S.
federal estate tax considerations for nonresident noncitizens is available at Estate Tax for
Nonresidents not Citizens of the United States
and Frequently Asked Questions on Estate
Taxes for Nonresidents not Citizens of the
United States. Further information on U.S. federal gift tax considerations for nonresidents
noncitizens of the United States is available at
Gift Tax for Nonresidents not Citizens of the
United States and Frequently Asked Questions
on Gift Taxes for Nonresidents not Citizens of
the United States.
Refunds of certain withholding tax delayed.
Refund requests for tax withheld and reported
on Form 1042-S, Form 8288-A, or Form 8805
may require additional time for processing. Allow up to 6 months for these refunds to be issued.
Digital assets. If, in 2022, you engaged in a
transaction involving digital assets, you may
need to answer "Yes" to the question on page 1
of Form 1040-NR. See Digital Assets in the Instructions for Form 1040 for information on
transactions involving digital assets. Do not
leave this field blank. The question must be answered by all taxpayers, not just taxpayers who
engaged in a transaction involving digital assets.
Third-party designee. You can check the
“Yes” box in the “Third-Party Designee” area of
your return to authorize the IRS to discuss your
return with a friend, a family member, or any
other person you choose. This allows the IRS to
call the person you identified as your designee
to answer any questions that may arise during
the processing of your return. It also allows your
designee to perform certain actions such as
asking the IRS for copies of notices or transcripts related to your return. Also, the authorization can be revoked. See your income tax return instructions for details.
Change of address. If you change your mailing address, be sure to notify the IRS using
Form 8822.
Photographs of missing children. The IRS is
a proud partner with the National Center for
Missing & Exploited Children® (NCMEC).
Chapter 1

Photographs of missing children selected by
the Center may appear in this publication on pages that would otherwise be blank. You can
help bring these children home by looking at the
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

1.
Nonresident
Alien or
Resident Alien?
Introduction
You should first determine whether, for income
tax purposes, you are a nonresident alien or a
resident alien.
If you are both a nonresident and resident in
the same year, you have a dual status. See
Dual-Status Aliens, later. Also see Nonresident
Spouse Treated as a Resident and some other
special situations explained later in the chapter.

Topics

This chapter discusses:

• How to determine if you are a nonresident,
resident, or dual-status alien; and

• How to treat a nonresident spouse as a
resident alien.

Useful Items

You may want to see:
Form (and Instructions)
1040 U.S. Individual Income Tax Return
1040

1040-SR U.S. Tax Return for Seniors
1040-SR

1040-NR U.S. Nonresident Alien Income
Tax Return
1040-NR

8833 Treaty-Based Return Position
Disclosure Under Section 6114 or
7701(b)
8833

8840 Closer Connection Exception
Statement for Aliens
8840

8843 Statement for Exempt Individuals
and Individuals With a Medical
Condition
8843

See chapter 12 for information about getting
these forms.

Nonresident Aliens
If you are an alien (not a U.S. citizen), you are
considered a nonresident alien unless you meet
one of the two tests described under Resident
Aliens below.

Nonresident Alien or Resident Alien?

Page 3

Resident Aliens
You are a resident alien of the United States for
tax purposes if you meet either the green card
test or the substantial presence test for calendar year 2022 (January 1–December 31). Even
if you do not meet either of these tests, you may
be able to choose to be treated as a U.S. resident for part of the year. See First-Year Choice
under Dual-Status Aliens, later.

Green Card Test
You are a resident for tax purposes if you are a
lawful permanent resident of the United States
at any time during calendar year 2022. (However, see Dual-Status Aliens, later.) This is
known as the green card test. You are a lawful
permanent resident of the United States at any
time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant.
You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) (or
its predecessor organization) has issued you a
Form I-551, U.S. Permanent Resident Card,
also known as a green card. You continue to
have resident status under this test unless the
status is taken away from you or is administratively or judicially determined to have been
abandoned.
Resident status taken away. Resident status
is considered to have been taken away from
you if the U.S. Government issues you a final
administrative or judicial order of exclusion or
deportation. A final judicial order is an order that
you may no longer appeal to a higher court of
competent jurisdiction.
Resident status abandoned. An administrative or judicial determination of abandonment of
resident status may be initiated by you, the USCIS, or a U.S. consular officer.
If you initiate the determination, your resident status is considered to be abandoned
when you file either of the following documents
with your U.S. Permanent Resident Card (green
card or Form I-551) attached with the USCIS or
a U.S. consular officer.
• USCIS.gov/Form I-407 (Record of Abandonment of Lawful Permanent Resident
Status).
• A letter stating your intent to abandon your
resident status.
When filing by mail, you must send by certified mail, return receipt requested (or the foreign equivalent), and keep a copy and proof
that it was mailed and received.
Until you have proof your letter was received, you remain a resident alien for
CAUTION tax purposes even if the USCIS would
not recognize the validity of your green card because it is more than 10 years old or because
you have been absent from the United States
for a period of time.

!

If the USCIS or U.S. consular officer initiates
this determination, your resident status will be
considered to be abandoned when the final administrative order of abandonment is issued. If
Page 4

Chapter 1

you are granted an appeal to a federal court of
competent jurisdiction, a final judicial order is
required.
Under U.S. immigration law, a lawful permanent resident who is required to file a tax return
as a resident and fails to do so may be regarded as having abandoned status and may lose
permanent resident status.
A long-term resident (LTR) who ceases
to be a lawful permanent resident may
CAUTION be subject to special reporting requirements and tax provisions. See Expatriation Tax
in chapter 4.

!

Termination of residency after June 3,
2004, and before June 17, 2008. If you terminated your residency after June 3, 2004, and
before June 17, 2008, you will still be considered a U.S. resident for tax purposes until you
notify the Secretary of Homeland Security and
file Form 8854, Initial and Annual Expatriation
Statement.
Note. Requirements for taxpayers who expatriated before June 17, 2008, are no longer
discussed in the Instructions for Form 8854 or
Pub. 519. For information on expatriation before
June 17, 2008, see the 2018 Instructions for
Form 8854, and chapter 4 of the 2018 Pub.
519.
Termination of residency after June 16,
2008. For information on your residency termination date, see Former LTR under Expatriation
After June 16, 2008 in chapter 4.

Substantial Presence Test
You are a resident for tax purposes if you meet
the substantial presence test for calendar year
2022. To meet this test, you must be physically
present in the United States on at least:
1. 31 days during 2022; and
2. 183 days during the 3-year period that includes 2022, 2021, and 2020, counting:
a. All the days you were present in 2022,
b.

1/3 of the days you were present in
2021, and

c.

1/6

of the days you were present in
2020.

Example. You were physically present in
the United States on 120 days in each of the
years 2022, 2021, and 2020. To determine if
you meet the substantial presence test for
2022, count the full 120 days of presence in
2022, 40 days in 2021 (1/3 of 120), and 20 days
in 2020 (1/6 of 120). Because the total for the
3-year period is 180 days, you are not considered a resident under the substantial presence
test for 2022.
The term “United States” includes the following areas.
• All 50 states and the District of Columbia.
• The territorial waters of the United States.
• The seabed and subsoil of those submarine areas that are adjacent to U.S. territorial waters and over which the United
States has exclusive rights under international law to explore and exploit natural
resources.

Nonresident Alien or Resident Alien?

The term does not include U.S. possessions
and territories or U.S. airspace.

Days of Presence in the United
States
You are treated as present in the United States
on any day you are physically present in the
country at any time during the day. However,
there are exceptions to this rule. Do not count
the following as days of presence in the United
States for the substantial presence test.
• Days you commute to work in the United
States from a residence in Canada or Mexico if you regularly commute from Canada
or Mexico.
• Days you are in the United States for less
than 24 hours when you are in transit between two places outside the United
States.
• Days you are in the United States as a
crew member of a foreign vessel.
• Days you are unable to leave the United
States because of a medical condition that
arose while you are in the United States. If
you were unable to leave the United States
due to COVID-19 travel disruptions, you
may be eligible to exclude up to 60 consecutive days in the United States during a
certain period.
• Days you are in the United States under a
NATO visa as a member of a force or civilian component to NATO. However, this exception does not apply to an immediate
family member who is present in the United States under a NATO visa. A dependent family member must count every day of
presence for purposes of the substantial
presence test.
• Days you are an exempt individual.
The specific rules that apply to each of these
categories are discussed next.
Regular commuters from Canada or Mexico. Do not count the days on which you commute to work in the United States from your residence in Canada or Mexico if you regularly
commute from Canada or Mexico. You are considered to commute regularly if you commute to
work in the United States on more than 75%
(0.75) of the workdays during your working period.
For this purpose, “commute” means to travel
to work and return to your residence within a
24-hour period. “Workdays” are the days on
which you work in the United States or Canada
or Mexico. “Working period” means the period
beginning with the first day in the current year
on which you are physically present in the United States to work and ending on the last day in
the current year on which you are physically
present in the United States to work. If your
work requires you to be present in the United
States only on a seasonal or cyclical basis, your
working period begins on the first day of the
season or cycle on which you are present in the
United States to work and ends on the last day
of the season or cycle on which you are present
in the United States to work. You can have
more than one working period in a calendar
year, and your working period can begin in one
calendar year and end in the following calendar
year.

Example. Maria Perez lives in Mexico and
works for Compañía ABC in its office in Mexico
but was temporarily assigned to the firm's office
in the United States from February 1 through
June 1. On June 2, Maria resumed employment
in Mexico. For 69 workdays, Maria commuted
each morning from home in Mexico to work in
Compañía ABC's U.S. office and returned home
in Mexico on each of those evenings. For 7
workdays, Maria worked in Maria’s firm's Mexico office. For purposes of the substantial presence test, Maria does not count the days commuting to work in the United States because
those days equal more than 75% (0.75) of the
workdays during the working period (69 workdays in the United States divided by 76 workdays in the working period equals 90.8%).
Days in transit. Do not count the days you
are in the United States for less than 24 hours
and you are in transit between two places outside the United States. You are considered to
be in transit if you engage in activities that are
substantially related to completing travel to your
foreign destination. For example, if you travel
between airports in the United States to change
planes en route to your foreign destination, you
are considered to be in transit. However, you
are not considered to be in transit if you attend
a business meeting while in the United States.
This is true even if the meeting is held at the airport.
Crew members. Do not count the days you
are temporarily present in the United States as
a regular crew member of a foreign vessel (boat
or ship) engaged in transportation between the
United States and a foreign country or a U.S.
possession. However, this exception does not
apply if you otherwise engage in any trade or
business in the United States on those days.
Medical condition. Do not count the days you
intended to leave, but could not leave, the United States because of a medical condition or
problem that arose while you were in the United
States. Whether you intended to leave the United States on a particular day is determined
based on all the facts and circumstances. For
example, you may be able to establish that you
intended to leave if your purpose for visiting the
United States could be accomplished during a
period that is not long enough to qualify you for
the substantial presence test. However, if you
need an extended period of time to accomplish
the purpose of your visit and that period would
qualify you for the substantial presence test,
you would not be able to establish an intent to
leave the United States before the end of that
extended period.
In the case of an individual who is judged
mentally incompetent, proof of intent to leave
the United States can be determined by analyzing the individual's pattern of behavior before
they were judged mentally incompetent.
If you qualify to exclude days of presence
because of a medical condition, you must file a
fully completed Form 8843 with the IRS. See
Form 8843, later.
You cannot exclude any days of presence in
the United States under the following circumstances.
• You were initially prevented from leaving,
were then able to leave, but remained in

the United States beyond a reasonable period for making arrangements to leave.
• You returned to the United States for treatment of a medical condition that arose during a prior stay.
• The condition existed before your arrival in
the United States and you were aware of
the condition. It does not matter whether
you needed treatment for the condition
when you entered the United States.
Note. For more information on determining
resident alien or nonresident alien status under
the substantial presence test as a result of having applied the COVID-19 Medical Condition
Travel Exception to exclude days of presence in
the United States in 2020, see Revenue Procedure 2020-20, 2020-20 I.R.B. 801, available at
IRS.gov/irb/2020-20_IRB#REVPROC-2020-20, and the instructions for Form
8843.
Exempt individual. Do not count days for
which you are an exempt individual. The term
“exempt individual” does not refer to someone
exempt from U.S. tax, but instead refers to anyone in the following categories.
• An individual temporarily present in the
United States as a foreign government-related individual under an “A” or “G” visa
other than individuals holding “A-3” or
“G-5” class visas.
• A teacher or trainee temporarily present in
the United States under a “J” or “Q” visa
who substantially complies with the requirements of the visa.
• A student temporarily present in the United
States under an “F,” “J,” “M,” or “Q” visa
who substantially complies with the requirements of the visa.
• A professional athlete temporarily present
in the United States to compete in a charitable sports event.
The specific rules for each of these four categories (including any rules on the length of
time you will be an exempt individual) are discussed next.
Foreign government-related individuals.
A foreign government-related individual is an individual (or a member of the individual's immediate family) who is temporarily present in the
United States:
• As a full-time employee of an international
organization,
• By reason of diplomatic status, or
• By reason of a visa (other than a visa that
grants lawful permanent residence) that
the Secretary of the Treasury determines
represents full-time diplomatic or consular
status.
Note. You are considered temporarily
present in the United States regardless of the
actual amount of time you are present in the
United States.
An international organization is any public
international organization that the President of
the United States has designated by Executive
Order as being entitled to the privileges, exemptions, and immunities provided for in the International Organizations Act. An individual is a
full-time employee if their work schedule meets

Chapter 1

the organization's standard full-time work
schedule.
An individual is considered to have full-time
diplomatic or consular status if they:
• Have been accredited by a foreign government that is recognized by the United
States;
• Intend to engage primarily in official activities for that foreign government while in the
United States; and
• Have been recognized by the President,
Secretary of State, or a consular officer as
being entitled to that status.
Members of the immediate family include
the individual's spouse and unmarried children
(whether by blood or adoption) but only if the
spouse's or unmarried children's visa statuses
are derived from, and dependent on, the exempt individual's visa classification. Unmarried
children are included only if they:
• Are under 21 years of age,
• Reside regularly in the exempt individual's
household, and
• Are not members of another household.
Note. Generally, if you are present in the
United States under an “A” or “G” class visa,
you are considered a foreign government-related individual (with full-time diplomatic or consular status). None of your days count for purposes of the substantial presence test.
Household staff exception. If you are
present in the United States under an “A-3” or
“G-5” class visa as a personal employee, attendant, or domestic worker for either a foreign
government or international organization official, you are not considered a foreign government-related individual and must count all your
days of presence in the United States for purposes of the substantial presence test.
Teachers and trainees. A teacher or
trainee is an individual, other than a student,
who is temporarily in the United States under a
“J” or “Q” visa and substantially complies with
the requirements of that visa. You are considered to have substantially complied with the
visa requirements if you have not engaged in
activities that are prohibited by U.S. immigration
laws and could result in the loss of your visa
status.
Also included are immediate family members of exempt teachers and trainees. See the
definition of “immediate family,” earlier, under
Foreign government-related individuals.
You will not be an exempt individual as a
teacher or trainee in 2022 if you were exempt
as a teacher, trainee, or student for any part of 2
of the 6 preceding calendar years. However,
you will be an exempt individual if all of the following conditions are met.
• You were exempt as a teacher, trainee, or
student for any part of 3 (or fewer) of the 6
preceding calendar years.
• A foreign employer paid all of your compensation during 2022.
• You were present in the United States as a
teacher or trainee in any of the 6 prior
years.
• A foreign employer paid all of your compensation during each of the preceding 6
years you were present in the United
States as a teacher or trainee.

Nonresident Alien or Resident Alien?

Page 5

A foreign employer includes an office or place
of business of an American entity in a foreign
country or a U.S. possession.
If you qualify to exclude days of presence as
a teacher or trainee, you must file a fully completed Form 8843 with the IRS. See Form 8843,
later.
Example. Carla was temporarily in the United States during the year as a teacher on a “J”
visa. Carla’s compensation for the year was
paid by a foreign employer. Carla was treated
as an exempt teacher for the previous 2 years,
but compensation was not paid by a foreign
employer. Carla will not be considered an exempt individual for the current year because of
being exempt as a teacher for at least 2 of the
past 6 years.
If Carla’s compensation for the past 2 years
had been paid by a foreign employer, Carla
would be an exempt individual for the current
year.
Students. A student is any individual who
is temporarily in the United States on an “F,” “J,”
“M,” or “Q” visa and who substantially complies
with the requirements of that visa. You are considered to have substantially complied with the
visa requirements if you have not engaged in
activities that are prohibited by U.S. immigration
laws and could result in the loss of your visa
status.
Also included are immediate family members of exempt students. See the definition of
“immediate family,” earlier, under Foreign government-related individuals.
You will not be an exempt individual as a
student in 2022 if you have been exempt as a
teacher, trainee, or student for any part of more
than 5 calendar years unless you meet both of
the following requirements.
• You establish that you do not intend to reside permanently in the United States.
• You have substantially complied with the
requirements of your visa.
The facts and circumstances to be considered in determining if you have demonstrated
an intent to reside permanently in the United
States include, but are not limited to, the following.
• Whether you have maintained a closer
connection to a foreign country (discussed
later).
• Whether you have taken affirmative steps
to change your status from nonimmigrant
to lawful permanent resident, as discussed
later under Closer Connection to a Foreign
Country.
If you qualify to exclude days of presence as
a student, you must file a fully completed Form
8843 with the IRS. See Form 8843, later.
Professional athletes. A professional athlete who is temporarily in the United States to
compete in a charitable sports event is an exempt individual. A charitable sports event is one
that meets the following conditions.
• The main purpose is to benefit a qualified
charitable organization.
• The entire net proceeds go to charity.
• Volunteers perform substantially all the
work.

Page 6

Chapter 1

In figuring the days of presence in the United States, you can exclude only the days on
which you actually competed in a sports event.
You cannot exclude the days on which you
were in the United States to practice for the
event, to perform promotional or other activities
related to the event, or to travel between
events.
If you qualify to exclude days of presence as
a professional athlete, you must file a fully completed Form 8843 with the IRS. See Form 8843
next.
Form 8843. If you exclude days of presence in
the United States because you fall into any of
the following categories, you must file a fully
completed Form 8843.
• You were unable to leave the United
States as planned because of a medical
condition or problem.
• You were temporarily in the United States
as a teacher or trainee on a “J” or “Q” visa.
• You were temporarily in the United States
as a student on an “F,” “J,” “M,” or “Q” visa.
• You were a professional athlete competing
in a charitable sports event.
Attach Form 8843 to your 2022 income tax
return. If you do not have to file a return, send
Form 8843 to the following address.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You must file Form 8843 by the due date for
filing Form 1040-NR. The due date for filing is
discussed in chapter 7. If you are required to file
Form 8843 and you do not timely file Form
8843, you cannot exclude the days you were
present in the United States as a professional
athlete or because of a medical condition that
arose while you were in the United States. This
does not apply if you can show by clear and
convincing evidence that you took reasonable
actions to become aware of the filing requirements and significant steps to comply with
those requirements.

Closer Connection to a Foreign
Country
Even if you meet the substantial presence test,
you can be treated as a nonresident alien if you:
• Are present in the United States for less
than 183 days during the year,
• Maintain a tax home in a foreign country
during the year, and
• Have a closer connection during the year
to one foreign country in which you have a
tax home than to the United States (unless
you have a closer connection to two foreign countries, discussed next).
Closer connection to two foreign countries.
You can demonstrate that you have a closer
connection to two foreign countries (but not
more than two) if you meet all of the following
conditions.
• You maintained a tax home beginning on
the first day of the year in one foreign
country.
• You changed your tax home during the
year to a second foreign country.

Nonresident Alien or Resident Alien?

• You continued to maintain your tax home

in the second foreign country for the rest of
the year.
• You had a closer connection to each foreign country than to the United States for
the period during which you maintained a
tax home in that foreign country.
• You are subject to tax as a resident under
the tax laws of either foreign country for the
entire year or subject to tax as a resident in
both foreign countries for the period during
which you maintained a tax home in each
foreign country.
Tax home. Your tax home is the general area
of your main place of business, employment, or
post of duty, regardless of where you maintain
your family home. Your tax home is the place
where you permanently or indefinitely work as
an employee or a self-employed individual. If
you do not have a regular or main place of business because of the nature of your work, then
your tax home is the place where you regularly
live. If you do not fit either of these categories,
you are considered an itinerant and your tax
home is wherever you work.
For determining whether you have a closer
connection to a foreign country, your tax home
must also be in existence for the entire current
year and must be located in the same foreign
country to which you are claiming to have a
closer connection.
Foreign country. In determining whether you
have a closer connection to a foreign country,
the term “foreign country” means:
• Any territory under the sovereignty of the
United Nations or a government other than
that of the United States,
• The territorial waters of the foreign country
(determined under U.S. law),
• The seabed and subsoil of those submarine areas that are adjacent to the territorial
waters of the foreign country and over
which the foreign country has exclusive
rights under international law to explore
and exploit natural resources, and
• Possessions and territories of the United
States.
Establishing a closer connection. You will
be considered to have a closer connection to a
foreign country than the United States if you or
the IRS establishes that you have maintained
more significant contacts with the foreign country than with the United States. In determining
whether you have maintained more significant
contacts with the foreign country than with the
United States, the facts and circumstances to
be considered include, but are not limited to,
the following.
1. The country of residence you designate on
forms and documents.
2. The types of official forms and documents
you file, such as Form W-9, Form
W-8BEN, or Form W-8ECI.
3. The location of:
• Your permanent home;
• Your family;
• Your personal belongings, such as
cars, furniture, clothing, and jewelry;
• Your current social, political, cultural,
professional, or religious affiliations;

• Your business activities (other than

those that constitute your tax home);
• The jurisdiction in which you hold a
driver's license;
• The jurisdiction in which you vote;
and
• Charitable organizations to which you
contribute.
It does not matter whether your permanent
home is a house, an apartment, or a furnished
room. It also does not matter whether you rent
or own it. It is important, however, that your
home be available at all times, continuously,
and not solely for short stays.
When you cannot have a closer connection.
You cannot claim you have a closer connection
to a foreign country if either of the following applies.
• You personally applied, or took other steps
during the year, to change your status to
that of a permanent resident.
• You had an application pending for adjustment of status during the current year.
Steps to change your status to that of a permanent resident include, but are not limited to, the
filing of the following forms.
• Form I-508, Request for Waiver of Certain
Rights, Privileges, Exemptions, and Immunities.
• Form I-485, Application to Register Permanent Residence or Adjust Status.
• Form I-130, Petition for Alien Relative.
• Form I-140, Immigrant Petition for Alien
Workers.
• Form ETA-750, Application for Alien Employment Certification.
• Form OF-230, Application for Immigrant
Visa and Alien Registration.
Form 8840. You must attach a fully completed
Form 8840 to your income tax return to claim
you have a closer connection to a foreign country or countries.
If you do not have to file a return, send the
form to:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You must file Form 8840 by the due date for
filing Form 1040-NR. The due date for filing is
discussed later in chapter 7.
If you do not timely file Form 8840, you cannot claim a closer connection to a foreign country or countries. This does not apply if you can
show by clear and convincing evidence that you
took reasonable actions to become aware of
the filing requirements and significant steps to
comply with those requirements.

Effect of Tax Treaties
Dual residents. The rules given here to determine if you are a U.S. resident do not override
tax treaty definitions of residency. If you are a
dual-resident taxpayer, you can still claim the
benefits under an income tax treaty. A dual-resident taxpayer is one who is a resident of both
the United States and another country under
each country's tax laws. The income tax treaty

between the two countries must contain a provision that provides for resolution of conflicting
claims of residence (tiebreaker rule). If you are
treated as a resident of a foreign country under
a tax treaty, you are treated as a nonresident
alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be
treated as a U.S. resident. For example, the
rules discussed here do not affect your residency time periods, as discussed under
Dual-Status Aliens, later.
Information to be reported. If you are a
dual-resident taxpayer and you claim treaty
benefits, you must file a return using Form
1040-NR with Form 8833 attached, and compute your tax as a nonresident alien. A dual-resident taxpayer may also be eligible for U.S.
competent authority assistance. See Revenue
Procedure 2015-40, 2015-35 I.R.B. 236, available at IRS.gov/irb/2015-35_IRB#RP-2015-40,
or its successor.
See Reporting Treaty Benefits Claimed in
chapter 9 for more information on reporting
treaty benefits.
Certain students and trainees from Barbados, Hungary, and Jamaica. Nonresident
alien students from Barbados, Hungary, and Jamaica, as well as trainees from Jamaica, may
qualify for an election to be treated as a resident
alien for U.S. tax purposes under the U.S. income tax treaties with those countries. See
Pub. 901 for additional information. If you qualify for this election, you can make it by filing a
Form 1040 and attaching a signed election
statement to your return. The rules about resident aliens described in this publication apply to
you. Once made, the election applies as long
as you remain eligible, and you must obtain permission from the U.S. competent authority in order to terminate the election.

Dual-Status Aliens
You can be both a nonresident alien and a resident alien during the same tax year. This usually occurs in the year you arrive in, or depart
from, the United States. Aliens who have dual
status should see chapter 6 for information on
filing a return for a dual-status tax year.

First Year of Residency
If you are a U.S. resident for the calendar year,
but you were not a U.S. resident at any time
during the preceding calendar year, you are a
U.S. resident only for the part of the calendar
year that begins on the residency starting date.
You are a nonresident alien for the part of the
year before that date.
Residency starting date under substantial
presence test. If you meet the substantial
presence test for a calendar year, your residency starting date is generally the first day you
are present in the United States during that calendar year. However, you do not have to count
up to 10 days of actual presence in the United
States if on those days you establish that:
• You had a closer connection to a foreign
country than to the United States, and
Chapter 1

• Your tax home was in that foreign country.
See Closer Connection to a Foreign Country,
earlier.
In determining whether you can exclude up
to 10 days, the following rules apply.
• You can exclude days from more than one
period of presence as long as the total
days in all periods are not more than 10.
• You cannot exclude any days in a period of
consecutive days of presence if all the
days in that period cannot be excluded.
• Although you can exclude up to 10 days of
presence in determining your residency
starting date, you must include those days
when determining whether you meet the
substantial presence test.
Example. Ivan Ivanovich is a citizen of Russia. Ivan came to the United States for the first
time on January 6, 2022, to attend a business
meeting and returned to Russia on January 10,
2022. Ivan’s tax home remained in Russia. On
March 1, 2022, Ivan moved to the United States
and resided here for the rest of the year. Ivan is
able to establish a closer connection to Russia
for the period January 6–10, 2022. Thus, Ivan’s
residency starting date is March 1, 2022.
Statement required to exclude up to 10
days of presence. You must file a statement
with the IRS if you are excluding up to 10 days
of presence in the United States for purposes of
your residency starting date. You must sign and
date this statement and include a declaration
that it is made under penalties of perjury. The
statement must contain the following information (as applicable).
• Your name, address, U.S. taxpayer identification number (TIN) (if any), and U.S.
visa number (if any).
• Your passport number and the name of the
country that issued your passport.
• The tax year for which the statement applies.
• The first day that you were present in the
United States during the year.
• The dates of the days you are excluding in
figuring your first day of residency.
• Sufficient facts to establish that you have
maintained your tax home in, and a closer
connection to, a foreign country during the
period you are excluding.
Attach the required statement to your income tax return. If you are not required to file a
return, send the statement to the following address.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You must submit the statement on or before
the due date for filing Form 1040-NR. The due
date for filing is discussed in chapter 7.
If you do not file the required statement as
explained above, you cannot claim that you
have a closer connection to a foreign country or
countries. Therefore, your first day of residency
will be the first day you are present in the United
States. This does not apply if you can show by
clear and convincing evidence that you took
reasonable actions to become aware of the requirements for filing the statement and

Nonresident Alien or Resident Alien?

Page 7

significant steps to comply with those requirements.
Residency starting date under green card
test. If you meet the green card test at any time
during a calendar year, but do not meet the
substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United
States as a lawful permanent resident.
If you meet both the substantial presence
test and the green card test, your residency
starting date is the earlier of the first day during
the year you are present in the United States
under the substantial presence test or as a lawful permanent resident.
Residency during the preceding year. If you
were a U.S. resident during any part of the preceding calendar year and you are a U.S. resident for any part of the current year, you will be
considered a U.S. resident at the beginning of
the current year. This applies whether you are a
resident under the substantial presence test or
green card test.
Example. Robert Bach is a citizen of Switzerland. Robert came to the United States as a
U.S. resident for the first time on May 1, 2021,
and remained until November 5, 2021, when
Robert returned to Switzerland. Robert came
back to the United States on March 5, 2022, as
a lawful permanent resident and still resides
here. In calendar year 2022, Robert's U.S. residency is deemed to begin on January 1, 2022,
because Robert qualified as a resident in calendar year 2021.

First-Year Choice
If you do not meet either the green card test or
the substantial presence test for 2021 or 2022
and you did not choose to be treated as a resident for part of 2021, but you meet the substantial presence test for 2023, you can choose to
be treated as a U.S. resident for part of 2022.
To make this choice, you must:
1. Be present in the United States for at least
31 days in a row in 2022, and
2. Be present in the United States for at least
75% of the number of days beginning with
the first day of the 31-day period and ending with the last day of 2022. For purposes
of this 75% requirement, you can treat up
to 5 days of absence from the United
States as days of presence in the United
States.
When counting the days of presence in (1)
and (2) above, do not count the days you were
in the United States under any of the exceptions
discussed earlier under Days of Presence in the
United States.
If you make the first-year choice, your residency starting date for 2022 is the first day of
the earliest 31-day period (described in (1)
above) that you use to qualify for the choice.
You are treated as a U.S. resident for the rest of
the year. If you are present for more than one
31-day period and you satisfy condition (2)
above for each of those periods, your residency
starting date is the first day of the first 31-day
Page 8

Chapter 1

period. If you are present for more than one
31-day period but you satisfy condition (2)
above only for a later 31-day period, your residency starting date is the first day of the later
31-day period.
Note. You do not have to be married to
make this choice.
Example 1. Juan DaSilva is a citizen of the
Philippines. Juan came to the United States for
the first time on November 1, 2022, and was
here on 31 consecutive days (from November 1
through December 1, 2022). Juan returned to
the Philippines on December 1 and came back
to the United States on December 17, 2022.
Juan stayed in the United States for the rest of
the year. During 2023, Juan is a resident of the
United States under the substantial presence
test. Juan can make the first-year choice for
2022 because Juan was in the United States in
2022 for a period of 31 days in a row (November 1 through December 1) and for at least 75%
(0.75) of the days following (and including) the
first day of Juan’s 31-day period (46 total days
of presence in the United States divided by 61
days in the period from November 1 through
December 31 equals 75.4% (0.754)). If Juan
makes the first-year choice, Juan’s residency
starting date will be November 1, 2022.
Example 2. The facts are the same as in
Example 1, except that Juan was also absent
from the United States on December 24, 25, 29,
30, and 31. Juan can make the first-year choice
for 2022 because up to 5 days of absence are
considered days of presence for purposes of
the 75% (0.75) requirement.
Statement required to make the
first-year choice for 2022. You must attach a
statement to Form 1040 or 1040-SR to make
the first-year choice for 2022. The statement
must contain your name and address and specify the following.
• That you are making the first-year choice
for 2022.
• That you were not a resident in 2021.
• That you are a resident under the substantial presence test in 2023.
• The number of days of presence in the
United States during 2023.
• The date or dates of your 31-day period of
presence and the period of continuous
presence in the United States during 2022.
• The date or dates of absence from the United States during 2022 that you are treating as days of presence.
You cannot file Form 1040 or 1040-SR or the
statement until you meet the substantial presence test for 2023. If you have not met the test
for 2023 as of April 18, 2023, you can request
an extension of time for filing your 2022 Form
1040 or 1040-SR until a reasonable period after
you have met that test. To request an extension
to file until October 15, 2023, use Form 4868.
You can file the paper form or use one of the
electronic filing options explained in the Form
4868 instructions. You should pay with this extension the amount of tax you expect to owe for
2022 figured as if you were a nonresident alien
the entire year. You can use Form 1040-NR to
figure the tax. Enter the tax on Form 4868. If
you do not pay the tax due, you will be charged

Nonresident Alien or Resident Alien?

interest on any tax not paid by the regular due
date of your return, and you may be charged a
penalty on the late payment.
Once you make the first-year choice, you
may not revoke it without the approval of the
IRS.
If you do not follow the procedures discussed here for making the first-year choice,
you will be treated as a nonresident alien for all
of 2022. However, this does not apply if you can
show by clear and convincing evidence that you
took reasonable actions to become aware of
the filing procedures and significant steps to
comply with the procedures.

Choosing Resident Alien
Status
If you are a dual-status alien, you can choose to
be treated as a U.S. resident for the entire year
if all of the following apply.
• You were a nonresident alien at the beginning of the year.
• You are a resident alien or U.S. citizen at
the end of the year.
• You are married to a U.S. citizen or resident alien at the end of the year.
• Your spouse joins you in making the
choice.
This includes situations in which both you and
your spouse were nonresident aliens at the beginning of the tax year and both of you are resident aliens at the end of the tax year.
Note. If you are single at the end of the
year, you cannot make this choice.
If you make this choice, the following rules
apply.
• You and your spouse are treated as U.S.
residents for the entire year for income tax
purposes.
• You and your spouse are taxed on worldwide income.
• You and your spouse must file a joint return for the year of the choice.
• Neither you nor your spouse can make this
choice for any later tax year, even if you
are separated, divorced, or remarried.
• The special instructions and restrictions for
dual-status taxpayers in chapter 6 do not
apply to you.
Note. A similar choice is available if, at the
end of the tax year, one spouse is a nonresident
alien and the other spouse is a U.S. citizen or
resident. See Nonresident Spouse Treated as a
Resident, later. If you previously made that
choice and it is still in effect, you do not need to
make the choice explained here.
Making the choice. You should attach a statement signed by both spouses to your joint return for the year of the choice. The statement
must contain the following information.
• A declaration that you both qualify to make
the choice and that you choose to be treated as U.S. residents for the entire tax
year.
• The name, address, and TIN (social security number (SSN) or individual taxpayer
identification number (ITIN)) of each
spouse. (If one spouse died, include the
name and address of the person who

makes the choice for the deceased
spouse.)
You generally make this choice when you
file your joint return. However, you can also
make the choice by filing Form 1040-X, Amended U.S. Individual Income Tax Return. Attach
Form 1040 or 1040-SR and enter “Amended”
across the top of the corrected return. If you
make the choice with an amended return, you
and your spouse must also amend any returns
that you may have filed after the year for which
you made the choice.
You must generally file the amended joint
return within 3 years from the date you filed
your original U.S. income tax return or 2 years
from the date you paid your income tax for that
year, whichever is later.

Last Year of Residency
If you were a U.S. resident in 2022 but are not a
U.S. resident during any part of 2023, you
cease to be a U.S. resident on your residency
termination date. Your residency termination
date is December 31, 2022, unless you qualify
for an earlier date as discussed later.
Earlier residency termination date. You may
qualify for a residency termination date that is
earlier than December 31. This date is:
1. The last day in 2022 that you are physically present in the United States, if you
met the substantial presence test;
2. The first day in 2022 that you are no longer a lawful permanent resident of the United States, if you met the green card test;
or
3. The later of (1) or (2), if you met both tests.
You can use this date only if, for the remainder
of 2022, your tax home was in a foreign country
and you had a closer connection to that foreign
country. See Closer Connection to a Foreign
Country, earlier.
An LTR who ceases to be a lawful permanent resident may be subject to
CAUTION special reporting requirements and tax
provisions. See Expatriation Tax in chapter 4.

!

Termination of residency. For information
on your residency termination date, see Former
LTR under Expatriation After June 16, 2008 in
chapter 4.
De minimis presence. If you are a U.S. resident because of the substantial presence test
and you qualify to use the earlier residency termination date, you can exclude up to 10 days of
actual presence in the United States in determining your residency termination date. In determining whether you can exclude up to 10
days, the following rules apply.
• You can exclude days from more than one
period of presence as long as the total
days in all periods are not more than 10.
• You cannot exclude any days in a period of
consecutive days of presence if all the
days in that period cannot be excluded.
• Although you can exclude up to 10 days of
presence in determining your residency
termination date, you must include those

days when determining whether you meet
the substantial presence test.
Example. Lola Bovary is a citizen of Malta.
Lola came to the United States for the first time
on March 1, 2022, and resided here until August 25, 2022. On December 12, 2022, Lola
came to the United States for vacation and returned to Malta on December 16, 2022. Lola is
able to establish a closer connection to Malta
for the period December 12–16. Lola is not a
U.S. resident for tax purposes during 2022 and
can establish a closer connection to Malta for
the rest of calendar year 2022. Lola is a U.S.
resident under the substantial presence test for
2022 because Lola was present in the United
States for 183 days (178 days for the period
March 1 to August 25 plus 5 days in December). Lola's residency termination date is August 25, 2022.
Residency during the next year. If you are a
U.S. resident during any part of 2023 and you
are a resident during any part of 2022, you will
be treated as a resident through the end of
2022. This applies whether you have a closer
connection to a foreign country than the United
States during 2022, and whether you are a resident under the substantial presence test or
green card test.
Statement required to establish your residency termination date. You must file a
statement with the IRS to establish your residency termination date. You must sign and date
this statement and include a declaration that it
is made under penalties of perjury. The statement must contain the following information (as
applicable).
• Your name, address, U.S. TIN (if any), and
U.S. visa number (if any).
• Your passport number and the name of the
country that issued your passport.
• The tax year for which the statement applies.
• The last day that you were present in the
United States during the year.
• Sufficient facts to establish that you have
maintained your tax home in, and that you
have a closer connection to, a foreign
country following your last day of presence
in the United States during the year or following the abandonment or rescission of
your status as a lawful permanent resident
during the year.
• The date that your status as a lawful permanent resident was abandoned or rescinded.
• Sufficient facts (including copies of relevant documents) to establish that your status as a lawful permanent resident has
been abandoned or rescinded.
• If you can exclude days, as discussed earlier under De minimis presence, include
the dates of the days you are excluding
and sufficient facts to establish that you
have maintained your tax home in, and that
you have a closer connection to, a foreign
country during the period you are excluding.
Attach the required statement to your income tax return. If you are not required to file a
return, send the statement to the following address.
Chapter 1

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You must submit the statement on or before
the due date for filing Form 1040-NR. The due
date for filing is discussed in chapter 7.
If you do not file the required statement as
explained above, you cannot claim that you
have a closer connection to a foreign country or
countries. This does not apply if you can show
by clear and convincing evidence that you took
reasonable actions to become aware of the requirements for filing the statement and significant steps to comply with those requirements.

Nonresident Spouse
Treated as a Resident
If, at the end of your tax year, you are married
and one spouse is a U.S. citizen or a resident
alien and the other spouse is a nonresident
alien, you can choose to treat the nonresident
spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien
at the beginning of the tax year, but a resident
alien at the end of the year, and the other
spouse is a nonresident alien at the end of the
year.
If you make this choice, you and your
spouse are treated for income tax purposes as
residents for your entire tax year. Neither you
nor your spouse can claim under any tax treaty
not to be a U.S. resident. You are both taxed on
worldwide income. You must file a joint income
tax return for the year you make the choice, but
you and your spouse can file joint or separate
returns in later years.
If you file a joint return under this provision, the special instructions and reCAUTION strictions for dual-status taxpayers in
chapter 6 do not apply to you.

!

Example. Bob and Sharon Williams are
married and both are nonresident aliens at the
beginning of the year. In June, Bob became a
resident alien and remained a resident for the
rest of the year. Bob and Sharon both choose to
be treated as resident aliens by attaching a
statement to their joint return. Bob and Sharon
must file a joint return for the year they make the
choice, but they can file either joint or separate
returns for later years.

How To Make the Choice
Attach a statement, signed by both spouses, to
your joint return for the first tax year for which
the choice applies. It should contain the following information.
• A declaration that one spouse was a nonresident alien and the other spouse a U.S.
citizen or resident alien on the last day of
your tax year, and that you choose to be
treated as U.S. residents for the entire tax
year.
• The name, address, and identification
number of each spouse. (If one spouse
died, include the name and address of the

Nonresident Alien or Resident Alien?

Page 9

person making the choice for the deceased spouse.)
Amended return. You generally make this
choice when you file your joint return. However,
you can also make the choice by filing a joint
amended return on Form 1040-X. Attach Form
1040 or 1040-SR and enter “Amended” across
the top of the corrected return. If you make the
choice with an amended return, you and your
spouse must also amend any returns that you
may have filed after the year for which you
made the choice.
You must generally file the amended joint
return within 3 years from the date you filed
your original U.S. income tax return or 2 years
from the date you paid your income tax for that
year, whichever is later.

Suspending the Choice
The choice to be treated as a resident alien is
suspended for any tax year (after the tax year
you made the choice) if neither spouse is a U.S.
citizen or resident alien at any time during the
tax year. This means each spouse must file a
separate return as a nonresident alien for that
year if either meets the filing requirements for
nonresident aliens discussed in chapter 7.
Example. Dick Brown was a resident alien
on December 31, 2019, and married to Judy, a
nonresident alien. They chose to treat Judy as a
resident alien and filed joint 2019 and 2020

income tax returns. On January 10, 2021, Dick
became a nonresident alien. Judy had remained a nonresident alien throughout the period. Dick and Judy could have filed joint or separate returns for 2021 because Dick was a
resident alien for part of that year. However, because neither Dick nor Judy is a resident alien
at any time during 2022, their choice is suspended for that year. If either meets the filing requirements for nonresident aliens discussed in
chapter 7, they must file separate returns as
nonresident aliens for 2022. If Dick becomes a
resident alien again in 2023, their choice is no
longer suspended.

Ending the Choice
Once made, the choice to be treated as a resident applies to all later years unless suspended
(as explained earlier under Suspending the
Choice) or ended in one of the following ways.
If the choice is ended in one of the following
ways, neither spouse can make this choice in
any later tax year.
1. Revocation. Either spouse can revoke
the choice for any tax year, provided they
make the revocation by the due date for filing the tax return for that tax year. The
spouse who revokes the choice must attach a signed statement declaring that the
choice is being revoked. The statement
must include the name, address, and
identification number of each spouse. (If

Table 2-1. Summary of Source Rules for Income of Nonresident Aliens
Item of income

Factor determining source

Salaries, wages, other compensation

Where services performed

Business income:
Personal services
Sale of inventory—purchased
Sale of inventory—produced

Where services performed
Where sold
Where produced

Interest

Residence of payer

Dividends

Whether a U.S. or foreign corporation*

Rents

Location of property

Royalties:
Natural resources
Patents, copyrights, etc.

Location of property
Where property is used

Sale of real property

Location of property

Sale of personal property

Seller's tax home (but see Personal Property,
later, for exceptions)

Pension distributions attributable to
contributions

Where services were performed that earned
the pension

Investment earnings on pension
contributions

Location of pension trust

Sale of natural resources

Allocation based on fair market value of
product at export terminal. For more
information, see section 1.863-1(b) of the
regulations.

* Exceptions include: Part of a dividend paid by a foreign corporation is U.S. source if at least
25% of the corporation's gross income is effectively connected with a U.S. trade or business for
the 3 tax years before the year in which the dividends are declared. Special rules apply for
dividend equivalent payments.
Page 10

Chapter 1

Nonresident Alien or Resident Alien?

one spouse dies, include the name and
address of the person who is revoking the
choice for the deceased spouse.) The
statement must also include a list of any
states, foreign countries, and possessions
that have community property laws in
which either spouse is domiciled or where
real property is located from which either
spouse receives income. File the statement as follows.
a. If the spouse revoking the choice
must file a return, attach the statement to the return for the first year the
revocation applies.
b. If the spouse revoking the choice
does not have to file a return, but
does file a return (for example, to obtain a refund), attach the statement to
the return.
c. If the spouse revoking the choice
does not have to file a return and
does not file a claim for refund, send
the statement to the Internal Revenue
Service Center where you filed the
last joint return.
2. Death. The death of either spouse ends
the choice, beginning with the first tax year
following the year the spouse died. However, if the surviving spouse is a U.S. citizen or resident and is entitled to the joint
tax rates as a surviving spouse, the choice
will not end until the close of the last year
for which these joint rates may be used. If
both spouses die in the same tax year, the
choice ends on the first day after the close
of the tax year in which the spouses died.
3. Legal separation. A legal separation under a decree of divorce or separate maintenance ends the choice as of the beginning of the tax year in which the legal
separation occurs.
4. Inadequate records. The IRS can end
the choice for any tax year that either
spouse has failed to keep adequate
books, records, and other information necessary to determine the correct income tax
liability, or to provide adequate access to
those records.

Aliens From American
Samoa or Puerto Rico
If you are a nonresident alien in the United
States and a bona fide resident of American Samoa or Puerto Rico during the entire tax year,
you are taxed, with certain exceptions, according to the rules for resident aliens of the United
States. For more information, see Bona Fide
Residents of American Samoa or Puerto Rico in
chapter 5.
If you are a nonresident alien from American
Samoa or Puerto Rico who does not qualify as
a bona fide resident of American Samoa or Puerto Rico for the entire tax year, you are taxed
as a nonresident alien.
Resident aliens who formerly were bona fide
residents of American Samoa or Puerto Rico

are taxed according to the rules for resident aliens.

2.

nership or foreign corporation engaged in
a U.S. trade or business at any time during
the tax year.
• Original issue discount (OID).
• Interest from a state, the District of Columbia, or the U.S. Government.
The place or manner of payment is immaterial in determining the source of the income.

Source of
Income
Introduction
After you have determined your alien status,
you must determine the source of your income.
This chapter will help you determine the source
of different types of income you may receive
during the tax year.

Topics

This chapter discusses:

• Income source rules, and
• Community income.
This chapter also discusses special rules for
married individuals who are domiciled in a
country with community property laws.

Resident Aliens
A resident alien's income is generally subject to
tax in the same manner as a U.S. citizen. If you
are a resident alien, you must report all interest,
dividends, wages, or other compensation for
services, income from rental property or royalties, and other types of income on your U.S. tax
return. You must report these amounts from
sources within and outside the United States.

Nonresident Aliens
Nonresident aliens are taxed only on their income from sources within the United States and
on certain income connected with the conduct
of a trade or business in the United States (see
chapter 4).
The general rules for determining U.S.
source income that apply to most nonresident
aliens are shown in Table 2-1. The following
discussions cover the general rules as well as
the exceptions to these rules.

TIP

• Interest paid by a domestic or foreign part-

Not all items of U.S. source income are
taxable. See chapter 3.

Interest Income
Generally, U.S. source interest income includes
the following items.
• Interest on bonds, notes, or other interest-bearing obligations of U.S. residents or
domestic corporations.

A substitute interest payment made to the
transferor of a security in a securities lending
transaction or a sale-repurchase transaction is
sourced in the same manner as the interest on
the transferred security.
Exceptions. U.S. source interest income does
not include the following items.
1. Interest paid by a resident alien or a domestic corporation on obligations issued
before August 10, 2010, if for the 3-year
period ending with the close of the payer's
tax year preceding the interest payment,
at least 80% (0.80) of the payer's total
gross income:
a. Is from sources outside the United
States, and
b. Is attributable to the active conduct of
a trade or business by the individual
or corporation in a foreign country or a
U.S. possession.
However, the interest will be considered U.S. source interest income if either
of the following applies.
a. The recipient of the interest is related
to the resident alien or domestic corporation. See section 954(d)(3) for the
definition of “related person.”
b. The terms of the obligation are significantly modified after August 9, 2010.
Any extension of the term of the obligation is considered a significant
modification.
2. Interest paid by a foreign branch of a domestic corporation or a domestic partnership on deposits or withdrawable accounts
with mutual savings banks, cooperative
banks, credit unions, domestic building
and loan associations, and other savings
institutions chartered and supervised as
savings and loan or similar associations
under federal or state law if the interest
paid or credited can be deducted by the
association.
3. Interest on deposits with a foreign branch
of a domestic corporation or domestic
partnership, but only if the branch is in the
commercial banking business.

Dividends
In most cases, dividend income received from
domestic corporations is U.S. source income.
Dividend income from foreign corporations is
usually foreign source income. An exception to
the second rule is discussed later.
A substitute dividend payment made to the
transferor of a security in a securities lending
transaction or a sale-repurchase transaction is

sourced in the same manner as a distribution
on the transferred security.
Exception. Part of the dividends received
from a foreign corporation is U.S. source income if 25% or more of its total gross income
for the 3-year period ending with the close of its
tax year preceding the declaration of dividends
was effectively connected with a trade or business in the United States. If the corporation was
formed less than 3 years before the declaration,
use its total gross income from the time it was
formed. Determine the part that is U.S. source
income by multiplying the dividend by the following fraction.
Foreign corporation's gross income
connected with a U.S. trade or business
for the 3-year period
Foreign corporation's gross income from
all sources for that period

Dividend equivalent payments. U.S. source
dividends also include dividend equivalent payments. Dividend equivalent payments include:
• Substitute dividends paid pursuant to a securities lending transaction, sale-repurchase transaction, or substantially similar
transaction;
• A payment that references a U.S. source
dividend made pursuant to a specified notional principal contract (NPC); or
• A payment that references a U.S. source
dividend made pursuant to a specified
equity-linked instrument (ELI).
A payment of a dividend equivalent amount
includes any gross amount that references a
U.S. source dividend and that is used to compute any net amount transferred to or from the
taxpayer under a contract, if the taxpayer is the
long party under the contract. As a result, a taxpayer may be treated as having received a dividend equivalent payment even if the taxpayer
makes a net payment or no amount is paid because the net amount is zero.
In 2022, an NPC or ELI will generally be a
specified NPC or specified ELI, respectively, if
the contract is a delta one transaction. Generally, delta is the ratio of change in the fair market value of an NPC or ELI to a small change in
the fair market value of the number of shares of
the stock referenced by the contract. Generally,
the amount of a dividend equivalent for a specified NPC or specified ELI is the per share dividend amount multiplied by the number of
shares of stock referenced by the contract multiplied by the delta of the contract. Special rules
apply to complex contracts. See Regulations
section 1.871-15 and Notice 2020-03, for additional information.

Guarantee of Indebtedness
Amounts received directly or indirectly, for the
provision of a guarantee of indebtedness issued after September 27, 2010, are U.S.
source income if they are paid by:
1. A noncorporate resident or U.S. corporation, or
2. Any foreign person if the amounts are effectively connected with the conduct of a
U.S. trade or business.
Chapter 2

Source of Income

Page 11

For more information, see section 861(a)(9).

Personal Services
All wages and any other compensation for services performed in the United States are considered to be from sources in the United States.
The only exceptions to this rule are discussed in
Employees of foreign persons, organizations, or
offices, later, and in Crew members, earlier.
If you are an employee and receive compensation for labor or personal services performed both inside and outside the United
States, special rules apply in determining the
source of the compensation. Compensation
(other than certain fringe benefits) is sourced on
a time basis. Certain fringe benefits (such as
housing and education) are sourced on a geographical basis.
Or, you may be permitted to use an alternative basis to determine the source of compensation. See Alternative Basis, later.
Multilevel marketing. Certain companies sell
products through a multilevel marketing arrangement, such that an upper-tier distributor,
who has sponsored a lower-tier distributor, is
entitled to a payment from the company based
on certain activities of that lower-tier distributor.
Generally, depending on the facts, payments
from such multilevel marketing companies to independent (nonemployee) distributors (upper-tier distributors) that are based on the sales
or purchases of persons whom they have sponsored (lower-tier distributors) constitute income
for the performance of personal services in recruiting, training, and supporting the lower-tier
distributors. The source of such income is generally based on where the services of the upper-tier distributor are performed and may, depending on the facts, be considered multiyear
compensation, with the source of income determined over the period to which such compensation is attributable.
Self-employed
individuals. If you are
self-employed, you determine the source of
compensation for labor or personal services
from self-employment on the basis that most
correctly reflects the proper source of that income under the facts and circumstances of
your particular case. In many cases, the facts
and circumstances will call for an apportionment on a time basis as explained next.

Time Basis
Use a time basis to figure your U.S. source
compensation (other than the fringe benefits
discussed in Geographical Basis). Do this by
multiplying your total compensation (other than
the fringe benefits sourced on a geographical
basis) by the following fraction.
Number of days you performed services
in the United States during the year
Total number of days you performed
services during the year

You can use a unit of time less than a day in
the above fraction, if appropriate. The time
period for which the compensation is made
Page 12

Chapter 2

Source of Income

does not have to be a year. Instead, you can
use another distinct, separate, and continuous
time period if you can establish to the satisfaction of the IRS that this other period is more appropriate.
Example 1. Christina Brooks, a resident of
the Netherlands, worked 240 days for a U.S.
company during the tax year. Christina received
$80,000 in compensation. None of it was for
fringe benefits. Christina performed services in
the United States for 60 days and performed
services in the Netherlands for 180 days. Using
the time basis for determining the source of
compensation, $20,000 ($80,000 × 60/240) is
Christina’s U.S. source income.
Example 2. Rob Waters, a resident of
South Africa, is employed by a corporation.
Rob’s annual salary is $100,000. None of it is
for fringe benefits. During the first quarter of the
year, Rob worked entirely within the United
States. On April 1, Rob was transferred to Singapore for the remainder of the year. Rob is
able to establish that the first quarter of the year
and the last 3 quarters of the year are two separate, distinct, and continuous periods of time.
Accordingly, $25,000 of Rob's annual salary is
attributable to the first quarter of the year (0.25
× $100,000). All of it is U.S. source income because Rob worked entirely within the United
States during that quarter. The remaining
$75,000 is attributable to the last 3 quarters of
the year. During those quarters, Rob worked
150 days in Singapore and 30 days in the United States. Rob’s periodic performance of services in the United States did not result in distinct, separate, and continuous periods of time.
Of this $75,000, $12,500 ($75,000 × 30/180) is
U.S. source income.
Multiyear compensation. The source of multiyear compensation is generally determined on
a time basis over the period to which the compensation is attributable. Multiyear compensation is compensation that is included in your income in 1 tax year but that is attributable to a
period that includes 2 or more tax years.
You determine the period to which the compensation is attributable based on the facts and
circumstances of your case. For example, an
amount of compensation that specifically relates to a period of time that includes several
calendar years is attributable to the entire multiyear period.
The amount of compensation treated as
from U.S. sources is figured by multiplying the
total multiyear compensation by a fraction. The
numerator of the fraction is the number of days
(or unit of time less than a day, if appropriate)
that you performed labor or personal services in
the United States in connection with the project.
The denominator of the fraction is the total number of days (or unit of time less than a day, if appropriate) that you performed labor or personal
services in connection with the project.

Geographical Basis
Compensation you receive as an employee in
the form of the following fringe benefits is
sourced on a geographical basis.
• Housing.
• Education.

• Local transportation.
• Tax reimbursement.
• Hazardous or hardship duty pay as defined
in Regulations section 1.861-4(b)(2)(ii)(D)
(5).
• Moving expense reimbursement.

The amount of fringe benefits must be reasonable and you must substantiate them by adequate records or by sufficient evidence.
Principal place of work. The above fringe
benefits, except for tax reimbursement and hazardous or hardship duty pay, are sourced based
on your principal place of work. Your principal
place of work is usually the place where you
spend most of your working time. This could be
your office, plant, store, shop, or other location.
If there is no one place where you spend most
of your working time, your main job location is
the place where your work is centered, such as
where you report for work or are otherwise required to “base” your work.
If you have more than one job at any time,
your main job location depends on the facts in
each case. The more important factors to be
considered are:
• The total time you spend at each place,
• The amount of work you do at each place,
and
• How much money you earn at each place.
Housing. The source of a housing fringe benefit is determined based on the location of your
principal place of work. A housing fringe benefit
includes payments to you or on your behalf
(and your family's if your family resides with
you) only for the following.
• Rent.
• Utilities (except telephone charges).
• Real and personal property insurance.
• Occupancy taxes not deductible under
section 164 or 216(a).
• Nonrefundable fees for securing a leasehold.
• Rental of furniture and accessories.
• Household repairs.
• Residential parking.
• Fair rental value of housing provided in
kind by your employer.
A housing fringe benefit does not include:

• Deductible interest and taxes (including

•
•
•
•
•
•
•
•

deductible interest and taxes of a tenant-stockholder in a cooperative housing
corporation);
The cost of buying property, including principal payments on a mortgage;
The cost of domestic labor (maids, gardeners, etc.);
Pay television subscriptions;
Improvements and other expenses that increase the value or appreciably prolong
the life of property;
Purchased furniture or accessories;
Depreciation or amortization of property or
improvements;
The value of meals or lodging that you exclude from gross income; or
The value of meals or lodging that you deduct as moving expenses.

The deduction for moving expenses is available only if you are a member of the U.S. Armed
Forces on active duty and move due to a permanent change of duty station.

Education. The source of an education fringe
benefit for the education expenses of your dependents is determined based on the location
of your principal place of work. An education
fringe benefit includes payments only for the following expenses for education at an elementary
or secondary school.
• Tuition, fees, academic tutoring, special
needs services for a special needs student, books, supplies, and other equipment.
• Room and board and uniforms that are required or provided by the school in connection with enrollment or attendance.
Local transportation. The source of a local
transportation fringe benefit is determined
based on the location of your principal place of
work. Your local transportation fringe benefit is
the amount that you receive as compensation
for local transportation for you or your spouse or
dependents at the location of your principal
place of work. The amount treated as a local
transportation fringe benefit is limited to actual
expenses incurred for local transportation and
the fair rental value of any employer-provided
vehicle used predominantly by you, your
spouse, or your dependents for local transportation. Actual expenses do not include the cost
(including interest) of any vehicle purchased by
you or on your behalf.
Tax reimbursement. The source of a tax reimbursement fringe benefit is determined based
on the location of the jurisdiction that imposed
the tax for which you are reimbursed.
Moving
expense
reimbursement. The
source of a moving expense reimbursement is
generally based on the location of your new
principal place of work. However, the source is
determined based on the location of your former principal place of work if you provide sufficient evidence that such determination of
source is more appropriate under the facts and
circumstances of your case. Sufficient evidence
generally requires an agreement between you
and your employer, or a written statement of
company policy, which is reduced to writing before the move and which is entered into or established to induce you or other employees to
move to another country. The written statement
or agreement must state that your employer will
reimburse you for moving expenses that you incur to return to your former principal place of
work regardless of whether you continue to
work for your employer after returning to that location. It may contain certain conditions upon
which the right to reimbursement is determined
as long as those conditions set forth standards
that are definitely ascertainable and can only be
fulfilled prior to, or through completion of, your
return move to your former principal place of
work.

Alternative Basis
If you are an employee, you can determine the
source of your compensation under an alternative basis if you establish to the satisfaction of
the IRS that, under the facts and circumstances
of your case, the alternative basis more properly determines the source of your compensation than the time or geographical basis. If you

use an alternative basis, you must keep (and
have available for inspection) records to document why the alternative basis more properly
determines the source of your compensation.
Also, if your total compensation from all sources
is $250,000 or more, check “Yes” to both questions on line K of Schedule OI (Form 1040-NR),
and attach a written statement to your tax return
that sets forth all of the following.
1. Your name and SSN (entered across the
top of the statement).
2. The specific compensation income, or the
specific fringe benefit, for which you are
using the alternative basis.
3. For each item in (2), the alternative basis
of allocation of source used.
4. For each item in (2), a computation showing how the alternative allocation was
computed.
5. A comparison of the dollar amount of the
U.S. compensation and foreign compensation sourced under both the alternative
basis and the time or geographical basis
discussed earlier.

Transportation Income
Transportation income is income from the use
of a vessel or aircraft or for the performance of
services directly related to the use of any vessel
or aircraft. This is true whether the vessel or aircraft is owned, hired, or leased. The term “vessel or aircraft” includes any container used in
connection with a vessel or aircraft.
All income from transportation that begins
and ends in the United States is treated as derived from sources in the United States. If the
transportation begins or ends in the United
States, 50% of the transportation income is
treated as derived from sources in the United
States.
For transportation income from personal
services, 50% of the income is U.S. source income if the transportation is between the United
States and a U.S. possession. For nonresident
aliens, this only applies to income derived from,
or in connection with, an aircraft.
For information on how U.S. source transportation income is taxed, see chapter 4.

Scholarships, Grants, Prizes,
and Awards
Generally, the source of scholarships, fellowship grants, grants, prizes, and awards is the
residence of the payer regardless of who actually disburses the funds. However, see Activities to be performed outside the United States,
later.
For example, payments for research or
study in the United States made by the United
States, a noncorporate U.S. resident, or a domestic corporation are from U.S. sources. Similar payments from a foreign government or foreign corporation are foreign source payments
even though the funds may be disbursed
through a U.S. agent.

Payments made by an entity designated as
a public international organization under the International Organizations Immunities Act are
from foreign sources.
Activities to be performed outside the United States. Scholarships, fellowship grants,
targeted grants, and achievement awards received by nonresident aliens for activities performed, or to be performed, outside the United
States are not U.S. source income.
These rules do not apply to amounts
paid as salary or other compensation
CAUTION for services. See Personal Services,
earlier, for the source rules that apply.

!

Pensions and Annuities
If you receive a pension from a domestic trust
for services performed both in and outside the
United States, part of the pension payment is
from U.S. sources. That part is the amount attributable to earnings of the pension plan and
the employer contributions made for services
performed in the United States. This applies
whether the distribution is made under a qualified or nonqualified stock bonus, pension,
profit-sharing, or annuity plan (whether or not
funded).
If you performed services as an employee of
the United States, you may receive a distribution from the U.S. Government under a plan,
such as the Civil Service Retirement System,
that is treated as a qualified pension plan. Your
U.S. source income is the otherwise taxable
amount of the distribution that is attributable to
your total U.S. Government basic pay other
than tax-exempt pay for services performed
outside the United States.
Disaster tax relief. If you are required to
file a U.S. federal income tax return, you may
be entitled to some special disaster-related
rules regarding the use of retirement funds. For
more information, see Pub. 590-B. Also, go to
IRS.gov/DisasterTaxRelief.
Tax relief for qualified disaster distributions and repayments. Special rules provide
for tax-favored withdrawals and repayments to
certain retirement plans (including IRAs) for taxpayers who suffered economic losses because
of certain major disasters. For information about
reporting qualified disaster distributions and repayments, see Form 8915-F, Qualified Disaster
Retirement Plan Distributions and Repayments,
and its instructions.

Rents or Royalties
Your U.S. source income includes rent and royalty income received during the tax year from
property located in the United States or from
any interest in that property.
U.S. source income also includes rents or
royalties for the use of, or for the privilege of using, in the United States, intangible property
such as patents, copyrights, secret processes
and formulas, goodwill, trademarks, franchises,
and similar property.
Chapter 2

Source of Income

Page 13

Real Property
Real property is land and buildings and generally anything built on, growing on, or attached to
land.
Gross income from sources in the United
States includes gains, profits, and income from
the sale or other disposition of real property located in the United States.
Natural resources. The income from the sale
of products of any farm, mine, oil or gas well,
other natural deposit, or timber located in the
United States and sold in a foreign country, or
located in a foreign country and sold in the United States, is partly from sources in the United
States. For information on determining that part,
see Regulations section 1.863-1(b).

Personal Property
Personal property is property, such as machinery, equipment, or furniture, that is not real
property.
Gain or loss from the sale or exchange of
personal property generally has its source in the
United States if you have a tax home in the United States. If you do not have a tax home in the
United States, the gain or loss is generally considered to be from sources outside the United
States.
Tax home. Your tax home is the general area
of your main place of business, employment, or
post of duty, regardless of where you maintain
your family home. Your tax home is the place
where you permanently or indefinitely work as
an employee or a self-employed individual. If
you do not have a regular or main place of business because of the nature of your work, then
your tax home is the place where you regularly
live. If you do not fit either of these categories,
you are considered an itinerant and your tax
home is wherever you work.
Inventory property. Inventory property is personal property that is stock in trade or that is
held primarily for sale to customers in the ordinary course of your trade or business. Income
from the sale of inventory that you purchased is
sourced where the property is sold. Generally,
this is where title to the property passes to the
buyer. For example, income from the sale of inventory in the United States is U.S. source income, whether you purchased it in the United
States or in a foreign country.
Income from the sale of inventory property
that you produced in the United States and sold
outside the United States (or vice versa) is
sourced where the property is produced.
These rules apply even if your tax home is
not in the United States.
Depreciable property. To determine the
source of any gain from the sale of depreciable
personal property, you must first figure the part
of the gain that is not more than the total depreciation adjustments on the property. You allocate this part of the gain to sources in the United States based on the ratio of U.S.
depreciation adjustments to total depreciation
adjustments. The rest of this part of the gain is
Page 14

Chapter 2

Source of Income

considered to be from sources outside the United States.
For this purpose, “U.S. depreciation adjustments” are the depreciation adjustments to the
basis of the property that are allowable in figuring taxable income from U.S. sources. However, if the property is used predominantly in
the United States during a tax year, all depreciation deductions allowable for that year are
treated as U.S. depreciation adjustments. But
there are some exceptions for certain transportation, communications, and other property
used internationally.
Gain from the sale of depreciable property
that is more than the total depreciation adjustments on the property is sourced as if the property were inventory property, as discussed
above.
A loss is sourced in the same way as the depreciation deductions were sourced. However,
if the property was used predominantly in the
United States, the entire loss reduces U.S.
source income.
The basis of property usually means the
cost (money plus the fair market value of other
property or services) of property you acquire.
Depreciation is an amount deducted to recover
the cost or other basis of a trade or business
asset. The amount you can deduct depends on
the property's cost, when you began using the
property, how long it will take to recover your
cost, and which depreciation method you use.
A depreciation deduction is any deduction for
depreciation or amortization or any other allowable deduction that treats a capital expenditure
as a deductible expense.
Intangible property. Intangible property includes patents, copyrights, secret processes or
formulas, goodwill, trademarks, trade names, or
other like property. The gain from the sale of
amortizable or depreciable intangible property,
up to the previously allowable amortization or
depreciation deductions, is sourced in the same
way as the original deductions were sourced.
This is the same as the source rule for gain from
the sale of depreciable property. See Depreciable property, earlier, for details on how to apply
this rule.
Gain in excess of the amortization or depreciation deductions is sourced in the country
where the property is used if the income from
the sale is contingent on the productivity, use,
or disposition of that property. If the income is
not contingent on the productivity, use, or disposition of the property, the income is sourced
according to your tax home (discussed earlier).
If payments for goodwill do not depend on its
productivity, use, or disposition, their source is
the country in which the goodwill was generated.
Sales through offices or fixed places of
business. Despite any of the earlier rules, if
you do not have a tax home in the United
States, but you maintain an office or other fixed
place of business in the United States, treat the
income from any sale of personal property (including inventory property) that is attributable to
that office or place of business as U.S. source
income. However, this rule does not apply to
sales of inventory property for use, disposition,
or consumption outside the United States if
your office or other fixed place of business out-

side the United States materially participated in
the sale.
If you have a tax home in the United States
but maintain an office or other fixed place of
business outside the United States, income
from sales of personal property, other than inventory, depreciable property, or intangibles,
that is attributable to that foreign office or place
of business may be treated as U.S. source income. The income is treated as U.S. source income if an income tax of less than 10% of the
income from the sale is paid to a foreign country. This rule also applies to losses if the foreign
country would have imposed an income tax of
less than 10% had the sale resulted in a gain.

Community Income
If you are married and you or your spouse is
subject to the community property laws of a foreign country, U.S. state, or U.S. possession,
you must generally follow those laws to determine the income of yourself and your spouse
for U.S. tax purposes. But you must disregard
certain community property laws if:
• Both you and your spouse are nonresident
aliens, or
• One of you is a nonresident alien and the
other is a U.S. citizen or resident and you
do not both choose to be treated as U.S.
residents as explained in Nonresident
Spouse Treated as a Resident, earlier.
In these cases, you and your spouse must report community income as explained later.
Earned income. Earned income of a spouse,
other than trade or business income and a partner's distributive share of partnership income, is
treated as the income of the spouse whose
services produced the income. That spouse
must report all of it on their separate return.
Trade or business income. Trade or business income, other than a partner's distributive
share of partnership income, is treated as the
income of the spouse carrying on the trade or
business. That spouse must report all of it on
their separate return.
Partnership income (or loss). A partner's
distributive share of partnership income (or
loss) is treated as the income (or loss) of the
partner. The partner must report all of it on their
separate return.
Separate property income. Income derived
from the separate property of one spouse (and
which is not earned income, trade or business
income, or partnership distributive share income) is treated as the income of that spouse.
That spouse must report all of it on their separate return. Use the appropriate community
property law to determine what is separate
property.
Other community income. All other community income is treated as provided by the applicable community property laws.

3.
Exclusions From
Gross Income
Introduction
Resident and nonresident aliens are allowed
exclusions from gross income if they meet certain conditions. An exclusion from gross income
is generally income you receive that is not included in your U.S. income and is not subject to
U.S. tax. This chapter covers some of the more
common exclusions allowed to resident and
nonresident aliens.

Topics

This chapter discusses:

• Nontaxable interest,
• Nontaxable dividends,
• Certain compensation paid by a foreign
employer,

• Gain from sale of home, and
• Scholarships and fellowship grants.

Useful Items

You may want to see:
Publication
54

Tax Guide for U.S. Citizens and
Resident Aliens Abroad
54

523 Selling Your Home

them. It also includes the seabed and subsoil of
those submarine areas adjacent to the country's
territorial waters over which it has exclusive
rights under international law to explore and exploit the natural resources.
The term “foreign country” does not include
U.S. possessions or territories. It does not include the Antarctic region.

Nonresident Aliens
Nonresident aliens can exclude the following
items from their gross income.

Interest Income
Interest income that is not connected with a
U.S. trade or business is excluded from income
if it is from:
• Deposits (including certificates of deposit)
with persons in the banking business;
• Deposits or withdrawable accounts with
mutual savings banks, cooperative banks,
credit unions, domestic building and loan
associations, and other savings institutions
chartered and supervised as savings and
loan or similar associations under federal
or state law (if the interest paid or credited
can be deducted by the association); and
• Amounts held by an insurance company
under an agreement to pay interest on
them.
State and local government obligations. Interest on obligations of a state or political subdivision, the District of Columbia, or a U.S. possession is generally not included in income.
However, interest on certain private activity
bonds, arbitrage bonds, and certain bonds not
in registered form is included in income.

523

See chapter 12 for information about getting
these publications.

Resident Aliens
Resident aliens may be able to exclude the following items from their gross income.

Foreign Earned Income and
Housing Amount
If you are physically present in a foreign country
or countries for at least 330 full days during any
period of 12 consecutive months, you may qualify for the foreign earned income exclusion. The
exclusion is $112,000 in 2022. In addition, you
may be able to exclude or deduct certain foreign housing amounts. You may also qualify if
you are a bona fide resident of a foreign country
and you are a citizen or national of a country
with which the United States has an income tax
treaty. For more information, see Pub. 54.
Foreign country. A foreign country is any territory under the sovereignty of a government
other than that of the United States.
The term “foreign country” includes the
country's territorial waters and airspace, but not
international waters and the airspace above

Portfolio interest. Interest and OID that qualifies as portfolio interest is not subject to chapter 3 (of the Internal Revenue Code) withholding
under sections 1441 through 1443. However,
such interest may be subject to withholding if it
is a withholdable payment, and there is no exception to chapter 4 (of the Internal Revenue
Code) withholding under sections 1471 through
1474. For more information, see the discussion
of portfolio interest under Withholding on Specific Income in Pub. 515.
To qualify as portfolio interest, the interest
must be paid on obligations issued after July
18, 1984, and otherwise subject to withholding.
For obligations issued after March 18, 2012,
portfolio interest does not include interest paid
on debt that is not in registered form. Before
March 19, 2012, portfolio interest included interest on certain registered and nonregistered
(bearer) bonds if the obligations meet the requirements described below.
Obligations in registered form. Portfolio
interest includes interest paid on an obligation
that is in registered form, and for which you
have received documentation that the beneficial
owner of the obligation is not a U.S. person.
Generally, an obligation is in registered form
if:
• The obligation is registered as to both principal and any stated interest with the issuer
Chapter 3

(or its agent) and any transfer of the obligation may be effected only by surrender of
the old obligation and reissuance to the
new holder;
• The right to principal and stated interest
with respect to the obligation may be transferred only through a book entry system
maintained by the issuer or its agent; or
• The obligation is registered as to both principal and stated interest with the issuer or
its agent and can be transferred both by
surrender and reissuance and through a
book entry system.
An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular
time if it can be converted at any time in the future into an obligation that is not in registered
form. For more information on whether obligations are considered to be in registered form,
see the discussion of portfolio interest under
Withholding on Specific Income in Pub. 515.
Obligations not in registered form. For
obligations issued before March 19, 2012, interest on an obligation that is not in registered form
(bearer obligation) is portfolio interest if the obligation is foreign targeted. A bearer obligation is
foreign targeted if:
• There are arrangements to ensure that the
obligation will be sold, or resold in connection with the original issue, only to a person
who is not a U.S. person;
• Interest on the obligation is payable only
outside the United States and its possessions; and
• The face of the obligation contains a statement that any U.S. person who holds the
obligation will be subject to limits under the
U.S. income tax laws.
Documentation is not required for interest on
bearer obligations to qualify as portfolio interest.
In some cases, however, you may need documentation for purposes of Form 1099 reporting
and backup withholding.
Interest that does not qualify as portfolio
interest. Payments to certain persons and
payments of contingent interest do not qualify
as portfolio interest. You must withhold at the
statutory rate on such payments unless some
other exception, such as a treaty provision, applies.
Contingent interest. Portfolio interest
does not include contingent interest. Contingent
interest is either of the following.
1. Interest that is determined by reference to:
• Any receipts, sales, or other cash
flow of the debtor or related person;
• Income or profits of the debtor or related person;
• Any change in value of any property
of the debtor or a related person; or
• Any dividend, partnership distributions, or similar payments made by
the debtor or a related person.
For exceptions, see section 871(h)(4)
(C).
2. Any other type of contingent interest that is
identified by the Secretary of the Treasury
in regulations.
Exclusions From Gross Income

Page 15

Related persons. Related persons include the following.
• Members of a family, including only brothers, sisters, half brothers, half sisters,
spouse, ancestors (parents, grandparents,
etc.), and lineal descendants (children,
grandchildren, etc.).
• Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules.
• Certain corporations, partnerships, and
other entities. For details, see Nondeductible Loss in chapter 2 of Pub. 544.
Exception for existing debt. Contingent
interest does not include interest paid or accrued on any debt with a fixed term that was issued:
• On or before April 7, 1993; or
• After April 7, 1993, pursuant to a written
binding contract in effect on that date and
at all times thereafter before that debt was
issued.

Dividend Income
The following dividend income is exempt from
the 30% tax.
Certain dividends paid by foreign corporations. There is no 30% tax on U.S. source dividends you receive from a foreign corporation.
See Exception under Dividends in chapter 2 for
how to figure the amount of U.S. source dividends. This exemption does not apply to dividend equivalent payments.
Certain interest-related dividends. There is
no 30% tax on interest-related dividends from
sources within the United States that you receive from a mutual fund or other regulated investment company (RIC). The mutual fund will
designate in writing which dividends are interest-related dividends.
Certain short-term capital gain dividends.
There may not be any 30% tax on certain
short-term capital gain dividends from sources
within the United States that you receive from a
mutual fund or other RIC. The mutual fund will
designate in writing which dividends are
short-term capital gain dividends. This tax relief
will not apply to you if you are present in the
United States for 183 days or more during your
tax year.

Services Performed for
Foreign Employer
If you were paid by a foreign employer, your
U.S. source income may be exempt from U.S.
tax, but only if you meet one of the situations
discussed next.
Employees of foreign persons, organizations, or offices. Income for personal services
performed in the United States as a nonresident
alien is not considered to be from U.S. sources
and is tax exempt if you meet all three of the following conditions.
1. You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnerPage 16

Chapter 3

ship, or foreign corporation not engaged in
a trade or business in the United States; or
you work for an office or place of business
maintained in a foreign country or possession of the United States by a U.S. corporation, U.S. partnership, or U.S. citizen or
resident.
2. You perform these services while you are
a nonresident alien temporarily present in
the United States for a period or periods of
not more than a total of 90 days during the
tax year.
3. Your pay for these services is not more
than $3,000.
If you do not meet all three conditions, your income from personal services performed in the
United States is U.S. source income and is
taxed according to the rules in chapter 4.
If your pay for these services is more than
$3,000, the entire amount is income from a
trade or business within the United States. To
find if your pay is more than $3,000, do not include any amounts you get from your employer
for advances or reimbursements of business
travel expenses, if you were required to and did
account to your employer for those expenses. If
the advances or reimbursements are more than
your expenses, include the excess in your pay
for these services.
A “day” means a calendar day during any
part of which you are physically present in the
United States.
Example 1. During 2022, Henry Smythe, a
nonresident alien from a nontreaty country,
worked for an overseas office of a U.S. partnership. Henry, who uses the calendar year as
Henry’s tax year, was temporarily present in the
United States for 60 days during 2022 performing personal services for the overseas office of
the partnership. That office paid Henry a total
gross salary of $2,800 for those services. During 2022, Henry was not engaged in a trade or
business in the United States. The salary is not
considered U.S. source income and is exempt
from U.S. tax.
Example 2. The facts are the same as in
Example 1, except that Henry's total gross salary for the services performed in the United
States during 2022 was $4,500. Henry received
$2,875 in 2022, and $1,625 in 2023. During
2022, Henry was engaged in a trade or business in the United States because the compensation for Henry’s personal services in the United States was more than $3,000. Henry's
salary is U.S. source income and is taxed under
the rules in chapter 4.
Crew members. Compensation for services
performed by a nonresident alien in connection
with the individual's temporary presence in the
United States as a regular crew member of a
foreign vessel (for example, a boat or ship) engaged in transportation between the United
States and a foreign country or U.S. possession
is not U.S. source income and is exempt from
U.S. tax. This exemption does not apply to
compensation for services performed on foreign
aircraft.

Exclusions From Gross Income

Students and exchange visitors. Nonresident alien students and exchange visitors
present in the United States under “F,” “J,” or
“Q” visas can exclude from gross income pay
received from a foreign employer.
This group includes bona fide students,
scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a
field of specialized knowledge or skill, or persons of similar description. It also includes the
alien's spouse and minor children if they come
with the alien or come later to join the alien.
A nonresident alien temporarily present in
the United States under a “J” visa includes an
alien individual entering the United States as an
exchange visitor under the Mutual Educational
and Cultural Exchange Act of 1961.
Foreign employer. A foreign employer is:

• A nonresident alien individual, foreign partnership, or foreign corporation; or

• An office or place of business maintained

in a foreign country or in a U.S. possession
by a U.S. corporation, a U.S. partnership,
or an individual who is a U.S. citizen or resident.

The term “foreign employer” does not include a foreign government. Pay from a foreign
government that is exempt from U.S. income
tax is discussed in chapter 10.
Income from certain annuities. Do not include in income any annuity received under a
qualified annuity plan or from a qualified trust
exempt from U.S. income tax if you meet both
of the following conditions.
1. You receive the annuity only because:
a. You performed personal services outside the United States while you were
a nonresident alien; or
b. You performed personal services inside the United States while you were
a nonresident alien and you met the
three conditions, described earlier,
under Employees of foreign persons,
organizations, or offices.
2. At the time the first amount is paid as an
annuity under the plan (or by the trust),
90% or more of the employees for whom
contributions or benefits are provided under the annuity plan (or under the plan of
which the trust is a part) are U.S. citizens
or residents.
If the annuity qualifies under condition (1)
but not condition (2) above, you do not have to
include the amount in income if:
• You are a resident of a country that gives a
substantially equal exclusion to U.S. citizens and residents, or
• You are a resident of a beneficiary developing country under Title V of the Trade
Act of 1974.
If you are not sure whether the annuity is
from a qualified annuity plan or qualified trust,
ask the person who made the payment.
Income affected by treaties. Income of any
kind that is exempt from U.S. tax under a treaty
to which the United States is a party is excluded
from your gross income. Income on which the

tax is only limited by treaty, however, is included in gross income. See chapter 9.

ance at the place where it carries on its educational activities.

Gambling Winnings From
Dog or Horse Racing

Qualified education expenses. These are
expenses for:
• Tuition and fees required to enroll at or attend an eligible educational institution; and
• Course-related expenses, such as fees,
books, supplies, and equipment that are
required for the courses at the eligible educational institution. These items must be
required of all students in your course of instruction.

You can exclude from your gross income winnings from legal wagers initiated outside the
United States in a pari-mutuel pool with respect
to a live horse or dog race in the United States.

Gain From the Sale
of Your Main Home
If you sold your main home, you may be able to
exclude up to $250,000 of the gain on the sale
of your home. If you are married and file a joint
return, you may be able to exclude up to
$500,000. For information on the requirements
for this exclusion, see Pub. 523.

!

CAUTION

This exclusion does not apply if you are
subject to the expatriation tax rules discussed in chapter 4.

Scholarships and
Fellowship Grants
If you are a candidate for a degree, you may be
able to exclude from your income part or all of
the amounts you receive as a qualified scholarship. The rules discussed here apply to both
resident and nonresident aliens.
If a nonresident alien receives a grant
TIP that is not from U.S. sources, it is not
subject to U.S. tax. See Scholarships,
Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U.S. sources.
A scholarship or fellowship is excludable
from income only if:
1. You are a candidate for a degree at an eligible educational institution, and
2. You use the scholarship or fellowship to
pay qualified education expenses.
Candidate for a degree. You are a candidate
for a degree if you:
1. Attend a primary or secondary school or
are pursuing a degree at a college or university; or
2. Attend an accredited educational institution that is authorized to provide:

However, in order for these to be qualified education expenses, the terms of the scholarship or
fellowship cannot require that it be used for
other purposes, such as room and board, or
specify that it cannot be used for tuition or
course-related expenses.
Expenses that do not qualify. Qualified
education expenses do not include the cost of:
• Room and board,
• Travel,
• Research,
• Clerical help, or
• Equipment and other expenses that are
not required for enrollment in or attendance at an eligible educational institution.
This is true even if the fee must be paid to the
institution as a condition of enrollment or attendance. Scholarship or fellowship amounts
used to pay these costs are taxable.
Amounts used to pay expenses that do not
qualify. A scholarship amount used to pay any
expense that does not qualify is taxable, even if
the expense is a fee that must be paid to the institution as a condition of enrollment or attendance.
Payment for services. You cannot exclude
from income the portion of any scholarship, fellowship, or tuition reduction that represents
payment for past, present, or future teaching,
research, or other services. This is true even if
all candidates for a degree are required to perform the services as a condition for receiving
the degree.
Example. On January 7, Maria Gomez is
notified of a scholarship of $2,500 for the spring
semester. As a condition for receiving the
scholarship, Maria must serve as a part-time
teaching assistant. Of the $2,500 scholarship,
$1,000 represents payment for Maria’s services. Assuming that Maria meets all other conditions, Maria can exclude no more than $1,500
from income as a qualified scholarship.

4.
How Income of
Aliens Is Taxed
Introduction
Resident and nonresident aliens are taxed in
different ways. Resident aliens are generally
taxed in the same way as U.S. citizens. Nonresident aliens are taxed based on the source of
their income and whether or not their income is
effectively connected with a U.S. trade or business. The following discussions will help you
determine if income you receive during the tax
year is effectively connected with a U.S. trade
or business and how it is taxed.

Topics

This chapter discusses:

• Income that is effectively connected with a
U.S. trade or business,

• Income that is not effectively connected
with a U.S. trade or business,

• Interrupted period of residence, and
• Expatriation tax.

Useful Items

You may want to see:
Publication
544 Sales and Other Dispositions of
Assets
544

1212 List of Original Issue Discount
Instruments
1212

Form (and Instructions)
6251 Alternative Minimum
Tax—Individuals
6251

Schedule D (Form 1040) Capital Gains
and Losses
Schedule D (Form 1040)

See chapter 12 for information about getting
these publications and forms.

Resident Aliens
Resident aliens are generally taxed in the same
way as U.S. citizens. This means that their
worldwide income is subject to U.S. tax and
must be reported on their U.S. tax return. Income of resident aliens is subject to the graduated tax rates that apply to U.S. citizens. Resident aliens use the Tax Table or Tax
Computation Worksheets located in the Instructions for Form 1040, which apply to U.S. citizens.

a. A program that is acceptable for full
credit toward a bachelor's or higher
degree, or
b. A program of training to prepare students for gainful employment in a recognized occupation.
Eligible educational institution. An eligible
educational institution is one that maintains a
regular faculty and curriculum and normally has
a regularly enrolled body of students in attendChapter 4

How Income of Aliens Is Taxed

Page 17

Nonresident Aliens
A nonresident alien's income that is subject to
U.S. income tax must be divided into two categories.
1. Income that is effectively connected with a
trade or business in the United States, and
2. Income that is not effectively connected
with a trade or business in the United
States (discussed under The 30% Tax,
later).
The difference between these two categories is that effectively connected income, after
allowable deductions, is taxed at graduated
rates. These are the same rates that apply to
U.S. citizens and residents. Income that is not
effectively connected is taxed at a flat 30% (or
lower treaty) rate.

!

CAUTION

chapter.

If you were formerly a U.S. citizen or
resident alien, these rules may not apply. See Expatriation Tax, later in this

Trade or Business in the
United States
Generally, you must be engaged in a trade or
business during the tax year to be able to treat
income received in that year as effectively connected with that trade or business. Whether you
are engaged in a trade or business in the United
States depends on the nature of your activities.
The discussions that follow will help you determine whether you are engaged in a trade or
business in the United States.

Personal Services
If you perform personal services in the United
States at any time during the tax year, you are
usually considered engaged in a trade or business in the United States.
Certain compensation paid to a non-

TIP resident alien by a foreign employer is

not included in gross income. For more
information, see Services Performed for Foreign Employer in chapter 3.

COVID-19 relief for certain nonresident
alien individuals temporarily performing
services or other activities in the United
States. Due to COVID-19, you may be eligible
to choose an uninterrupted period of up to 60
calendar days, beginning on or after February
1, 2020. and on or before April 1, 2020, during
which your services or other activities conducted in the United States will not be taken into
account in determining whether you were engaged in a trade or business in the United
States. To be eligible, you must have been temporarily present in the United States while performing these activities, and but for COVID-19,
you would not have performed these activities
in the United States. You were temporarily
present in the United States if, in 2020, you
were a nonresident alien (taking into account
the COVID-19 Medical Condition Travel Exception), or a U.S. citizen or lawful permanent resiPage 18

Chapter 4

dent who had a tax home outside the United
States in 2019 and reasonably expected to
have a tax home outside the United States in
2020. Your income earned during this 60-day
period will not be subject to the 30% tax discussed later in this chapter solely because you
were not treated as having a U.S. trade or business. For more information, see FAQs for Nonresident Alien Individuals and Foreign Businesses with Employees or Agents Impacted by
COVID-19 Emergency Travel Disruptions, available
at
IRS.gov/newsroom/FAQs-forNonresdient-Alien-Individuals-and-ForeignBusinesses-with-Employees-or-AgentsImpacted-by-COVID-19-Emergency-TravelDisruptions. Also, see Personal Services under
Tax Treaty Benefits in chapter 9, later.

Other Trade or Business Activities
Other examples of being engaged in a trade or
business in the United States follow.
Students and trainees. If you are temporarily
present in the United States as a nonimmigrant
under an “F,” “J,” “M,” or “Q” visa, and not otherwise engaged in a trade or business, you are
considered to be engaged in a trade or business in the United States if you have taxable income from participation in a scholarship or fellowship described in section 1441(b). The
taxable part of any scholarship or fellowship
grant that is U.S. source income is treated as
effectively connected with a trade or business in
the United States.
Note. A nonresident alien temporarily
present in the United States under a “J” visa includes a nonresident alien individual admitted
to the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961.
Business operations. If you own and operate
a business in the United States selling services,
products, or merchandise, you are, with certain
exceptions, engaged in a trade or business in
the United States.
Partnerships. If you are a member of a partnership that at any time during the tax year is
engaged in a trade or business in the United
States, you are considered to be engaged in a
trade or business in the United States.
Beneficiary of an estate or trust. If you are
the beneficiary of an estate or trust that is engaged in a trade or business in the United
States, you are treated as being engaged in the
same trade or business.
Trading in stocks, securities, and commodities. If your only U.S. business activity is trading in stocks, securities, or commodities (including hedging transactions) through a U.S.
resident broker or other agent, you are not engaged in a trade or business in the United
States.
For transactions in stocks or securities, this
applies to any nonresident alien, including a
dealer or broker in stocks and securities.

How Income of Aliens Is Taxed

For transactions in commodities, this applies
to commodities that are usually traded on an organized commodity exchange and to transactions that are usually carried out at such an exchange.
This discussion does not apply if you have a
U.S. office or other fixed place of business at
any time during the tax year through which, or
by the direction of which, you carry out your
transactions in stocks, securities, or commodities.
Trading for a nonresident alien's own
account. You are not engaged in a trade or
business in the United States if trading for your
own account in stocks, securities, or commodities is your only U.S. business activity. This applies even if the trading takes place while you
are present in the United States or is done by
your employee or your broker or other agent.
This does not apply to trading for your own
account if you are a dealer in stocks, securities,
or commodities. This does not necessarily
mean, however, that as a dealer you are considered to be engaged in a trade or business in
the United States. Determine that based on the
facts and circumstances in each case or under
the rules given above in Trading in stocks, securities, and commodities.

Effectively Connected
Income
If you are engaged in a U.S. trade or business,
all income, gain, or loss for the tax year that you
get from sources within the United States (other
than certain investment income) is treated as
effectively connected income. This applies
whether or not there is any connection between
the income and the trade or business being carried on in the United States during the tax year.
Two tests, described under Investment Income, later, determine whether certain items of
investment income (such as interest, dividends,
and royalties) are treated as effectively connected with that business.
In limited circumstances, some kinds of foreign source income may be treated as effectively connected with a trade or business in the
United States. For a discussion of these rules,
see Foreign Income, later.

Investment Income
Investment income from U.S. sources that may
or may not be treated as effectively connected
with a U.S. trade or business generally falls into
the following three categories.
1. Fixed or determinable income (interest,
dividends, rents, royalties, premiums, annuities, etc.).
2. Gains (some of which are considered capital gains) from the sale or exchange of the
following types of property.
• Timber, coal, or domestic iron ore
with a retained economic interest.
• Patents, copyrights, and similar property on which you receive contingent
payments after October 4, 1966.
• Patents transferred before October 5,
1966.

• OID obligations.
3. Capital gains (and losses).
Use the two tests described next to determine whether an item of U.S. source income
falling in one of the three categories above and
received during the tax year is effectively connected with your U.S. trade or business. If the
tests indicate that the item of income is effectively connected, you must include it with your
other effectively connected income. If the item
of income is not effectively connected, include it
with all other income discussed under The 30%
Tax, later, in this chapter.
Asset-use test. This test usually applies to income that is not directly produced by trade or
business activities. Under this test, if an item of
income is from assets (property) used in, or
held for use in, the trade or business in the United States, it is considered effectively connected.
An asset is used in, or held for use in, the
trade or business in the United States if the asset is:
• Held for the principal purpose of promoting
the conduct of a trade or business in the
United States;
• Acquired and held in the ordinary course of
the trade or business conducted in the United States (for example, an account receivable or note receivable arising from that
trade or business); or
• Otherwise held to meet the present needs
of the trade or business in the United
States and not its anticipated future needs.
Generally, stock of a corporation is not treated
as an asset used in, or held for use in, a trade or
business in the United States.
Business-activities test. This test usually applies when income, gain, or loss comes directly
from the active conduct of the trade or business. The business-activities test is most important when:
• Dividends or interest are received by a
dealer in stocks or securities,
• Royalties are received in the trade or business of licensing patents or similar property, or
• Service fees are earned by a servicing
business.
Under this test, if the conduct of the U.S. trade
or business was a material factor in producing
the income, the income is considered effectively connected.

Personal Service Income
You are usually engaged in a U.S. trade or business when you perform personal services in the
United States. Personal service income you receive in a tax year in which you are engaged in
a U.S. trade or business is effectively connected with a U.S. trade or business. Income received in a year other than the year you performed the services is also effectively
connected if it would have been effectively connected if received in the year you performed the
services. Personal service income includes wages, salaries, commissions, fees, per diem allowances, and employee allowances and

bonuses. The income may be paid to you in the
form of cash, services, or property.
If you are engaged in a U.S. trade or business only because you perform personal services in the United States during the tax year, income and gains from assets, and gains and
losses from the sale or exchange of capital assets, are generally not effectively connected
with your trade or business. However, if there is
a direct economic relationship between your
holding of the asset and your trade or business
of performing personal services, the income,
gain, or loss is effectively connected.
Pensions. If you performed personal services
in the United States after 1986, and in a later
tax year, you receive pension or retirement distributions attributable to these services when
you are a nonresident alien, such distributions
are effectively connected income to the extent
attributable to contributions. This is true
whether or not you are engaged in a U.S. trade
or business in the year you receive the pension
or retirement distributions.

Transportation Income
Transportation income (defined in chapter 2) is
effectively connected if you meet both of the following conditions.
1. You had a fixed place of business in the
United States involved in earning the income.
2. At least 90% of your U.S. source transportation income is attributable to regularly
scheduled transportation.

Real Property Gain or Loss
Gains and losses from the sale or exchange of
U.S. real property interests (whether or not they
are capital assets) are taxed as if you are engaged in a trade or business in the United
States. You must treat the gain or loss as effectively connected with that trade or business.
U.S. real property interest. This is any interest in real property located in the United States
or the U.S. Virgin Islands or any interest (other
than as a creditor) in a domestic corporation
that is a U.S. real property holding corporation.
Real property includes the following.
1. Land and unsevered natural products of
the land, such as growing crops and timber, and mines, wells, and other natural
deposits.
2. Improvements on land, including buildings, other permanent structures, and their
structural components.
3. Personal property associated with the use
of real property, such as equipment used
in farming, mining, forestry, or construction
or property used in lodging facilities or rented office space, unless the personal property is:
a. Disposed of more than 1 year before
or after the disposition of the real
property, or
b. Separately sold to persons unrelated
either to the seller or to the buyer of
the real property.

“Fixed place of business” generally means a
place, site, structure, or other similar facility
through which you engage in a trade or business. “Regularly scheduled transportation”
means that a ship or aircraft follows a published
schedule with repeated sailings or flights at regular intervals between the same points for voyages or flights that begin or end in the United
States. This definition applies to both scheduled
and chartered air transportation.

U.S. real property holding corporation.
A corporation is a U.S. real property holding
corporation if the fair market value of the corporation's U.S. real property interests are at least
50% of the total fair market value of:
• The corporation's U.S. real property interests; plus
• The corporation's interests in real property
located outside the United States; plus
• The corporation's other assets that are
used in, or held for use in, a trade or business.

If you do not meet the two conditions above,
the income is not effectively connected and is
taxed at a 4% rate. See Transportation Tax,
later in this chapter.

Stock in any domestic corporation is treated
as stock in a U.S. real property holding corporation unless you establish that the corporation is
not a U.S. real property holding corporation.

Business Profits and Losses and
Sales Transactions
All profits or losses from U.S. sources that are
from the operation of a business in the United
States are effectively connected with a trade or
business in the United States. For example,
profit from the sale in the United States of inventory property purchased either in this country or in a foreign country is effectively connected trade or business income. A share of U.S.
source profits or losses of a partnership that is
engaged in a trade or business in the United
States is also effectively connected with a trade
or business in the United States.

Chapter 4

Publicly traded exception. A U.S. real
property interest does not include a class of
stock of a corporation that is regularly traded on
an established securities market, unless you
hold more than 5% of the fair market value of
that class of stock (or more than 10% of that
stock in the case of (REITs). An interest in a foreign corporation owning U.S. real property is
generally not a U.S. real property interest unless the corporation chooses to be treated as a
domestic corporation.
Qualified investment entities (QIEs). Special rules apply to QIEs. A QIE is any REIT or
any RIC that is treated as a U.S. real property
holding corporation (after applying certain rules
in section 897(h)(4)(A)(ii)). See U.S. Real Property Interest in Pub. 515 for more information.

How Income of Aliens Is Taxed

Page 19

Look-through rule for QIEs. In most cases, any distribution from a QIE to a nonresident alien, foreign corporation, or other QIE that
is attributable to the QIE’s gain from the sale or
exchange of a U.S. real property interest is treated as gain recognized by the nonresident alien,
foreign corporation, or other QIE from the sale
or exchange of a U.S. real property interest.
Certain exceptions apply to the look-through
rule for distributions by QIEs. A distribution by a
QIE with respect to stock regularly traded on an
established securities market in the United
States is not treated as gain from the sale or exchange of a U.S. real property interest if the
shareholder owns 5% or less of that stock (or
10% or less of that stock in the case of a REIT)
at any time during the 1-year period ending on
the date of the distribution.
A distribution made by a REIT is generally
not treated as gain from the sale or exchange of
a U.S. real property interest if the shareholder is
a qualified shareholder (as described in section
897(k)(3)).
A distribution that you do not treat as gain
from the sale or exchange of a U.S. real property interest may be included in your gross income as a regular dividend.
Disposition of REIT stock. Dispositions of
stock in a REIT that is held directly (or indirectly
through one or more partnerships) by a qualified shareholder will not be treated as a U.S.
real property interest. See sections 897(k)(2)
through (4) for more information.
Domestically controlled QIE. The sale of
an interest in a domestically controlled QIE is
not the sale of a U.S. real property interest. The
entity is domestically controlled if at all times
during the testing period less than 50% in value
of its stock was held, directly or indirectly, by
foreign persons. The testing period is the
shorter of the:
• 5-year period ending on the date of disposition, or
• Period during which the entity was in existence.
For the purpose of determining whether a
QIE is domestically controlled, the following
rules apply.
1. A person holding less than 5% of any
class of stock of the QIE, which is regularly
traded on an established securities market
in the United States at all times during the
testing period, would be treated as a U.S.
person unless the QIE has actual knowledge that such person is not a U.S. person.
2. Any stock in a QIE that is held by another
QIE will be treated as held by a foreign
person if:
a. Any class of stock of such other QIE
is regularly traded on an established
securities market, or
b. Such other QIE is a RIC that issues
certain redeemable securities.
Notwithstanding the above, the stock
of the QIE will be treated as held by a U.S.
person if such other QIE is domestically
controlled.

Page 20

Chapter 4

3. Stock in a QIE held by any other QIE not
described above will be treated as held by
a U.S. person in proportion to the stock of
such other QIE that is (or is treated as)
held by a U.S. person.
Wash sale. If you dispose of an interest in
a domestically controlled QIE in an applicable
wash sale transaction, special rules apply. An
applicable wash sale transaction is one in which
you:
1. Dispose of an interest in the domestically
controlled QIE during the 30-day period
before the ex-dividend date of a distribution that you would (but for the disposition)
have treated as gain from the sale or exchange of a U.S. real property interest;
and
2. Acquire, or enter into a contract or option
to acquire, a substantially identical interest
in that entity during the 61-day period that
began on the first day of the 30-day period.
If this occurs, you are treated as having a gain
from the sale or exchange of a U.S. real property interest in an amount equal to the distribution that would have been treated as such gain.
This also applies to any substitute dividend payment.
A transaction is not treated as an applicable
wash sale transaction if:
• You actually receive the distribution from
the domestically controlled QIE related to
the interest disposed of, or acquired, in the
transaction; or
• You dispose of any class of stock in a QIE
that is regularly traded on an established
securities market in the United States but
only if you did not own more than 5% of
that class of stock at any time during the
1-year period ending on the date of the distribution.
Alternative minimum tax. There may be a
minimum tax on your net gain from the disposition of U.S. real property interests. Figure the
amount of this tax, if any, on Form 6251.
Withholding of tax. If you dispose of a U.S.
real property interest, the buyer may have to
withhold tax. See the discussion of Tax withheld
on real property sales in chapter 8.

Gain or Loss of Foreign Persons
From the Sale or Exchange of
Certain Partnership Interests
If you are a direct or indirect foreign partner in a
U.S. or foreign partnership that is engaged (or
is treated as engaged) in a trade or business
within the United States and you directly or indirectly dispose of that interest, then the gain or
loss from the disposition of that partnership interest may affect your federal tax liability. Under
section 864(c)(8), your gain or loss from the
sale, exchange, or other disposition of that partnership interest is treated as effectively connected with the conduct of a trade or business
within the United States (“effectively connected
gain” or “effectively connected loss”). However,
the amount of effectively connected gain or effectively connected loss is limited to the portion

How Income of Aliens Is Taxed

of what your distributive share of effectively
connected gain or loss would have been had
the partnership sold all of its assets at fair market value as of the date of the disposition.
Section 864(c)(8) applies to sales, exchanges, or other dispositions occurring on or
after November 27, 2017. On November 6,
2020, final regulations under section 864(c)(8)
were issued applicable to transfers occurring on
or after December 26, 2018. See Regulations
section 1.864(c)(8)-1(j).

Foreign Income
You must treat three kinds of foreign source income as effectively connected with a trade or
business in the United States if:
• You have an office or other fixed place of
business in the United States to which the
income can be attributed,
• That office or place of business is a material factor in producing the income, and
• The income is produced in the ordinary
course of the trade or business carried on
through that office or other fixed place of
business.
An office or other fixed place of business is
a material factor if it significantly contributes to,
and is an essential economic element in, the
earning of the income.
The three kinds of foreign source income
are listed below.
1. Rents and royalties for the use of, or for
the privilege of using, intangible personal
property located outside the United States
or from any interest in such property. Included are rents or royalties for the use, or
for the privilege of using, outside the United States, patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and
similar properties if the rents or royalties
are from the active conduct of a trade or
business in the United States.
2. Dividends, interest, or amounts received
for the provision of a guarantee of indebtedness issued after September 27, 2010,
from the active conduct of a banking, financing, or similar business in the United
States. A substitute dividend or interest
payment received under a securities lending transaction or a sale-repurchase transaction is treated the same as the amounts
received on the transferred security.
3. Income, gain, or loss from the sale outside
the United States, through the U.S. office
or other fixed place of business, of:
a. Stock in trade,
b. Property that would be included in inventory if on hand at the end of the tax
year, or
c. Property held primarily for sale to customers in the ordinary course of business.
Item (3) will not apply if you sold the
property for use, consumption, or disposition outside the United States and an

office or other fixed place of business in a
foreign country was a material factor in the
sale.
Any foreign source income that is equivalent
to any item of income described above is treated as effectively connected with a U.S. trade or
business. For example, foreign source interest
and dividend equivalents are treated as U.S. effectively connected income if the income is derived by a foreign person in the active conduct
of a banking, financing, or similar business
within the United States.

Tax on Effectively Connected
Income
Income you receive during the tax year that is
effectively connected with your trade or business in the United States is, after allowable deductions, taxed at the rates that apply to U.S.
citizens and residents.
Generally, you can receive effectively connected income only if you are a nonresident
alien engaged in a trade or business in the United States during the tax year. However, if you
receive payments from the sale or exchange of
property, the performance of services, or any
other transaction during a tax year in which you
are not engaged in a U.S. trade or business, but
such payments would have been treated as effectively connected income in the year the
transaction took place or you performed the
services, then they are treated as effectively
connected income in the tax year you received
them.
Example. Ted Richards entered the United
States in August 2021 to perform personal services in the U.S. office of an overseas employer.
Ted worked in the U.S. office until December
25, 2021, but did not leave this country until
January 11, 2022. On January 8, 2022, Ted received the final paycheck for services performed in the United States during 2021. All of
Ted's income during Ted’s stay here is U.S.
source income.
During 2021, Ted was engaged in the trade
or business of performing personal services in
the United States. Therefore, all amounts paid
to him in 2021 for services performed in the United States during 2021 are effectively connected with that trade or business during 2021.
The salary payment Ted received in January
2022 is U.S. source income to Ted in 2022. It is
effectively connected income because Ted performed the services that earned the income in
the United States in 2021 and, therefore, Ted
would have been treated as engaged in a trade
or business in the United States during 2021.
Real property income. You may be able to
choose to treat all income from real property as
effectively connected. See Income From Real
Property, later in this chapter.

The 30% Tax
Tax at a 30% (or lower treaty) rate applies to
certain items of income or gains from U.S. sources but only if the items are not effectively connected with your U.S. trade or business.

Fixed or Determinable Income
The 30% (or lower treaty) rate applies to the
gross amount of U.S. source fixed or determinable annual or periodic gains, profits, or income.
Income is fixed when it is paid in amounts
known ahead of time. Income is determinable
whenever there is a basis for figuring the
amount to be paid. Income can be periodic if it
is paid from time to time. It does not have to be
paid annually or at regular intervals. Income can
be determinable or periodic even if the length of
time during which the payments are made is increased or decreased.
Items specifically included as fixed or determinable income are interest (other than original
issue discount), dividends, dividend equivalent
payments (defined in chapter 2), rents, premiums, annuities, salaries, wages, and other compensation. A substitute dividend or interest payment received under a securities lending
transaction or a sale-repurchase transaction is
treated the same as the amounts received on
the transferred security. Other items of income,
such as royalties, may also be subject to the
30% tax.
Some fixed or determinable income

TIP may be exempt from U.S. tax. See

chapter 3 if you are not sure whether
the income is taxable.

Original issue discount (OID). If you sold,
exchanged, or received a payment on a bond or
other debt instrument that was issued at a discount, all or part of the OID (other than portfolio
interest) may be subject to the 30% tax. The
amount of OID is the difference between the
stated redemption price at maturity and the issue price of the debt instrument. The 30% tax
applies in the following circumstances.
1. You received a payment on a debt instrument. In this case, the amount of OID subject to tax is the OID that accrued while
you held the debt instrument minus the
OID previously taken into account. But the
tax on the OID cannot be more than the
payment minus the tax on the interest payment on the debt instrument.
2. You sold or exchanged the debt instrument. The amount of OID subject to tax is
the OID that accrued while you held the
debt instrument minus the amount already
taxed in (1) above.
Report on your return the amount of OID
shown on Form 1042-S if you bought the debt
instrument at original issue. However, you must
recompute your proper share of OID shown on
Form 1042-S if any of the following apply.
• You bought the debt instrument at a premium or paid an acquisition premium.
• The debt instrument is a stripped bond or a
stripped coupon (including zero coupon instruments backed by U.S. Treasury securities).
• The debt instrument is a contingent payment or inflation-indexed debt instrument.

Chapter 4

For the definition of premium and acquisition
premium and instructions on how to recompute
OID, see Pub. 1212.

Gambling Winnings
In general, nonresident aliens are subject to the
30% tax on the gross proceeds from gambling
won in the United States if that income is not effectively connected with a U.S. trade or business and is not exempted by treaty. However,
no tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in
the United States.
Nonresident aliens are taxed at graduated
rates on net gambling income won in the United
States that is effectively connected with a U.S.
trade or business.

Social Security Benefits
A nonresident alien must include 85% of any
U.S. social security benefit (and the social security equivalent part of a tier 1 railroad retirement benefit) in U.S. source fixed or determinable annual or periodic income. Social security
benefits include monthly retirement, survivor,
and disability benefits. This income is exempt
under some tax treaties. See Table 1 in the Tax
Treaty Tables, available at IRS.gov/Individuals/
International-Taxpayers/Tax-Treaty-Tables for
a list of tax treaties that exempt U.S. social security benefits from U.S. tax. For more information, see Pub. 915.

Sales or Exchanges of Capital
Assets
These rules apply only to those capital gains
and losses from sources in the United States
that are not effectively connected with a trade or
business in the United States. They apply even
if you are engaged in a trade or business in the
United States. These rules do not apply to the
sale or exchange of a U.S. real property interest
or to the sale of any property that is effectively
connected with a trade or business in the United States. See Real Property Gain or Loss,
earlier, under Effectively Connected Income.
A capital asset is everything you own except:
• Inventory;
• Business accounts or notes receivable;
• Depreciable property used in a trade or
business;
• Real property used in a trade or business;
• Supplies regularly used in a trade or business;
• Certain copyrights, literary or musical or artistic compositions, letters or memoranda,
or similar property;
• Certain U.S. Government publications;
• Certain commodities derivative financial instruments held by a commodities derivatives dealer; or
• Hedging transactions.
A capital gain is a gain on the sale or exchange of a capital asset. A capital loss is a
loss on the sale or exchange of a capital asset.
How Income of Aliens Is Taxed

Page 21

If the sale is in foreign currency, for the purpose of determining gain, the cost and selling
price of the property should be expressed in
U.S. currency at the rate of exchange prevailing
as of the date of the purchase and date of the
sale, respectively.
You can use Pub. 544 to determine what is
a sale or exchange of a capital asset, or what is
treated as such. Specific tax treatment that applies to U.S. citizens or residents generally
does not apply to you.
The following gains are subject to the 30%
(or lower treaty) rate without regard to the
183-day rule, discussed later.
1. Gains on the disposal of timber, coal, or
domestic iron ore with a retained economic interest.
2. Gains on contingent payments received
from the sale or exchange of patents,
copyrights, and similar property after October 4, 1966.
3. Gains on certain transfers of all substantial
rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966.
4. Gains on the sale or exchange of OID obligations.
Gains in (1) are not subject to the 30% (or
lower treaty) rate if you choose to treat the
gains as effectively connected with a U.S. trade
or business. See Income From Real Property,
later.
183-day rule. If you were in the United States
for 183 days or more during the tax year, your
net gain from sales or exchanges of capital assets is taxed at a 30% (or lower treaty) rate. For
purposes of the 30% (or lower treaty) rate, net
gain is the excess of your capital gains from
U.S. sources over your capital losses from U.S.
sources. This rule applies even if any of the
transactions occurred while you were not in the
United States.
To determine your net gain, consider the
amount of your gains and losses that would be
recognized and taken into account only if, and
to the extent that, they would be recognized
and taken into account if you were in a U.S.
trade or business during the year and the gains
and losses were effectively connected with that
trade or business during the tax year.
In arriving at your net gain, do not take the
following into consideration.
• The four types of gains listed earlier.
• The deduction for a capital loss carryover.
• Capital losses in excess of capital gains.
• Exclusion for gain from the sale or exchange of qualified small business stock
(section 1202 exclusion).
• Losses from the sale or exchange of property held for personal use. However, losses resulting from casualties or thefts attributable to a federally declared disaster
may be deductible on Schedule A (Form
1040-NR). See Itemized Deductions in
chapter 5.
If you are not engaged in a trade or business
in the United States and have not established a
tax year for a prior period, your tax year will be
Page 22

Chapter 4

the calendar year for purposes of the 183-day
rule. Also, you must file your tax return on a calendar year basis.
If you were in the United States for less than
183 days during the tax year, capital gains
(other than gains listed earlier) are tax exempt
unless they are effectively connected with a
trade or business in the United States during
your tax year.
Reporting. Report your gains and losses from
the sales or exchanges of capital assets that
are not effectively connected with a trade or
business in the United States on Schedule NEC
(Form 1040-NR). Report gains and losses from
sales or exchanges of capital assets (including
real property) that are effectively connected
with a trade or business in the United States on
a separate Schedule D (Form 1040) or Form
4797, or both. Attach them to Form 1040-NR.

Income From Real Property
If you have income from real property located in
the United States that you own or have an interest in and hold for the production of income,
you can choose to treat all income from that
property as income effectively connected with a
trade or business in the United States. The
choice applies to all income from real property
located in the United States and held for the
production of income and to all income from
any interest in such property. This includes income from rents, royalties from mines, oil or
gas wells, or other natural resources. It also includes gains from the sale or exchange of timber, coal, or domestic iron ore with a retained
economic interest.
You can make this choice only for real property income that is not otherwise effectively
connected with your U.S. trade or business.
If you make the choice, you can claim deductions attributable to the real property income
and only your net income from real property is
taxed.
This choice does not treat a nonresident
alien, who is not otherwise engaged in a U.S.
trade or business, as being engaged in a trade
or business in the United States during the year.
Example. You are a nonresident alien and
are not engaged in a U.S. trade or business.
You own a single-family house in the United
States that you rent out. Your rental income for
the year is $10,000. This is your only U.S.
source income. As discussed earlier under The
30% Tax, the rental income is subject to a tax at
a 30% (or lower treaty) rate. You received a
Form 1042-S showing that your tenants properly withheld this tax from the rental income.
You do not have to file a U.S. tax return (Form
1040-NR) because your U.S. tax liability is satisfied by the withholding of tax.
If you make the choice discussed earlier,
you can offset the $10,000 income by certain
rental expenses. (See Pub. 527.) Any resulting
net income is taxed at graduated rates.
If you make this choice, report the rental income and expenses on Schedule E (Form
1040). Enter the net rental income or loss from
Schedule E (Form 1040) on Schedule 1 (Form
1040), Part I, line 5. Attach Schedule 1 (Form

How Income of Aliens Is Taxed

1040) and Schedule E (Form 1040) to Form
1040-NR. For the first year you make the
choice, also attach the statement discussed
next.
Making the choice. Make the initial choice by
attaching a statement to your return, or amended return, for the year of the choice. Include
the following in your statement.
• That you are making the choice.
• Whether the choice is under section 871(d)
(explained earlier) or a tax treaty.
• A complete list of all your real property, or
any interest in real property, located in the
United States. Give the legal identification
of U.S. timber, coal, or iron ore in which
you have an interest.
• The extent of your ownership in the property.
• The location of the property.
• A description of any major improvements
to the property.
• The dates you owned the property.
• Your income from the property.
• Details of any previous choices and revocations of the real property income choice.
This choice stays in effect for all later tax
years unless you revoke it.
Revoking the choice. You can revoke the
choice without IRS approval by filing Form
1040-X for the year you made the choice and
for later tax years. You must file Form 1040-X
within 3 years from the date your return was
filed or 2 years from the time the tax was paid,
whichever is later. If this time period has expired for the year of choice, you cannot revoke
the choice for that year. However, you may revoke the choice for later tax years only if you
have IRS approval. For information on how to
get IRS approval, see Regulations section
1.871-10(d)(2).
Note. You can file your Form 1040-X electronically beginning with the 2019 tax year. For
more information, see IR-2020-107.

Transportation Tax
A 4% tax rate applies to transportation income
that is not effectively connected because it
does not meet the two conditions listed earlier
under Transportation Income. If you receive
transportation income subject to the 4% tax,
you should figure the tax and show it on line 23c
of Form 1040-NR. Attach a statement to your
return that includes the following information (if
applicable).
• Your name, TIN, and tax year.
• A description of the types of services performed (whether on or off board).
• Names of vessels or registration numbers
of aircraft on which you performed the
services.
• Amount of U.S. source transportation income derived from each type of service for
each vessel or aircraft for the calendar
year.
• Total amount of U.S. source transportation
income derived from all types of services
for the calendar year.
This 4% tax applies to your U.S. source
gross transportation income. This only includes

transportation income that is treated as derived
from sources in the United States if the transportation begins or ends in the United States.
For transportation income from personal services, the transportation must be between the
United States and a U.S. possession. For personal services of a nonresident alien, this only
applies to income derived from, or in connection with, an aircraft.

Interrupted Period of
Residence
You are subject to tax under a special rule if you
interrupt your period of U.S. residence with a
period of nonresidence. The special rule applies if you meet all of the following conditions.
1. You were a U.S. resident for a period that
includes at least 3 consecutive calendar
years.
2. You were a U.S. resident for at least 183
days in each of those years.
3. You ceased to be treated as a U.S. resident.
4. You then again became a U.S. resident
before the end of the third calendar year
after the end of the period described in (1)
above.
Under this special rule, you are subject to
tax on your U.S. source gross income and gains
on a net basis at the graduated rates applicable
to individuals (with allowable deductions) for the
period you were a nonresident alien, unless you
would be subject to a higher tax under section
871 (rules that normally apply to taxation of a
nonresident alien’s income, discussed earlier)
after taking into account any applicable treaty
benefit. For information on how to figure the
special tax, see Expatriation Tax, later.
Example. John Willow, a citizen of New
Zealand, entered the United States on April 1,
2017, as a lawful permanent resident. On August 1, 2019, John ceased to be a lawful permanent resident and returned to New Zealand.
During John’s period of residence, John was
present in the United States for at least 183
days in each of 3 consecutive years (2017,
2018, and 2019). John returned to the United
States on October 5, 2022, as a lawful permanent resident. John became a resident before
the close of the third calendar year (2022) beginning after the end of John’s first period of
residence (August 1, 2019). Therefore, John is
subject to tax under the special rule for the period of nonresidence (August 2, 2019, through
October 4, 2022) if it is more than the tax that
would normally apply to John as a nonresident
alien.
Reporting requirements. If you are subject
to this tax for any year in the period you were a
nonresident alien, you must file Form 1040-NR
for that year. The return is due by the due date
(including extensions) for filing your U.S. income tax return for the year that you again become a U.S. resident. If you already filed returns for that period, you must file amended
returns. You must attach a statement to your return that identifies the source of all of your U.S.

and foreign gross income and the items of income subject to this special rule.

Expatriation Tax
The expatriation tax provisions apply to U.S.
citizens who have renounced their citizenship
and LTRs who have ended their residency. The
following section describes the expatriation
rules under section 877A, which applies to individuals who expatriated on or after June 17,
2008. See Expatriation After June 16, 2008,
later. If you expatriated before June 17, 2008,
refer to Expatriation After June 3, 2004, and Before June 17, 2008 in chapter 4 of the 2018
Pub. 519, and the 2018 Instructions for Form
8854.
If you renounced your citizenship or
terminated your long-term residency
CAUTION after June 3, 2004, and before June
17, 2008, you will still be considered a U.S. citizen or a U.S. resident for tax purposes until you
notify the Department of State or Department of
Homeland Security (as applicable) of your expatriation and file Form 8854 with the IRS.

!

Long-term resident (LTR) defined. You are
an LTR if you were a lawful permanent resident
of the United States in at least 8 of the last 15
tax years ending with the year your residency
ends. In determining if you meet the 8-year requirement, do not count any year that you are
treated as a resident of a foreign country under
a tax treaty and do not waive treaty benefits.

Expatriation After June 16,
2008
Expatriation date. Your expatriation date is
the date you relinquish U.S. citizenship (in the
case of a former citizen) or terminate your
long-term residency (in the case of a former
U.S. resident).
Former U.S. citizen. You are considered
to have relinquished your U.S. citizenship on
the earliest of the following dates.
1. The date you renounced U.S. citizenship
before a diplomatic or consular officer of
the United States (provided that the voluntary renouncement was later confirmed by
the issuance of a certificate of loss of nationality).

1. The date you voluntarily relinquished your
lawful permanent resident status by filing
Department of Homeland Security Form
I-407 with a U.S. consular or immigration
officer.
2. The date you became subject to a final administrative order that you abandoned
your lawful permanent resident status (or,
if such order has been appealed, the date
of a final judicial order issued in connection with such administrative order).
3. The date you became subject to a final administrative order for your removal from
the United States under the Immigration
and Nationality Act.
4. If you were a dual resident of the United
States and a country with which the United
States has an income tax treaty, the date
you began to be treated as a resident of
that country under the provisions of the
treaty and notified the IRS of that treatment on Forms 8833 and 8854. See Effect
of Tax Treaties in chapter 1 for more information about dual residents.
Covered expatriate. If you expatriated after
June 16, 2008, you are treated as a covered expatriate, and the expatriation rules under section 877A apply to you if you meet any of the following conditions.
1. Your average annual net income tax for
the 5 years ending before the date of expatriation or termination of residency is
more than the following.
a. $139,000 if you expatriated or terminated residency in 2008.
b. $145,000 if you expatriated or terminated residency in 2009 or 2010.
c. $147,000 if you expatriated or terminated residency in 2011.
d. $151,000 if you expatriated or terminated residency in 2012.
e. $155,000 if you expatriated or terminated residency in 2013.
f. $157,000 if you expatriated or terminated residency in 2014.
g. $160,000 if you expatriated or terminated residency in 2015.
h. $161,000 if you expatriated or terminated residency in 2016.
i. $162,000 if you expatriated or terminated residency in 2017.

2. The date you furnished to the State Department a signed statement of voluntary
relinquishment of U.S. nationality confirming the performance of an expatriating act
(provided that the voluntary relinquishment was later confirmed by the issuance
of a certificate of loss of nationality).

k. $168,000 if you expatriated or terminated residency in 2019.

3. The date the State Department issued a
certificate of loss of nationality.

l. $171,000 if you expatriated or terminated residency in 2020.

4. The date that a U.S. court canceled your
certificate of naturalization.

m. $172,000 if you expatriated or terminated residency in 2021.

Former LTR. You are considered to have
terminated your long-term residency on the earliest of the following dates.

n. $178,000 if you expatriated or terminated residency in 2022.

Chapter 4

j. $165,000 if you expatriated or terminated residency in 2018.

2. Your net worth is $2 million or more on the
date of your expatriation or termination of
residency.
How Income of Aliens Is Taxed

Page 23

3. You fail to certify on Form 8854 that you
have complied with all U.S. federal tax obligations for the 5 years preceding the date
of your expatriation or termination of residency.
Relief procedures for certain former citizens. If you were a U.S. citizen who expatriated after March 18, 2010, you may be eligible
for certain relief procedures that provide an alternative means for satisfying the tax compliance certification process. For more information, see Relief Procedures for Certain Former
Citizens, available at IRS.gov/Individuals/
International-Taxpayers/Relief-Procedures-forCertain-Former-Citizens.
Exception for dual-citizens and certain minors. Certain dual-citizens and certain minors
(defined next) are not subject to the expatriation
tax even if they meet (1) or (2) above. However,
they must still provide the certification required
in (3) above.
Certain dual-citizens. You may qualify for
the exception described above if both of the following apply.
• You became at birth a U.S. citizen and a
citizen of another country and, as of the expatriation date, you continue to be a citizen
of, and are taxed as a resident of, that
other country.
• You have been a resident of the United
States for not more than 10 years during
the 15-year tax period ending with the tax
year during which the expatriation occurs.
For the purpose of determining U.S. residency, use the substantial presence test
described in chapter 1.
Certain minors. You may qualify for the
exception described earlier if you meet both of
the following requirements.
• You expatriated before you were age 181/2.
• You have been a resident of the United
States for not more than 10 tax years before the expatriation occurs. For the purpose of determining U.S. residency, use
the substantial presence test described in
chapter 1.

How To Figure the Expatriation
Tax if You Are a Covered
Expatriate
In the year you expatriate, you are subject to income tax on the net unrealized gain (or loss) in
your property as if the property had been sold
for its fair market value on the day before your
expatriation date (“mark-to-market tax”). This
applies to most types of property interests you
held on the date of relinquishment of citizenship
or termination of residency. But see Exceptions,
later.
Gains arising from deemed sales must be
taken into account for the tax year of the
deemed sale without regard to other U.S. Internal Revenue laws. Losses from deemed sales
must be taken into account to the extent otherwise provided under U.S. Internal Revenue
laws. However, section 1091 (relating to the
disallowance of losses on wash sales of stock
and securities) does not apply. The net gain
Page 24

Chapter 5

Figuring Your Tax

that you must otherwise include in your income
is reduced (but not below zero) by the following.
1. $600,000 if you expatriated or terminated
residency before January 1, 2009.
2. $626,000 if you expatriated or terminated
residency in 2009.

3. Have an interest in a nongrantor trust.
Deferral of payment of mark-to-market tax.
You can make an irrevocable election to defer
payment of the mark-to-market tax imposed on
the deemed sale of property. If you make this
election, the following rules apply.

3. $627,000 if you expatriated or terminated
residency in 2010.

1. You can make the election on a property-by-property basis.

4. $636,000 if you expatriated or terminated
residency in 2011.

2. The deferred tax attributable to a particular
property is due on the return for the tax
year in which you dispose of the property.

5. $651,000 if you expatriated or terminated
residency in 2012.
6. $668,000 if you expatriated or terminated
residency in 2013.
7. $680,000 if you expatriated or terminated
residency in 2014.

3. Interest is charged for the period the tax is
deferred.
4. The due date for the payment of the deferred tax cannot be extended beyond the
earlier of the following dates.
a. The due date of the return required for
the year of death.

8. $690,000 if you expatriated or terminated
residency in 2015.

b. The time that the security provided for
the property fails to be adequate. See
item (6) below.

9. $693,000 if you expatriated or terminated
residency in 2016.
10. $699,000 if you expatriated or terminated
residency in 2017.
11. $711,000 if you expatriated or terminated
residency in 2018.
12. $725,000 if you expatriated or terminated
residency in 2019.
13. $737,000 if you expatriated or terminated
residency in 2020.
14. $744,000 if you expatriated or terminated
residency in 2021.

5. You make the election on Form 8854.
6. You must provide adequate security (such
as a bond).
7. You must make an irrevocable waiver of
any right under any treaty of the United
States that would preclude assessment or
collection of the mark-to-market tax.
For more information about the deferral of
payment, see the Instructions for Form 8854.

15. $767,000 if you expatriated or terminated
residency in 2022.
Exceptions. The mark-to-market tax does not
apply to the following.
1. Eligible deferred compensation items.
2. Ineligible deferred compensation items.
3. Interests in nongrantor trusts.
4. Specified tax deferred accounts.
Instead, items (1) and (3) may be subject to
withholding at source. In the case of item (2),
you are treated as receiving the present value
of your accrued benefit as of the day before
your expatriation date. In the case of item (4),
you are treated as receiving a distribution of
your entire interest in the account on the day
before your expatriation date. See Notice
2009-85 and the Instructions for Form 8854 for
more information.

Expatriation Tax Return
You must file an initial Form 8854 in the year
you relinquish your U.S. citizenship or terminate
your long-term residency, even if you are not a
covered expatriate. In addition, you must file a
Form 8854 annually after you expatriate if you
are a covered expatriate and you:
1. Deferred the payment of mark-to-market
tax (see Deferral of payment of
mark-to-market tax, later),
2. Have an item of eligible deferred compensation, or

5.
Figuring Your
Tax
Introduction
After you have determined your alien status, the
source of your income, and if and how that income is taxed in the United States, your next
step is to figure your tax. The information in this
chapter is not as comprehensive for resident
aliens as it is for nonresident aliens. Resident
aliens should get publications, forms, and instructions for U.S. citizens because the information for filing returns for resident aliens is generally the same as for U.S. citizens.
If you are both a nonresident alien and a
resident alien in the same tax year, see chapter 6 for a discussion of dual-status aliens.

Topics

This chapter discusses:

• Identification numbers,
• Filing status,

•
•
•
•
•

Deductions,
Dependents,
Itemized deductions,
Tax credits and payments, and
Special rules for bona fide residents of
American Samoa and Puerto Rico.

Useful Items

You may want to see:
Publication
463 Travel, Gift, and Car Expenses
463

501 Dependents, Standard Deduction,
and Filing Information

a trade or business as a sole proprietor and
have employees or a qualified retirement plan.
You must furnish a TIN if you are:
• An alien who has income effectively connected with the conduct of a U.S. trade or
business at any time during the year;
• An alien who has a U.S. office or place of
business at any time during the year;
• A nonresident spouse treated as a resident, as discussed in chapter 1; or
• Any other alien who files a tax return, an
amended return, or a refund claim (but not
information returns).

ITINs assigned before 2013 have ex-

TIP pired and must be renewed if you need

to file a tax return in 2023. If you previously submitted a renewal application and it
was approved, you do not need to renew again
unless you haven't used your ITIN on a federal
tax return at least once for tax year 2019, 2020,
or 2021.

Employer identification number (EIN). An
individual may use an SSN (or ITIN) for individual taxes and an EIN for business taxes. To apply for an EIN, file Form SS-4 with the IRS.

501

521 Moving Expenses
521

526 Charitable Contributions
526

535 Business Expenses
535

597 Information on the United States–
Canada Income Tax Treaty
597

Form (and Instructions)
W-7 Application for IRS Individual
Taxpayer Identification Number
W-7

1040 U.S. Individual Income Tax Return
1040

1040-SR U.S. Tax Return For Seniors
1040-SR

1040-NR U.S. Nonresident Alien Income
Tax Return
1040-NR

2106 Employee Business Expenses

Social security number (SSN). Generally,
you can get an SSN if you have been lawfully
admitted to the United States for permanent
residence or under other immigration categories that authorize U.S. employment.
To apply for a new SSN, you must submit
Form SS-5 and the required documents in person at your local Social Security Administration
(SSA) office. To get Form SS-5, you can download Form SS-5 at SSA.gov/forms, call the SSA
at 800-772-1213, or go to your local SSA office.
For more information, go to Social Security
Number and Card.
International students. If you have an F-1,
M-1, or J-1 visa, see SSA Pub. 05-10181, available at SSA.gov/Pubs/10181.html, for more information about the documents you must provide to prove your immigrant status.

2106

3903 Moving Expenses
3903

4563 Exclusion of Income for Bona Fide
Residents of American Samoa
4563

8959 Additional Medicare Tax
8959

8990 Limitation on Business Interest
Expense Under Section 163(j)
8990

See chapter 12 for information about getting
these publications and forms.

Tax Year
You must figure your income and file a tax return on the basis of an annual accounting period called a tax year. If you have not previously
established a fiscal tax year, your tax year is the
calendar year. A calendar year is 12 consecutive months ending on December 31. If you
have previously established a regular fiscal year
(12 consecutive months ending on the last day
of a month other than December or a 52-53
week year) and are considered to be a U.S. resident for any calendar year, you will be treated
as a U.S. resident for any part of your fiscal year
that falls within that calendar year.

Identification Number
A taxpayer identification number (TIN) must be
furnished on returns, statements, and other
tax-related documents. For an individual, this is
a social security number (SSN). If you do not
have and are not eligible to get an SSN, you
must apply for an individual taxpayer identification number (ITIN). An employer identification
number (EIN) is required if you are engaged in

Individual taxpayer identification number
(ITIN). If you already have an ITIN, enter it
wherever an SSN is required on your tax return.
If you do not have and are not eligible to get an
SSN, you must apply for an ITIN. For details on
how to do so, see Form W-7 and its instructions.
If you qualify for an ITIN and your application
is complete, you will receive a letter from the
IRS assigning your tax identification number,
usually within 7 weeks. If you have not received
your ITIN or other correspondence 7 weeks after applying, call the IRS toll-free number at
800-829-1040 to request the status of your application if you are in the United States. If you
are outside the United States, call
267-941-1000 (not a toll-free number).
An ITIN is for tax use only. It does not entitle
you to social security benefits or change your
employment or immigration status under U.S.
law.
In addition to those aliens who are required
to furnish a TIN and are not eligible for an SSN,
a Form W-7 must be filed for alien spouses or
dependents who qualify for an allowable tax
benefit and are not eligible for an SSN.
Additional information on obtaining an ITIN
is available in the Instructions for Form W-7 and
at IRS.gov/ITIN.
Expired ITIN. Some ITINs must be renewed. If you haven't used your ITIN on a federal tax return at least once for tax year 2019,
2020, or 2021, it expired at the end of 2022 and
must be renewed if you need to file a federal tax
return in 2023. You do not need to renew your
ITIN if you do not need to file a federal tax return. To renew your ITIN, see Form W-7 and its
instructions at IRS.gov/FormW7. For more information, go to IRS.gov/ITIN.

Filing Status
The amount of your tax depends on your filing
status. Your filing status is important in determining whether you can take certain deductions
and credits. The rules for determining your filing
status are different for resident aliens and nonresident aliens.

Resident Aliens
Resident aliens can use the same filing statuses available to U.S. citizens. See your form
instructions or Pub. 501 for more information on
filing status.
Married filing jointly. Generally, you can file
as married filing jointly only if both you and your
spouse were U.S. citizens or resident aliens for
the entire tax year, or if you choose to be a nonresident spouse treated as a resident, as discussed in chapter 1.
Qualifying surviving spouse. If your spouse
died in 2020 or 2021 and you did not remarry
before the end of 2022, you may qualify to file
as a qualifying surviving spouse and use the
joint return tax rates. This applies only if you
could have filed a joint return with your spouse
for the year your spouse died.
For more information on the qualifying surviving spouse filing status, see Qualifying Surviving Spouse under Filing Status in the 2022
Instructions for Form 1040.
Head of household. You can qualify as head
of household if you are unmarried or considered
unmarried on the last day of the year and you
pay more than half the cost of keeping up a
home for you and a qualifying person. You must
be a resident alien for the entire tax year.
You are considered unmarried for this purpose if your spouse was a nonresident alien at
any time during the year and your spouse
doesn’t choose to be treated as a resident, as
discussed in chapter 1 under Nonresident
Spouse Treated as a Resident.
Note. Even if you are considered unmarried
for head of household purposes because you
are married to a nonresident alien, you may still
be considered married for purposes of the
earned income credit (EIC). In that case, you
will need to meet the special rule for separated
spouses to claim the credit. See Pub. 596 for
more information.

Chapter 5

Figuring Your Tax

Page 25

Nonresident Aliens
If you are a nonresident alien filing Form
1040-NR, you may be able to use one of the filing statuses discussed later.
Married nonresident alien. Married nonresident aliens who are not married to U.S. citizens
or residents must generally use the Tax Table
column or the Tax Computation Worksheet for
married filing separate returns when determining the tax on income effectively connected with
a U.S. trade or business.
Exceptions. Married nonresident aliens
normally cannot use the Tax Table column or
the Tax Computation Worksheet for single individuals. However, you may be able to file as
single if you lived apart from your spouse during
the last 6 months of the year and you are a married resident of Canada, Mexico, or South Korea, or are a married U.S. national. See the Instructions for Form 1040-NR to see if you
qualify. “U.S. national” is defined later in this
section.
A nonresident alien generally cannot file as
married filing jointly. However, a nonresident
alien who is married to a U.S. citizen or resident
can choose to be treated as a resident and file a
joint return on Form 1040 or 1040-SR. For information on these choices, see chapter 1. If you
do not make the choice to file jointly, file Form
1040-NR and use the Tax Table column or the
Tax Computation Worksheet for married individuals filing separately.
U.S. national. An individual who, although
not a U.S. citizen, owes their allegiance to the
United States is considered a U.S. national.
Also, U.S. nationals include American Samoans
and Northern Mariana Islanders who choose to
become U.S. nationals instead of U.S. citizens.
Qualifying surviving spouse. If your spouse
died in 2020 or 2021 and you did not remarry
before the end of 2022, you may be eligible to
file as a qualifying surviving spouse and use the
joint return tax rates.
For more information on the qualifying surviving spouse filing status, see Qualifying Surviving Spouse under Filing Status in the 2022
Instructions for Form 1040-NR.
Head of household. You cannot file as head
of household if you are a nonresident alien at
any time during the tax year. However, if you
are married, your spouse can qualify as a head
of household if:
• Your spouse is a resident alien or U.S. citizen for the entire tax year;
• You do not choose to be treated as a resident alien; and
• Your spouse meets the other requirements
for this filing status, as discussed earlier
under Resident Aliens.
Note. Even if your spouse is considered unmarried for head of household purposes because you are a nonresident alien, your spouse
may still be considered married for purposes of
the EIC. In that case, your spouse will not be
entitled to the credit unless they meet the special rule for separated spouses to claim the
credit. See Pub. 596 for more information.
Page 26

Chapter 5

Figuring Your Tax

Estates and trusts. A nonresident alien estate
or trust using Form 1040-NR must use the Tax
Rate Schedule W in the Form 1040-NR instructions when determining the tax on income effectively connected with a U.S. trade or business.
Special rules for aliens from certain U.S.
possessions. A nonresident alien who is a
bona fide resident of American Samoa or Puerto Rico for the entire tax year and who is temporarily working in the United States should see
Bona Fide Residents of American Samoa or
Puerto Rico at the end of this chapter for information about special rules.

Reporting Your Income
You must report each item of income that is taxable according to the rules in chapters 2, 3, and
4. For resident aliens, this includes income from
sources both within and outside the United
States. For nonresident aliens, this includes
both income that is effectively connected with a
trade or business in the United States (subject
to graduated tax rates) and income from U.S.
sources that is not effectively connected (subject to a flat 30% tax rate or lower tax treaty
rate).

Deductions
Resident and nonresident aliens can claim similar deductions on their U.S. tax returns. However, nonresident aliens can generally claim
only deductions related to income that is effectively connected with their U.S. trade or business.

Resident Aliens
You can claim the same deductions allowed to
U.S. citizens if you are a resident alien for the
entire tax year. While the discussion under
Nonresident Aliens, later, contains some of the
same general rules and guidelines that apply to
you, it is specifically directed toward nonresident aliens. You should get the Instructions for
Form 1040 for more information on how to claim
your allowable deductions.

Nonresident Aliens
You can claim deductions to figure your effectively connected taxable income. You generally
cannot claim deductions related to income that
is not connected with your U.S. business activities. Except for certain itemized deductions, discussed later, you can claim deductions only to
the extent they are connected with your effectively connected income.
Ordinary and necessary business expenses. You can deduct all ordinary and necessary expenses in the operation of your U.S.
trade or business to the extent they relate to income effectively connected with that trade or
business. For information about other business
expenses, see Pub. 535.
Qualified business income deduction. If you
have income effectively connected with a U.S.

trade or business, you may be able to deduct
up to 20% of your qualified business income
from your qualified trade or business, plus 20%
of your qualified REIT dividends and qualified
publicly traded partnership (PTP) income. For
more information, see Line 13a in the Instructions for Form 1040-NR.
For more information on the qualified business income deduction, see Form 8995, Form
8995-A and its schedules, and the related instructions for the forms and schedules.
Losses. You can deduct losses resulting from
transactions that you entered into for profit and
that you were not reimbursed for by insurance,
etc., to the extent that they relate to income that
is effectively connected with a trade or business
in the United States.
Note. For tax years 2018, 2019, and 2020,
the Coronavirus Aid, Relief, and Economic Security (CARES) Act repealed the limitation on
business losses under section 461(l). There is
generally no limit on the deduction of your business losses for 2020. If you filed a 2018 or 2019
tax return with a limitation on your business losses, you can file an amended tax return to use
the losses to reduce your income.
Beginning in 2021, and before 2026, you
may not deduct excess business losses. For
2022, an excess business loss is the amount of
losses from trades or businesses of a noncorporate taxpayer that is more than the threshold
amount of $270,000 ($540,000 for married taxpayers filing a joint return).
Educator expenses. If you were an eligible
educator in 2022, you can deduct as an adjustment to income up to $300 in unreimbursed
qualified expenses you paid or incurred during
2022 for certain professional development courses, and for books, supplies (other than nonathletic supplies for courses of instruction in health
or physical education), computer equipment (including related software and services), and
other supplementary equipment and materials
you use in the classroom. For more information,
see your tax form instructions.
Qualified expenses include amounts

TIP paid or incurred in 2022 for personal

protective equipment, disinfectant, and
other supplies used for the prevention of the
spread of coronavirus.
Individual retirement arrangement (IRA). If
you made contributions to a traditional IRA for
2022, you may be able to take an IRA deduction. But you must have taxable compensation
effectively connected with a U.S. trade or business to do so. A Form 5498 should be sent to
you by May 31, 2023, that shows all contributions to your traditional IRA for 2022. If you were
covered by a retirement plan (qualified pension,
profit-sharing (including 401(k)), annuity, SEP,
SIMPLE, etc.) at work or through self-employment, your IRA deduction may be reduced or
eliminated. But you can still make contributions
to a traditional IRA even if you cannot deduct
them. If you made nondeductible contributions
to a traditional IRA for 2022, you must report
them on Form 8606.
For more information, see Pub. 590-A.

Moving expenses. The deduction for moving
expenses is only available if you are a member
of the U.S. Armed Forces on active duty and,
due to a military order, you move because of a
permanent change of station. For more information, see Pub. 3. If you qualify, use Form 3903
to figure the amount to deduct.
Services or reimbursements provided by
government to members of the U.S. Armed
Forces. Do not include in income the value of
moving and storage services provided by the
government because of a move pursuant to a
military order incident to a permanent change of
station. Similarly, do not include in income
amounts received as a dislocation allowance,
temporary lodging expense, temporary lodging
allowance, or move-in housing allowance. For
more information, see Pub. 3.
Self-employed SEP, SIMPLE, and qualified
retirement plans. If you are self-employed,
you may be able to deduct contributions to a
SEP, SIMPLE, or qualified retirement plan that
provides retirement benefits for yourself and
your common-law employees, if any. To make
deductible contributions for yourself, you must
have net earnings from self-employment that
are effectively connected with your U.S. trade
or business.
Get Pub. 560 for further information.
Penalty on early withdrawal of savings. You
must include in income all effectively connected
interest income you receive or that is credited to
your account during the year. Do not reduce it
by any penalty you must pay on an early withdrawal from a time savings account. However, if
the interest income is effectively connected with
your U.S. trade or business during the year, you
can deduct on line 18 of Schedule 1 (Form
1040) the amount of the early withdrawal penalty that the banking institution charged. Attach
Schedule 1 (Form 1040) to your Form 1040-NR.
Student loan interest deduction. If you paid
interest in 2022 on a qualified student loan, you
may be able to deduct up to $2,500 of the interest you paid. Generally, you can claim the deduction if all the requirements are met.
The deduction is taken on line 21 of Schedule 1 (Form 1040). Attach Schedule 1 (Form
1040) to your Form 1040-NR.
To figure the deduction, see the Instructions
for Form 1040-NR. For more information, see
Pub. 970.

Dependents
Resident aliens can claim their dependents in
the same way as U.S. citizens. However, only
nonresident aliens who are U.S. nationals; residents of Canada, Mexico, and South Korea; or
residents of India who were students or business apprentices can have a qualifying dependent. See Nonresident Aliens, later.
In general, a dependent is a qualifying
child or a qualifying relative. However, the
following exceptions apply.
1. An individual who is a dependent of a taxpayer is treated as having no dependents.

2. An individual who is married at the end of
the year can't be claimed as a dependent
if the individual files a joint return, unless
the joint return is filed only to claim a refund of withheld income taxes or estimated tax paid.
3. An individual claimed as a dependent
must be a citizen, national, or resident of
the United States, or a resident of Canada
or Mexico.
If you do not show the dependent's
SSN, ITIN, or adoption taxpayer identiCAUTION fication number (ATIN) in the Dependents section of your tax return, or if you show an
incorrect number, certain tax benefits may be
disallowed. See Identification Number, earlier.

!

Resident Aliens
If you are a resident alien, a qualifying dependent includes your qualifying child or qualifying
relative. Five tests must be met for a child to be
your qualifying child. Four tests must be met for
a person to be your qualifying relative. For more
information, see the Instructions for Form 1040.
If you do not show the dependent's
SSN, ITIN, or adoption taxpayer identiCAUTION fication number (ATIN) in the Dependents section of your tax return, or if you show an
incorrect number, certain tax benefits may be
disallowed. See Identification Number, earlier.

!

Nonresident Aliens
See Pub. 501 for more information.
Residents of Mexico or Canada, or U.S. nationals. If you are a resident of Mexico or Canada, or a national of the United States, you can
claim each of your dependents who meets certain tests. Residents of Mexico or Canada, or
nationals of the United States, must use the
same rules as U.S. citizens to determine who is
a dependent. See Pub. 501 for these rules.
Residents of South Korea. A nonresident
alien who is a resident of South Korea (other
than an employee of the South Korean government) may be able to claim their child as a qualifying dependent. In addition to using the same
rules as U.S. citizens to determine who is a dependent, under the income tax treaty with South
Korea, the child must have lived with the nonresident alien in the United States at some time
during the tax year.
Students and business apprentices from India. Students and business apprentices who
are eligible for the benefits of Article 21(2) of the
United States-India Income Tax Treaty can
claim their dependents if they meet the same
rules that apply to U.S. citizens.

Itemized Deductions
Nonresident aliens can claim some of the same
itemized deductions that resident aliens can
claim. However, nonresident aliens can claim
itemized deductions only if they have income

effectively connected with their U.S. trade or
business.
There may be limitations that impact the
amount of itemized deductions you can claim
on Schedule A. See the Instructions for Schedule A (Form 1040) or Instructions for Schedule A, Itemized Deductions in the Instructions
for Form 1040-NR.

Resident Aliens
You can claim the same itemized deductions as
U.S. citizens using Schedule A (Form 1040).
See the Instructions for Schedule A (Form
1040) for more information.
If you do not itemize your deductions, you
can claim the standard deduction for your particular filing status. For further information, see
the Instructions for Form 1040.

Nonresident Aliens
You can deduct certain itemized deductions if
you receive income effectively connected with
your U.S. trade or business. You can generally
only include deductions and losses that are
properly allocated and apportioned to income
effectively connected with a U.S. trade or business. You cannot include deductions and/or
losses that relate to exempt income or to income that is not effectively connected with a
U.S. trade or business. However, you can deduct certain charitable contributions and casualty and theft losses even if they do not relate to
your effectively connected income. Use Schedule A (Form 1040-NR) to claim itemized deductions. See the Instructions for Form 1040-NR for
more information.
Standard deduction. Nonresident aliens cannot claim the standard deduction. However,
there is a special rule, described next, for certain nonresident aliens from India.
Students and business apprentices from
India. A special rule applies to students and
business apprentices who are eligible for the
benefits of Article 21(2) of the United States-India Income Tax Treaty. You can claim the
standard deduction, provided you do not claim
itemized deductions.
Use Worksheet 5-1 to figure your standard
deduction for 2022. If you are married and your
spouse files a return and itemizes deductions,
you cannot take the standard deduction.
Disaster tax relief. If you are a student or
business apprentice eligible for the benefits of
Article 21(2) of the United States-India Income
Tax Treaty who was affected by certain major
federally declared disasters in 2022 (see
IRS.gov/DisasterTaxRelief and FEMA.gov/
Disasters), you may be able to elect to increase
your standard deduction by any qualified disaster-related personal casualty losses on your
2022 tax return. Use Worksheet 5-1 to calculate
your standard deduction for 2022. See the 2022
Form 4684 and its instructions for more information on the tax benefits for qualified disaster-related personal casualty losses.
State and local income taxes. You can deduct state and local income taxes you paid on
Chapter 5

Figuring Your Tax

Page 27

Worksheet 5-1. 2022 Standard Deduction Worksheet for
Students and Business Apprentices From India

Keep for Your Records

Caution. If you are married filing a separate return and your spouse itemizes deductions, do not complete this worksheet. You cannot take the
standard deduction even if you were born before January 2, 1958, or are blind.

1. Enter the amount shown below for your filing status.
• Single or married filing separately—$12,950
• Qualifying surviving spouse—$25,900 . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . 1.
2. Can you be claimed as a dependent on someone else's U.S. income tax
return?
No. Enter the amount from line 1 on line 4. Skip line 3 and go to line 5.
Yes. Go to line 3.
3. Is your earned income* more than $750?
Yes. Add $400 to your earned income. Enter the total.
No. Enter $1,150 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the smaller of line 1 or line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4.

5. If born before January 2, 1958, OR blind, enter $1,400 ($1,750 if single). If born before January 2,
1958, AND blind, enter $2,800 ($3,500 if single). Otherwise, enter -0- . . . . . . . . . . . . . . . . . . . . . . . .

5.

6. Enter any net disaster loss from the 2022 Form 4684, line 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.

7. Add lines 4, 5, and 6. Enter the total here and on Form 1040-NR, line 12. Enter “Standard Deduction
Allowed Under U.S.-India Income Tax Treaty” in the space to the left of these lines. This is your
standard deduction for 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.

* Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. It also
includes any amount received as a scholarship that you must include in your income. Generally, your earned income is the total of the amount(s)
you reported on Form 1040-NR, lines 1z, plus Schedule 1 (Form 1040), lines 3, 6, and 8r, minus Schedule 1 (Form 1040), line 15.
income that is effectively connected with a trade
or business in the United States. Your deduction is limited to a combined total deduction of
$10,000 ($5,000 if married filing separately). If
you received a refund or rebate in 2022 of taxes
you paid in an earlier year, do not reduce your
deduction by that amount. Instead, you must include the refund or rebate in income if you deducted the taxes in the earlier year and the deduction reduced your tax. See Recoveries in
Pub. 525 for details on how to figure the amount
to include in income.
Charitable contributions. You can deduct
your charitable contributions or gifts to qualified
organizations subject to certain limits. Qualified
organizations include organizations that are religious, charitable, educational, scientific, or literary in nature, or that work to prevent cruelty to
children or animals. Certain organizations that
promote national or international amateur
sports competition are also qualified organizations.
For more information on deducting charitable contributions, see Gifts to U.S. Charities under Instructions for Schedule A, Itemized Deductions in the Instructions for Form 1040-NR.
Foreign
organizations. Contributions
made directly to a foreign organization are not
deductible. However, you can deduct contributions to a U.S. organization that transfers funds
to a charitable foreign organization if the U.S.
organization controls the use of the funds or if
the foreign organization is only an administrative arm of the U.S. organization.
Under a limited number of income tax treaties, you may be eligible to deduct contributions
Page 28

Chapter 5

Figuring Your Tax

to a charitable foreign organization. See Pub.
526 for details.
Casualty and theft losses. You may be able
to deduct casualty and theft losses on your tax
return.

!

CAUTION

You can only deduct a nonbusiness
casualty or theft loss if it is attributable
to a federally declared disaster.

If your casualty or theft loss is attributable to
a federally declared disaster, you can deduct
your loss even though your property is not connected with a U.S. trade or business. The property can be personal-use property or income-producing property not connected with a
U.S. trade or business. The property must be
located in the United States at the time of the
casualty or theft. You can deduct theft losses
only in the year in which you discover the loss.
Use Form 4684 and its instructions to figure
your deductible casualty and theft losses. For
more information, see Pub. 547.
Other itemized deductions. You may be allowed to deduct some other itemized deductions not discussed earlier. These include the
following.
• Net qualified disaster losses.
• Casualty and theft losses of income-producing property.
• Deduction for repayment of amounts under
a claim of right if over $3,000. See Pub.
525 for details.
• Certain unrecovered investment in a pension.
• Impairment-related work expenses of a
disabled person.

For more information, see the instructions
for line 7 under Instructions for Schedule A,
Itemized Deductions in the Instructions for Form
1040-NR. Also see Pub. 529.
Net qualified disaster losses. See the Instructions for Form 4684 for more information
on net qualified disaster losses. To determine if
you were affected by a major federally declared
disaster, go to IRS.gov/DisasterTaxRelief.
Losses from income-producing property. These losses are not subject to the limitations that apply to personal-use property. Use
Section B of Form 4684 to figure your deduction
for these losses.

Tax Credits and
Payments
This discussion covers tax credits and payments for resident aliens, followed by a discussion of the credits and payments for nonresident aliens.

Resident Aliens
Resident aliens generally claim tax credits and
report tax payments, including withholding, using the same rules that apply to U.S. citizens.
The following items are some of the credits
you may be able to claim.
Foreign tax credit. You can claim a credit,
subject to certain limits, for income tax you paid
or accrued to a foreign country on foreign

source income. You cannot claim a credit for
taxes paid or accrued on excluded foreign
earned income. To claim a credit for income
taxes paid or accrued to a foreign country, you
will generally file Form 1116 with your Form
1040 or 1040-SR.
For more information, see Pub. 514.
Child and dependent care credit. You may
be able to take this credit if you pay someone to
care for your dependent qualifying child who is
under age 13, or your disabled dependent or
disabled spouse, so that you can work or look
for work.
For more information, see Form 2441 and
Pub. 503.
Credit for the elderly or the disabled. You
may qualify for this credit if you are age 65 or
older or if you retired on permanent and total
disability. For more information on this credit,
see Pub. 524 and Schedule R (Form 1040).
Education credits. You may qualify for these
credits if you paid qualified education expenses
for yourself, your spouse, or your dependent.
There are two education credits: the American
opportunity credit and the lifetime learning
credit. You cannot claim these credits if you are
married filing separately. Use Form 8863 to figure the credit. For more information, see Pub.
970.
Nonresident aliens, see Education credits
under Nonresident Aliens, later.
Retirement savings contributions credit.
You may qualify for this credit (also known as
the saver’s credit) if you made eligible contributions to an employer-sponsored retirement plan
or to an IRA in 2022. Use Form 8880 and its instructions to figure the credit. For more information about the requirements to claim the credit,
see Pub. 590-A.
Child tax credit and the additional child tax
credit. “Qualifying child,” for purposes of the
child tax credit and the additional child tax
credit, is a child who:
• Was under age 17 at the end of 2022;
• Is your son, daughter, stepchild, eligible
foster child, brother, sister, stepbrother,
stepsister, half brother, half sister, or a descendant of any of them (for example, your
grandchild, niece, or nephew);
• Is a U.S. citizen, U.S. national, or resident
alien;
• Did not provide over half of their own support for 2022;
• Lived with you more than half of 2022
(temporary absences, such as for school,
vacation, or medical care, count as time
lived in the home);
• Is claimed as a dependent on your return;
and
• Does not file a joint return for the year (or
files it only to claim a refund of withheld income tax or estimated tax paid).
An adopted child is always treated as your
own child. An adopted child includes a child
lawfully placed with you for legal adoption.
If you did not have an SSN (or ITIN) issued
on or before the due date of your 2022 return
(including extensions), you cannot claim the

child tax credit on either your original or an
amended 2022 return.
If your child did not have an SSN valid for
employment issued before the due date of the
2022 return (including extensions), you cannot
claim the child tax credit for this child but may
be able to claim the credit for other dependents
for this child. See Credit for other dependents,
discussed below.
Use Schedule 8812 (Form 1040) and its instructions to figure the credits.
Credit for other dependents. The credit for
other dependents is for people who have dependents who cannot be claimed for the child
tax credit. The qualifying dependent must be a
U.S. citizen, U.S. national, or U.S. resident alien
and must have an SSN, ITIN, or adoption taxpayer identification number (ATIN) issued on or
before the due date of your 2022 return (including extensions). See Schedule 8812 (Form
1040) and its instructions for more information.
Adoption credit. You may qualify to take a tax
credit of up to $14,890 for qualifying expenses
paid to adopt an eligible child. This amount may
be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. To claim the adoption credit,
file Form 8839 with your Form 1040 or
1040-SR.
Earned income credit (EIC). The EIC, or
earned income tax credit (EITC), is a benefit for
working people with low to moderate income.
To qualify for the EIC, you must have earned income from working for someone or from running or owning a business or farm and meet basic rules. Also, you must either meet additional
rules for workers without a qualifying child or
have a child who meets all the qualifying child
rules. The EIC reduces the amount of tax you
owe and may give you a refund. For more information, go to IRS.gov/EIC.
If you (and your spouse, if filing a joint return) did not have an SSN issued on or before
the due date of the 2022 return (including extensions), you cannot claim the EIC on either
your original or an amended 2022 return. Also,
if a child did not have an SSN issued on or before the due date of your return (including extensions), you cannot count that child as a qualifying child in figuring the EIC on either your
original or an amended 2022 return.
If a social security card has a legend
that says “Not Valid for Employment”
CAUTION and the number was issued so that you
(or your spouse or your qualifying child) could
receive a federally funded benefit, you cannot
claim the EIC. An example of a federally funded
benefit is Medicaid. If a card has this legend
and the individual's immigration status has
changed so that the individual is now a U.S. citizen or lawful permanent resident, ask the SSA
to issue a new social security card without the
legend.

!

To find out if you are eligible for the EIC, go
to IRS.gov/EITCAssistant.
Other information. There are other eligibility rules that are not discussed here. For more
information, see Pub. 596.

Nonresident Aliens
You can claim some of the same credits that
resident aliens can claim. You can also report
certain taxes you paid, are considered to have
paid, or that were withheld from your income.

Credits
Credits are allowed only if you receive effectively connected income. You may be able to
claim some of the following credits.
Foreign tax credit. If you receive foreign
source income that is effectively connected with
a trade or business in the United States, you
can claim a credit for any income taxes paid or
accrued to any foreign country or U.S. possession on that income.
If you do not have foreign source income effectively connected with a U.S. trade or business, you cannot claim credits against your
U.S. tax for taxes paid or accrued to a foreign
country or U.S. possession.
You cannot take any credit for taxes imposed by a foreign country or U.S. possession
on your U.S. source income if those taxes were
imposed only because you are a citizen or resident of the foreign country or possession.
If you claim a foreign tax credit, you will generally have to attach to your return a Form 1116.
See Pub. 514 for more information.
Child and dependent care credit. You may
qualify for this credit if you pay someone to care
for your dependent qualifying child who is under
age 13, or your disabled dependent or disabled
spouse, so that you can work or look for work.
For definitions of these terms, see Pub. 503.
Married nonresident aliens can claim the
credit only if they choose to file a joint return
with a U.S. citizen or resident spouse as discussed in How To Make the Choice in chapter 1, or if they qualify as certain married individuals living apart (see Joint Return Test in Pub.
503).
The amount of your child and dependent
care expense that qualifies for the credit in any
tax year cannot be more than your earned income from the United States for that tax year.
Earned income generally means wages, salaries, and professional fees for personal services
performed.
For more information, see Pub. 503.
Education credits. If you are a nonresident
alien for any part of the year, you generally cannot claim the education credits. However, you
may be able to claim an education credit under
the following circumstances.
1. You are married and choose to file a joint
return with a U.S. citizen or resident
spouse as discussed under Nonresident
Spouse Treated as a Resident in chapter 1.
2. You are a dual-status alien, and choose to
be treated as a U.S. resident for the entire
year. See Choosing Resident Alien Status
in chapter 1.

Chapter 5

Figuring Your Tax

Page 29

Additional information on the American opportunity tax credit is available at IRS.gov/
AOTC.
Retirement savings contributions credit.
You may qualify for this credit (also known as
the saver’s credit) if you made eligible contributions to an employer-sponsored retirement plan
or to an individual retirement arrangement (IRA)
in 2022. You cannot claim this credit if:
• You were born after January 1, 2005;
• You were a full-time student;
• You were claimed as a dependent on
someone else's 2022 tax return; or
• Your adjusted gross income is more than
$34,000.
Use Form 8880 to figure the credit. For more information, see Pub. 590-A.
Child tax credit and the additional child tax
credit. Only nonresident aliens who are U.S.
nationals; residents of Canada, Mexico, or
South Korea; or students and business apprentices from India who qualify for benefits under
Article 21(2) of the income tax treaty with India
can claim the child tax credit.
“Qualifying child,” for purposes of the child
tax credit and the additional child tax credit, is a
child who:
• Was under age 17 at the end of 2022;
• Is your son, daughter, stepchild, eligible
foster child, brother, sister, stepbrother,
stepsister, half brother, half sister, or a descendant of any of them (for example, your
grandchild, niece, or nephew);
• Is a U.S. citizen, U.S. national, or resident
alien;
• Did not provide over half of their own support for 2022;
• Lived with you more than half of 2022
(temporary absences, such as for school,
vacation, or medical care, count as time
lived in the home);
• Is claimed as a dependent on your return;
and
• Does not file a joint return for the year (or
files it only to claim a refund of withheld income tax or estimated tax paid).
An adopted child is always treated as your
own child. An adopted child includes a child
lawfully placed with you for legal adoption.
If you did not have an SSN (or ITIN) issued
on or before the due date of your 2022 return
(including extensions), you may not claim the
child tax credit on either your original or an
amended tax return.
If your child did not have an SSN valid for
employment issued before the due date of the
2022 return (including extensions), you cannot
claim the child tax credit for this child but may
be able to claim the credit for other dependents
for this child. See Credit for other dependents,
discussed below.
Use Schedule 8812 (Form 1040) and its instructions to figure the credits.
Credit for other dependents. Dependents
who cannot be claimed for the child tax credit
may still qualify you for the credit for other dependents. This is a nonrefundable tax credit of
$500 per qualifying person. The qualifying dependent must be a U.S. citizen, U.S. national,
or U.S. resident alien. See the Instructions for
Page 30

Chapter 5

Figuring Your Tax

Form 1040-NR. To claim the credit for other dependents, your dependent must have an SSN,
ITIN, or ATIN issued on or before the due date
of your 2022 return (including extensions).
Only nonresident aliens who are U.S.
nationals; residents of Canada, MexCAUTION ico, or South Korea; or students and
business apprentices from India who qualify for
benefits under Article 21(2) of the income tax
treaty with India can claim the credit for other
dependents.

!

Adoption credit. You may qualify to take a tax
credit of up to $14,890 for qualifying expenses
paid to adopt an eligible child. This amount may
be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. To claim the adoption credit,
file Form 8839 with your Form 1040-NR.
Married nonresident aliens can claim the
credit only if they choose to file a joint return
with a citizen or resident spouse, as discussed
in Nonresident Spouse Treated as a Resident
in chapter 1, or if they qualify as certain married
individuals living apart (see Married Persons
Not Filing Jointly in the Form 8839 instructions).
Credit for prior-year alternative minimum
tax. If you paid alternative minimum tax in a
prior year, get Form 8801 to see if you qualify
for this credit.
Earned income credit (EIC). If you are a nonresident alien for any part of the tax year, you
generally cannot claim the EIC. However, if you
are married and choose to file a joint return with
a U.S. citizen or resident spouse, as discussed
in Nonresident Spouse Treated as a Resident
in chapter 1, you may be eligible for the credit.
If you and your spouse did not have an SSN
issued on or before the due date of the 2022 return (including extensions), you cannot claim
the EIC on either your original or an amended
2022 return. Also, if a child did not have an SSN
issued on or before the due date of your return
(including extensions), you cannot count that
child as a qualifying child in figuring the EIC on
either your original or an amended 2022 return.
If a social security card has a legend
that says “Not Valid for Employment”
CAUTION and the number was issued so that you
(or your spouse or your qualifying child) could
receive a federally funded benefit, you cannot
claim the EIC. An example of a federally funded
benefit is Medicaid. If a card has this legend
and the individual's immigration status has
changed so that the individual is now a U.S. citizen or lawful permanent resident, ask the SSA
to issue a new social security card without the
legend.

!

See Pub. 596 for more information on the
credit.

Tax Withheld
You can claim the tax withheld during the year
as a payment against your U.S. tax. You claim it
on lines 25a through 25g of Form 1040-NR. The
tax withheld reduces any tax you owe with Form
1040-NR.

Withholding from wages. Any federal income
tax withheld from your wages during the tax
year while you were a nonresident alien is allowed as a payment against your U.S. income
tax liability for the same year. You can claim the
income tax withheld whether or not you were
engaged in a trade or business in the United
States during the year, and whether or not the
wages (or any other income) were connected
with a trade or business in the United States.
Excess social security tax withheld. If you
have two or more employers, you may be able
to claim a credit against your U.S. income tax liability for social security tax withheld in excess
of the maximum required. See Social Security
and Medicare Taxes in chapter 8 for more information.
Additional Medicare Tax. Your employer is
responsible for withholding the 0.9% (0.009)
Additional Medicare Tax on Medicare wages or
Railroad Retirement Tax Act (RRTA) compensation it pays to you in excess of $200,000 in
2022. If you do not owe Additional Medicare
Tax, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959.
Tax paid on undistributed long-term capital
gains. If you are a shareholder in a mutual fund
(or other RIC) or REIT, you can claim a credit
for your share of any taxes paid by the company
on its undistributed long-term capital gains. You
will receive information on Form 2439, which
you must attach to your return.
Tax withheld at the source. You can claim as
a payment any tax withheld at the source on investment and other fixed or determinable annual or periodic income paid to you. Fixed or
determinable income includes interest, dividend, rental, and royalty income that you do not
claim to be effectively connected income. Wage
or salary payments can be fixed or determinable income to you, but are usually subject to
withholding as discussed above. Taxes on fixed
or determinable income are withheld at a 30%
rate or at a lower treaty rate.
Tax withheld on partnership income. If you
are a foreign partner in a partnership, the partnership will withhold tax on your share of effectively connected taxable income from the partnership. The partnership will give you a
statement on Form 8805 showing the tax withheld. A partnership that is publicly traded may
withhold on your actual distributions of effectively connected income. In this case, the partnership will give you a statement on Form
1042-S. Claim the tax withheld as a payment on
line 25e or 25g of Form 1040-NR, as appropriate.
Tax withheld on gain from the sale or exchange of certain partnership interests. If
you are a direct or indirect foreign partner in a
U.S. or foreign partnership that is engaged (or
is treated as engaged) in a trade or business
within the United States and you directly or indirectly dispose of that interest for a gain, then for
transfers occurring after 2017, the transferee
will generally withhold and pay into the IRS on
your behalf a tax equal to 10% of the amount

realized on the sale. The rules for withholding
and paying over this amount are similar to sales
of U.S. real property interests. You will receive a
Form 8288-A reflecting the amount withheld
that you may then claim on line 25f of your Form
1040-NR as a credit against the tax you owe on
the gain. You may be able to provide certain information to the transferee to reduce or eliminate withholding. For example, if a nonrecognition provision of the Internal Revenue Code
applies to all of the gain realized on a transfer,
the transferee does not need to withhold if you
provide a notice describing the application of a
nonrecognition provision. If you are a transferee
that failed to withhold, under section 1446(f)(4)
the partnership may withhold on distributions to
you.
On November 30, 2020, final regulations under section 1446(f) were issued which are generally applicable to transfers of non-PTP interests that occur on or after January 29, 2021.
Notice 2018-29 applies to transfers of non-PTP
interests that occurred before the applicability
date of the final regulations, or, under certain
circumstances, taxpayers may apply the proposed regulations to transfers of non-PTP interests during this time. The requirements for
transfers of PTP interests and withholding under section 1446(f)(4) are suspended for transfers occurring before January 1, 2022. For more
information, see Pub. 515.
For more information, see Treasury Decision 9926 on page 1602 of I.R.B. 2020-51,
available
at
IRS.gov/irb/
2020-51_IRB#TD-9926. Also, see the final regulations as published in the Federal Register at
govinfo.gov/content/pkg/FR-2020-11-30/pdf/
2020-22619.pdf.
Tax withheld on dispositions of U.S. real
property interests. You can claim as a payment any tax withheld with respect to a disposition of a U.S. real property interest (or income
treated as derived from the disposition of a U.S.
real property interest). See Real Property Gain
or Loss in chapter 4. The buyer will give you a
statement of the amount withheld on Form
8288-A. Claim the tax withheld as a payment on
line 25f of Form 1040-NR.
Claiming tax withheld on your return. When
you fill out your tax return, take extra care to enter the correct amount of any tax withheld
shown on your information documents. The following table lists some of the more common information documents and shows where to find
the amount of tax withheld.

Form number

Location
of tax
withheld

RRB-1042S . . . . . . . . . . . . . . . . . . .
SSA-1042S . . . . . . . . . . . . . . . . . . . .
W-2 . . . . . . . . . . . . . . . . . . . . . . . . .
W-2c . . . . . . . . . . . . . . . . . . . . . . . .
1042-S . . . . . . . . . . . . . . . . . . . . . . .
8805 . . . . . . . . . . . . . . . . . . . . . . . .
8288-A . . . . . . . . . . . . . . . . . . . . . . .

Box 13
Box 9
Box 2
Box 2
Box 10
Line 10
Box 2

Bona Fide Residents
of American Samoa
or Puerto Rico
If you are a nonresident alien who is a bona fide
resident of American Samoa or Puerto Rico for
the entire tax year, you are generally taxed the
same as resident aliens. You should file Form
1040 or 1040-SR and report all income from
sources both in and outside the United States.
However, you can exclude the income discussed in the following paragraphs.
For tax purposes other than reporting income, however, you will be treated as a nonresident alien. For example, you are not allowed
the standard deduction, you cannot file a joint
return, and you cannot claim a dependent unless that person is a citizen or national of the
United States. There are also limits on what deductions and credits are allowed. See Nonresident Aliens under Deductions, Itemized Deductions, and Tax Credits and Payments in this
chapter.
Residents of Puerto Rico. If you are a bona
fide resident of Puerto Rico for the entire year,
you can exclude from gross income all income
from sources in Puerto Rico (other than
amounts for services performed as an employee of the United States or any of its agencies).
If you report income on a calendar year basis and you do not have wages subject to withholding for 2022, file your return and pay your
tax by June 15, 2023. You must also make your
first payment of estimated tax for 2023 by June
15, 2023. You cannot file a joint income tax return or make joint payments of estimated tax.
However, if you are married to a U.S. citizen or
resident, see Nonresident Spouse Treated as a
Resident in chapter 1.
If you earn wages subject to withholding,
your U.S. income tax return is due by April 18,
2023. You must also make your first payment of
estimated tax for 2023 by April 18, 2023. For information on withholding and estimated tax, see
chapter 8.
Residents of American Samoa. If you are a
bona fide resident of American Samoa for the
entire year, you can exclude from gross income
all income from sources in American Samoa
(other than amounts for services performed as
an employee of the U.S. Government or any of
its agencies). An employee of the American Samoan Government is not considered an employee of the U.S. Government or any of its
agencies for purposes of the exclusion. For
more information about this exclusion, see
Form 4563 and Pub. 570.

6.
Dual-Status Tax
Year
Introduction
You have a dual-status tax year when you have
been both a resident alien and a nonresident
alien in the same year. Dual status does not refer to your citizenship; it refers only to your resident status in the United States. In determining
your U.S. income tax liability for a dual-status
tax year, different rules apply for the part of the
year you are a resident of the United States and
the part of the year you are a nonresident.
The most common dual-status tax years are
the years of arrival and departure. See
Dual-Status Aliens in chapter 1.
If you are married and choose to be a nonresident spouse treated as a resident, as explained in chapter 1, the rules of this chapter do
not apply to you for that year.

Topics

This chapter discusses:

•
•
•
•
•
•

Income subject to tax,
Restrictions for dual-status taxpayers,
How to figure the tax,
Forms to file,
When and where to file, and
How to fill out a dual-status return.

Useful Items

You may want to see:
Publication
503 Child and Dependent Care Expenses
503

514 Foreign Tax Credit for Individuals
514

575 Pension and Annuity Income
575

Form (and Instructions)
1040 U.S. Individual Income Tax Return
1040

1040-SR U.S. Tax Return for Seniors
1040-SR

1040-C U.S. Departing Alien Income Tax
Return
1040-C

1040-ES Estimated Tax for Individuals
1040-ES

1040-ES (NR) U.S. Estimated Tax for
Nonresident Alien Individuals
1040-ES (NR)

1040-NR U.S. Nonresident Alien Income
Tax Return
1040-NR

1116 Foreign Tax Credit
1116

See chapter 12 for information about getting
these publications and forms.

Tax Year
You must file your tax return on the basis of an
annual accounting period called a tax year. If
Chapter 6

Dual-Status Tax Year

Page 31

you have not previously established a fiscal tax
year, your tax year is the calendar year. A calendar year is 12 consecutive months ending on
December 31. If you have previously established a regular fiscal year (12 consecutive
months ending on the last day of a month other
than December, or a 52-53 week year) and are
considered to be a U.S. resident for any calendar year, you will be treated as a U.S. resident
for any part of your fiscal year that falls within
that calendar year.

Income Subject to Tax
For the part of the year you are a resident alien,
you are taxed on income from all sources. Income from sources outside the United States is
taxable if you receive it while you are a resident
alien. The income is taxable even if you earned
it while you were a nonresident alien or if you
became a nonresident alien after receiving it
and before the end of the year.
For the part of the year you are a nonresident alien, you are taxed on income from U.S.
sources and on certain foreign source income
treated as effectively connected with a U.S.
trade or business. The rules for treating foreign
source income as effectively connected are discussed in chapter 4 under Foreign Income.
Income from sources outside the United
States that is not effectively connected with a
trade or business in the United States is not taxable if you receive it while you are a nonresident
alien. The income is not taxable even if you
earned it while you were a resident alien or if
you became a resident alien or a U.S. citizen after receiving it and before the end of the year.
Income from U.S. sources is taxable
whether you receive it while a nonresident alien
or a resident alien unless specifically exempt
under the Internal Revenue Code or a tax treaty
provision. Generally, tax treaty provisions apply
only to the part of the year you were a nonresident. In certain cases, however, treaty provisions may apply while you were a resident
alien. See chapter 9 for more information.
When determining what income is taxed in
the United States, you must consider exemptions under U.S. tax law as well as the reduced
tax rates and exemptions provided by tax treaties between the United States and certain foreign countries. For a further discussion of tax
treaties, see chapter 9.

Restrictions for
Dual-Status Taxpayers
The following restrictions apply if you are filing a
tax return for a dual-status tax year.
Standard deduction. You cannot use the
standard deduction allowed on Form 1040 or
1040-SR. However, you can itemize any allowable deductions.
Head of household. You cannot use the head
of household Tax Table column or Tax Computation Worksheet.
Page 32

Chapter 6

Dual-Status Tax Year

Joint return. You cannot file a joint return.
However, see Choosing Resident Alien Status
under Dual-Status Aliens in chapter 1.
Tax rates. If you are married and a nonresident of the United States for all or part of the tax
year and you do not choose to file jointly as discussed in chapter 1, you must use the Tax Table column or Tax Computation Worksheet for
married filing separately to figure your tax on income effectively connected with a U.S. trade or
business. You cannot use the Tax Table column or Tax Computation Worksheet for married
filing jointly or single. However, you may be
able to file as single if you lived apart from your
spouse during the last 6 months of the year and
you are a:
• Married resident of Canada, Mexico, or
South Korea; or
• Married U.S. national.
See the Instructions for Form 1040-NR to see if
you qualify.
A U.S. national is an individual who, although not a U.S. citizen, owes their allegiance
to the United States. U.S. nationals include
American Samoans and Northern Mariana Islanders who chose to become U.S. nationals instead of U.S. citizens.
Tax credits. You cannot claim the education
credits, EIC, or credit for the elderly or the disabled unless:
• You are married; and
• You choose to be a nonresident spouse
treated as a resident for all of 2022 by filing
a joint return with your spouse who is a
U.S. citizen or resident, as discussed in
chapter 1.

Dependents
As a dual-status taxpayer, you may be able to
claim a dependent on your tax return. In general, a dependent is a qualifying child or a qualifying relative. You may be entitled to claim additional deductions and credits if you have a
qualifying dependent. See the Instructions for
Form 1040 or the Instructions for Form
1040-NR for more information.

United States for your period of nonresidence is
subject to the flat 30% rate or lower treaty rate.
You cannot take any deductions against this income.
Social security and railroad retirement benefits. During the part of the year you are a nonresident alien, 85% of any U.S. social security
benefits (and the equivalent part of tier 1 railroad retirement benefits) you receive is subject
to the flat 30% tax, unless exempt, or subject to
a lower treaty rate. (See The 30% Tax in chapter 4.)
During the part of the year you are a resident
alien, part of the social security and the equivalent part of tier 1 railroad retirement benefits will
be taxed at graduated rates if your modified adjusted gross income plus half of these benefits
are more than a certain base amount.
Use the Social Security Benefits Worksheet
in the Instructions for Form 1040 to help you figure the taxable part of your social security and
equivalent tier 1 railroad retirement benefits for
the part of the year you were a resident alien.
If you received U.S. social security benefits
while you were a nonresident alien, the SSA will
send you Form SSA-1042S showing your combined benefits for the entire year and the
amount of tax withheld. You will not receive
separate statements for the benefits received
during your periods of U.S. residence and nonresidence. Therefore, it is important for you to
keep careful records of these amounts. You will
need this information to properly complete your
return and figure your tax liability.
If you received railroad retirement benefits
while you were a nonresident alien, the U.S.
Railroad Retirement Board (RRB) will send you
Form RRB-1042S, Statement for Nonresident
Alien Recipients of Payments by the Railroad
Retirement Board, and/or Form RRB-1099-R,
Annuities or Pensions by the Railroad Retirement Board. If your country of legal residence
changed or your rate of tax changed during the
tax year, you may receive more than one form.

Tax Credits and Payments

If you were a U.S. national or a resident of
Canada or Mexico, you can claim a dependent
on the same terms as U.S. citizens. If you are a
resident of South Korea or India, see chapter 5.

This discussion covers tax credits and payments for dual-status aliens.

How To Figure Your Tax

As a dual-status alien, you can generally claim
tax credits using the same rules that apply to
resident aliens. There are certain restrictions
that may apply. These restrictions are discussed here, along with a brief explanation of
credits often claimed by individuals.

When you figure your U.S. tax for a dual-status
year, you are subject to different rules for the
part of the year you are a resident and the part
of the year you are a nonresident.

Income
All income for your period of residence and all
income that is effectively connected with a trade
or business in the United States for your period
of nonresidence, after allowable deductions,
are added and taxed at the rates that apply to
U.S. citizens and residents. Income that is not
connected with a trade or business in the

Credits

You cannot claim the education credits, EIC, or credit for the elderly or the
CAUTION disabled unless you are married and
you choose to be treated as a resident for all of
2022 by filing a joint return with your spouse
who is a U.S. citizen or resident, as discussed
in chapter 1.

!

Foreign tax credit. If you have paid, or are liable for the payment of, income tax to a foreign
country on income from foreign sources, you

may be able to claim a credit for the foreign
taxes.
If you claim the foreign tax credit, you must
generally file Form 1116 with your income tax
return. For more information, see the Instructions for Form 1116 and Pub. 514.
Child and dependent care credit. You may
qualify for this credit if you pay someone to care
for your dependent qualifying child who is under
age 13, or your disabled dependent or disabled
spouse, so that you can work or look for work.
Married dual-status aliens can claim the
credit only if they choose to file a joint return as
discussed in chapter 1, or if they qualify as certain married individuals living apart.
The amount of your child and dependent
care expense that qualifies for the credit in any
tax year cannot be more than your earned income for that tax year.
For more information, see Pub. 503 and
Form 2441.
Retirement savings contributions credit.
You may qualify for this credit (also known as
the saver’s credit) if you made eligible contributions to an employer-sponsored retirement plan
or to an IRA in 2022. You cannot claim this
credit if:
• You were born after January 1, 2005,
• You were a full-time student,
• You were claimed as a dependent on
someone else's 2022 tax return, or
• Your adjusted gross income is more than
$34,000.
Use Form 8880 to figure the credit. For more information, see Pub. 590-A.
Child tax credit and the additional child tax
credit. “Qualifying child,” for purposes of the
child tax credit and the additional child tax
credit, is a child who:
• Was under age 17 at the end of 2022;
• Is your son, daughter, stepchild, eligible
foster child, brother, sister, stepbrother,
stepsister, half brother, half sister, or a descendant of any of them (for example, your
grandchild, niece, or nephew);
• Is a U.S. citizen, U.S. national, or resident
alien;
• Did not provide over half of their own support for 2022;
• Lived with you more than half of 2022
(temporary absences, such as for school,
vacation, or medical care, count as time
lived in the home);
• Is claimed as a dependent on your return;
and
• Does not file a joint return for the year (or
files it only to claim a refund of withheld income tax or estimated tax paid).
An adopted child is always treated as your
own child. An adopted child includes a child
lawfully placed with you for legal adoption.
If you did not have an SSN (or ITIN) issued
on or before the due date of your 2022 return
(including extensions), you may not claim the
child tax credit on either your original or an
amended 2022 return.
If your child did not have an SSN valid for
employment issued before the due date of the
2022 return (including extensions), you cannot
claim the child tax credit for this child but may

be able to claim the credit for other dependents
for this child. See Credit for other dependents,
discussed below.
Use Schedule 8812 (Form 1040) and its instructions to figure the credits.
Credit for other dependents. The credit for
other dependents is for people who have dependents who cannot be claimed for the child
tax credit. The qualifying dependent must be a
U.S. citizen, U.S. national, or U.S. resident alien
and must have an SSN, ITIN, or ATIN issued on
or before the due date of your 2022 return (including extensions).
Adoption credit. You may qualify to take a tax
credit of up to $14,890 for qualifying expenses
paid to adopt an eligible child. This amount may
be allowed for the adoption of a child with special needs regardless of whether you have qualifying expenses. To claim the adoption credit,
file Form 8839 with the U.S. income tax return
that you file.
Married dual-status aliens can claim the
credit only if they choose the Nonresident
Spouse Treated as a Resident status as discussed in chapter 1, or if they qualify as certain
married individuals living apart (see Married
Persons Not Filing Jointly in the Form 8839 instructions).

Payments
You can report as payments against your U.S.
income tax liability certain taxes you paid, are
considered to have paid, or that were withheld
from your income. These include:
• Tax withheld from wages earned in the
United States,
• Taxes withheld at the source from various
items of income from U.S. sources other
than wages,
• Estimated tax paid with Form 1040-ES or
Form 1040-ES (NR), and
• Tax paid with Form 1040-C at the time of
departure from the United States.

Forms To File
The U.S. income tax return you must file as a
dual-status alien depends on whether you are a
resident alien or a nonresident alien at the end
of the tax year.
Resident at end of year. You must file Form
1040 or 1040-SR if you are a dual-status taxpayer who becomes a resident during the year
and who is a U.S. resident on the last day of the
tax year. Enter “Dual-Status Return” across the
top of the return. Attach a statement to your return to show the income for the part of the year
you are a nonresident. You can use Form
1040-NR as the statement, but be sure to enter
“Dual-Status Statement” across the top.

for the part of the year you are a resident. You
can use Form 1040 or 1040-SR as the statement, but be sure to enter “Dual-Status Statement” across the top.
If you expatriated or terminated your residency in 2022, you may be required to file an
expatriation statement (Form 8854) with your
tax return. For more information, see Expatriation Tax in chapter 4.
Statement. Any statement must have your
name, address, and TIN on it. You do not need
to sign a separate statement or schedule accompanying your return because your signature
on the return also applies to the supporting
statements and schedules.

When and Where To File
If you are a resident alien on the last day of your
tax year and report your income on a calendar
year basis, you must file no later than April 15 of
the year following the close of your tax year (but
see the TIP, later). If you report your income on
other than a calendar year basis, file your return
no later than the 15th day of the 4th month following the close of your tax year. In either case,
file your return with the address for dual-status
aliens shown on the back of the Instructions for
Forms 1040 and 1040-SR.
If you are a nonresident alien on the last day
of your tax year and you report your income on
a calendar year basis, you must file no later
than April 15 of the year following the close of
your tax year if you receive wages subject to
withholding. If you report your income on other
than a calendar year basis, file your return no
later than the 15th day of the 4th month following the close of your tax year. If you did not receive wages subject to withholding and you report your income on a calendar year basis, you
must file no later than June 15 of the year following the close of your tax year. If you report
your income on other than a calendar year basis, file your return no later than the 15th day of
the 6th month following the close of your tax
year. In any case, mail your return to:
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
If enclosing a payment, mail your return to:
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
If the regular due date for filing falls on

TIP a Saturday, Sunday, or legal holiday,

the due date is the next day that is not
a Saturday, Sunday, or legal holiday.

Nonresident at end of year. You must file
Form 1040-NR if you are a dual-status taxpayer
who gives up residence in the United States
during the year and who is not a U.S. resident
on the last day of the tax year. Enter “Dual-Status Return” across the top of the return. Attach
a statement to your return to show the income
Chapter 6

Dual-Status Tax Year

Page 33

7.
Filing
Information
Introduction
This chapter provides the basic filing information that you may need.

Topics

This chapter discusses:

•
•
•
•

Forms aliens must file,
When and where to file,
Penalties, and
Amended returns and claims for refund.

Useful Items

You may want to see:
Forms (and Instructions)
1040 U.S. Individual Income Tax Return
1040-SR U.S. Tax Return for Seniors
1040-NR U.S. Nonresident Alien Income
Tax Return
1040

1040-SR

1040-NR

See chapter 12 for information about getting
these forms.

What, When, and Where
To File
What return you must file, as well as when and
where you file that return, depend on your status at the end of the tax year as a resident or a
nonresident alien.

Resident Aliens
Resident aliens should file Form 1040 or
1040-SR at the address shown in the Instructions for Form 1040. The due date for filing your
return and paying any tax due is April 15 of the
year following the year for which you are filing a
return (but see the TIP, earlier).
Under U.S. immigration law, a lawful permanent resident who is required to file a tax return
as a resident and fails to do so may be regarded as having abandoned status and may lose
permanent resident status.

You are allowed an automatic extension to
file until June 15 if your main place of business
and the home you live in are outside the United
States and Puerto Rico on April 15. If you need
more time by the end of the 2-month period,
you can get an additional 4 months until October 15 if, no later than June 15, you file Form
4868.
In addition to the 6-month extension, taxpayers who are out of the country (as defined in the
Instructions for Form 4868) can request a discretionary 2-month additional extension of time
to file their returns (December 15 for calendar
year taxpayers). To request this extension, you
must send the IRS a letter explaining the reasons why you need the additional 2 months.
Send the letter by the extended due date (October 15 for calendar year taxpayers) to the following address.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
You will not receive any notification from the
IRS unless your request is denied for being untimely.
The discretionary 2-month additional extension is not available to taxpayers who have an
approved extension of time to file on Form 2350
(for U.S. citizens and resident aliens abroad
who expect to qualify for special tax treatment).
If the due date for filing falls on a Satur-

TIP day, Sunday, or legal holiday, the due

date is the next day that is not a Saturday, Sunday, or legal holiday.
You may be able to file
your return electronically.
Go to IRS.gov/Efile for more information.

Nonresident Aliens
Nonresident aliens who are required to file an
income tax return should use Form 1040-NR.
If you are any of the following, you must file
a return.
1. A nonresident alien individual engaged or
considered to be engaged in a trade or
business in the United States during 2022.
(But see Exceptions, later.)
You must file even if:
a. Your income did not come from a
trade or business conducted in the
United States,
b. You have no income from U.S. sources, or
c. Your income is exempt from income
tax.

Extensions of time to file. You can get an automatic 6-month extension (October 15 for calendar year taxpayers) if, no later than the date
your return is due, you file Form 4868. For more
information, see Form 4868.

2. A nonresident alien individual not engaged
in a trade or business in the United States
with U.S. income on which the tax liability
was not satisfied by the withholding of tax
at the source.

An automatic 6-month extension to file
does not extend the time to pay your
CAUTION tax. If you do not pay your tax by the
original due date of your return, you will owe interest on the unpaid tax and may owe penalties.

3. A representative or agent responsible for
filing the return of an individual described
in (1) or (2).

!

Page 34

Chapter 7

Filing Information

4. A fiduciary for a nonresident alien estate
or trust.

You must also file if you want to:

• Claim a refund of overwithheld or overpaid
tax, or

• Claim the benefit of any deductions or

credits. For example, if you have no U.S.
business activities but have income from
real property that you choose to treat as effectively connected income (discussed in
chapter 4), you must timely file a true and
accurate return to take any allowable deductions against that income. For information on what is timely, see When to file for
deductions and credits under When To
File, later.

Exceptions. You do not need to file Form
1040-NR if you meet any of the following conditions.
The exception that previously allowed
nonresident aliens whose only U.S.
CAUTION trade or business was the performance
of personal services and whose wage income
did not exceed the personal exemption amount
to not file a Form 1040-NR is no longer available. You must meet (1), (2), or (3) below to be
exempt from filing a 2022 Form 1040-NR.

!

1. You were a nonresident alien student,
teacher, or trainee who was temporarily
present in the United States under an “F,”
“J,” “M,” or “Q” visa, and you have no income that is subject to tax, such as wages, tips, scholarship and fellowship
grants, dividends, etc.
2. You were a student or business apprentice who was eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are single or a
qualifying surviving spouse, and your
gross income for 2022 was less than or
equal to $12,950 if single ($25,900 if a
qualifying surviving spouse).
3. You were a partner in a U.S. partnership
that was not engaged in a trade or business in the United States during 2022 and
your Schedule K-1 (Form 1065) includes
only income from U.S. sources that is not
effectively connected with a U.S. trade or
business.
Even if you have left the United States
and filed a Form 1040-C on departure,
CAUTION you must still file an annual U.S. income tax return. If you are married and both you
and your spouse are required to file, you must
each file a separate return.

!

Foreign‐owned domestic disregarded entities. If a foreign person wholly owns a domestic disregarded entity (DE), the domestic DE is
treated as a domestic corporation separate
from its owner (the foreign person) for the limited purposes of the requirements under section
6038A that apply to 25% foreign‐owned domestic corporations. The foreign-owned domestic
DE must file a pro forma Form 1120 with Form
5472 attached by the due date (including extensions) of the return. The only information required to be completed on Form 1120 is the
name and address of the foreign-owned domestic DE and items B and E on the first part. A
foreign-owned domestic DE may have had a reporting requirement before 2017 if it had a U.S.

trade or business or other activity that otherwise
required reporting. See the Instructions for
Form 5472 for additional information and coordination with Form 5472 filing by the domestic
DE. Also note that because the domestic DE is
generally a transparent entity, the foreign person will include (or continue to include) on Form
1040-NR any of the domestic DE's tax items
that are subject to reporting. A DE (foreign or
domestic) may also have a separate reporting
requirement related to employment or excise
taxes. See Regulations sections 301.7701-2(c)
(2)(iv) and (v).

When To File
If you are an employee and you receive wages
subject to U.S. income tax withholding, you will
generally file by the 15th day of the 4th month
after your tax year ends. For the 2022 calendar
year, file your return by April 18, 2023.
If you are not an employee who receives
wages subject to U.S. income tax withholding,
you must file by the 15th day of the 6th month
after your tax year ends. For the 2022 calendar
year, file your return by June 15, 2023.
Extensions of time to file. If you cannot file
your return by the due date, file Form 4868 or
use one of the electronic filing options explained in the Instructions for Form 4868. For
the 2022 calendar year, this will extend the due
date to October 16, 2023. If your regular due
date is June 15, 2023, this will extend the due
date to December 15, 2023. You must file the
extension by the regular due date of your return.
An automatic 6-month extension to file
does not extend the time to pay your
CAUTION tax. If you do not pay your tax by the
original due date of your return, you will owe interest on the unpaid tax and may owe penalties.
See Form 4868.

!

When to file for deductions and credits. To
get the benefit of any allowable deductions or
credits, you must timely file a true and accurate
return. For this purpose, a return is timely if it is
filed within 16 months of the due date just discussed. However, if you did not file a 2021 tax
return and 2022 is not the first year for which
you are required to file one, your 2022 return is
timely for this purpose if it is filed by the earlier
of:
• The date that is 16 months after the due
date for filing your 2022 return, or
• The date the IRS notifies you that your
2022 return has not been filed and that you
cannot claim certain deductions and credits.
The allowance of the following credits is not affected by this time requirement.
• Credit for withheld taxes.
• Credit for excise tax on certain uses of
gasoline and special fuels.
• Credit for tax paid by a mutual fund (or
other RIC) or a REIT on undistributed
long-term capital gains.
Protective return. If your activities in the
United States were limited and you do not believe that you had any gross income effectively
connected with a U.S. trade or business during

the year, you can file a protective return (Form
1040-NR) by the deadline explained above. By
filing a protective return, you protect your right
to receive the benefit of deductions and credits
in the event it is later determined that some or
all of your income is effectively connected. You
are not required to report any effectively connected income or any deductions on the protective return, but you must give the reason the return is being filed.
If you believe some of your activities resulted in effectively connected income, file your return reporting that income and related deductions by the regular due date. To protect your
right to claim deductions or credits resulting
from other activities, attach a statement to that
return explaining that you wish to protect your
right to claim deductions and credits if it is later
determined that the other activities produced effectively connected income.
You can follow the same procedure if you
believe you have no U.S. tax liability because of
a U.S. tax treaty. Be sure to also complete item
L on Schedule OI (Form 1040-NR).
Waiver of filing deadline. The IRS may
waive the filing deadline if you establish that,
based on the facts and circumstances, you acted reasonably and in good faith in failing to file
a U.S. income tax return (including a protective
return) and you cooperate with the IRS in determining your U.S. income tax liability for the tax
year for which you did not file a return.

Where To File
If you are not enclosing a payment, file
Form 1040-NR at the following address.
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215

If enclosing a payment, mail your return to:
Internal Revenue Service
P.O. Box 1303
Charlotte, NC 28201-1303
Aliens from the U.S. Virgin Islands. Report
all income from U.S. sources, as well as income
from other sources, on your return. For information on filing U.S. Virgin Islands returns, contact
the U.S. Virgin Islands Bureau of Internal Revenue.
If you are a bona fide resident of the
U.S. Virgin Islands during your entire
tax year and work temporarily in the
United States, you must pay your income taxes
to the U.S. Virgin Islands and file your income
tax returns at the following address.
Virgin Islands Bureau of Internal Revenue
6115 Estate Smith Bay
Suite 225
St. Thomas, VI 00802

Aliens from Guam or the Commonwealth of
the Northern Mariana Islands (CNMI). If you
are a bona fide resident of Guam or the CNMI
during your entire tax year, you must file your
return with, and pay any tax due to, Guam or
the CNMI. Report all income, including income
from U.S. sources, on your return. It is not necessary to file a separate U.S. income tax return.
Bona fide residents of Guam should file
their Guam returns at the following address.
Department of Revenue and Taxation
Government of Guam
P.O. Box 23607
Barrigada, GU 96921
Bona fide residents of the CNMI should
file their CNMI income tax returns at
the following address.
Department of Finance
Division of Revenue and Taxation
Commonwealth of the Northern Mariana
Islands
P.O. Box 5234 CHRB
Saipan, MP 96950
If you are not a bona fide resident of Guam
or the CNMI, see Pub. 570 for information on
where to file your return.

Amended Returns and
Claims for Refund
If you find changes in your income, deductions,
or credits after you mail your return, file Form
1040-X. Also use Form 1040-X if you should
have filed Form 1040 or 1040-SR instead of
Form 1040-NR, or vice versa.
If you amend Form 1040-NR or file the correct return, enter “Amended” across the top,
and attach the corrected return (Form 1040,
1040-SR, or 1040-NR) to Form 1040-X. Ordinarily, an amended return claiming a refund must
be filed within 3 years from the date your return
was filed or within 2 years from the time the tax
was paid, whichever is later. A return filed before the final due date is considered to have
been filed on the due date.
Note. You can now file Form 1040-X electronically with tax filing software to amend 2019
or later Forms 1040 and 1040-SR, and 2021 or
later Forms 1040-NR. For more information,
see IRS.gov/Form1040X.

Other Forms You May Have
To File
You may be required to file information returns
to report certain foreign income or assets, or
monetary transactions.

Chapter 8 discusses withholding from U.S. wages of residents of the U.S. Virgin Islands.

Chapter 7

Filing Information

Page 35

FinCEN Form 105, Report of
International Transportation of
Currency or Monetary Instruments
(CMIR)

You may have to pay penalties if you are required to file Form 8938 and fail to do so, or if
you have an understatement of tax due to any
transaction involving an undisclosed foreign financial asset.

FinCEN Form 105 is required by 31 U.S.C.
5316 and Treasury Department regulations (31
CFR, chapter X).

More information about filing Form 8938 can
be found in the Instructions for Form 8938.

The following persons must file FinCEN
Form 105.

Penalties

1. Each person who physically transports,
mails, or ships, or causes to be physically
transported, mailed, or shipped, currency
or other monetary instruments totaling
more than $10,000 at one time from the
United States to any place outside the United States or into the United States from
any place outside the United States.
2. Each person who receives in the United
States currency or other monetary instruments totaling more than $10,000 at one
time from any place outside the United
States.
A transfer of funds through normal banking procedures, which does not involve the physical
transportation of currency or monetary instruments, is not required to be reported.
Penalties. Civil and criminal penalties are provided for failing to file a report, filing a report
containing material omissions or misstatements, or filing a false or fraudulent report. Also,
the entire amount of the currency or monetary
instrument may be subject to seizure and forfeiture.
More information. The form is available at
FINCEN.gov/resources/filing-information. For
more information about BSA E-Filing, see the
E-Filing Section at BSAefiling.fincen.treas.gov/
main.html.

Form 8938
You may have to file Form 8938 to report the
ownership of a specified foreign financial asset(s) if you are one of the following individuals.
• A resident alien of the United States for
any part of the tax year.
• A nonresident alien who makes an election
to be treated as a resident for purposes of
filing a joint income tax return. See chapter 1 for information about this election.
• A nonresident alien who is a bona fide resident of American Samoa or Puerto Rico.
See Pub. 570 for a definition of bona fide
resident.
You must file Form 8938 if the total value of
those assets exceeds an applicable threshold
(the “reporting threshold”). The reporting
threshold varies depending on whether you live
in the United States, are married, or file a joint
income tax return with your spouse. Specified
foreign financial assets include any financial account maintained by a foreign financial institution and, to the extent held for investment, any
stock, securities, or any other interest in a foreign entity and any financial instrument or contract with an issuer or counterparty that is not a
U.S. person.
Page 36

Chapter 7

Filing Information

The law provides penalties for failure to file returns or pay taxes as required.

Civil Penalties
If you do not file your return and pay your tax by
the due date, you may have to pay a penalty.
You may also have to pay a penalty if you substantially understate your tax, file a frivolous tax
submission, or fail to supply your TIN. If you
provide fraudulent information on your return,
you may have to pay a civil fraud penalty.
Filing late. If you do not file your return by the
due date (including extensions), you may have
to pay a failure-to-file penalty. The penalty is
based on the tax not paid by the due date (without regard to extensions). The penalty is usually
5% for each month or part of a month that a return is late, but not more than 25%.
Fraud. If your failure to file is due to fraud,
the penalty is 15% for each month or part of a
month that your return is late, up to a maximum
of 75%.
Return over 60 days late. If you file your
return more than 60 days after the due date or
extended due date, the minimum penalty is the
smaller of $450 or 100% of the unpaid tax.
Exception. You will not have to pay the
penalty if you show that you failed to file on time
because of reasonable cause and not because
of willful neglect.
Paying tax late. You will have to pay a failure-to-pay penalty of 1/2 of 1% (0.005) of your
unpaid taxes for each month, or part of a month,
after the due date that the tax is not paid. This
penalty does not apply during the automatic
6-month extension of time to file period if you
paid at least 90% of your actual tax liability on
or before the due date of your return and pay
the balance when you file the return.
The monthly rate of the failure-to-pay penalty is half the usual rate, 1/4% (0.0025 instead
of 1/2% (0.005)), if an installment agreement is
in effect for that month. You must have filed
your return by the due date (including extensions) to qualify for this reduced penalty.
If a notice of intent to levy is issued, the rate
will increase to 1% at the start of the first month
beginning at least 10 days after the day that the
notice is issued. If a notice and demand for immediate payment is issued, the rate will increase to 1% at the start of the first month beginning after the day that the notice and
demand is issued.
This penalty cannot be more than 25% of
your unpaid tax. You will not have to pay the

penalty if you can show that you had a good
reason for not paying your tax on time.
Combined penalties. If both the failure-to-file
penalty and the failure-to-pay penalty (discussed earlier) apply in any month, the 5% (or
15%) failure-to-file penalty is reduced by the
failure-to-pay penalty. However, if you file your
return more than 60 days after the due date or
extended due date, the minimum penalty is the
smaller of $450 or 100% of the unpaid tax.
Accuracy-related penalty. You may have to
pay an accuracy-related penalty if you underpay your tax because:
• You show negligence or disregard of rules
or regulations,
• You substantially understate your income
tax,
• You claim tax benefits for a transaction that
lacks economic substance, or
• You fail to disclose a foreign financial asset.
The penalty is equal to 20% of the underpayment. The penalty is 40% of any portion of the
underpayment that is attributable to an undisclosed noneconomic substance transaction or
an undisclosed foreign financial asset transaction. The penalty will not be figured on any part
of an underpayment on which the fraud penalty,
discussed later, is charged.
Negligence or disregard. The term “negligence” includes a failure to make a reasonable
attempt to comply with the tax law or to exercise
ordinary and reasonable care in preparing a return. Negligence also includes failure to keep
adequate books and records. You will not have
to pay a negligence penalty if you have a reasonable basis for a position you took, or if you
can show a reasonable cause and acted in
good faith.
The term “disregard” includes any careless,
reckless, or intentional disregard.
Adequate disclosure. You can avoid the
penalty for disregard of rules or regulations if
you adequately disclose on your return a position that has at least a reasonable basis. See
Disclosure statement, later.
This exception will not apply to an item that
is attributable to a tax shelter. In addition, it will
not apply if you fail to keep adequate books and
records or to substantiate items properly.
Substantial understatement of income
tax. You understate your tax if the tax shown
on your return is less than the correct tax. The
understatement is substantial if it is more than
the larger of 10% of the correct tax or $5,000.
However, the amount of the understatement is
reduced to the extent the understatement is due
to:
1. Substantial authority,
2. Adequate disclosure and a reasonable basis, or
3. Reasonable cause and good faith .
If an item on your return is attributable to a
tax shelter, there is no reduction for an adequate disclosure. However, there is a reduction
for a position with substantial authority, but only

if you reasonably believed that your tax treatment was more likely than not the proper treatment.
Substantial authority. Whether there is or
was substantial authority for the tax treatment of
an item depends on the facts and circumstances. Consideration will be given to court opinions, Treasury regulations, revenue rulings, revenue
procedures,
and
notices
and
announcements issued by the IRS and published in the Internal Revenue Bulletin that involve the same or similar circumstances as
yours.
Disclosure statement. To adequately disclose the relevant facts about your tax treatment of an item, use Form 8275, Disclosure
Statement. You must also have a reasonable
basis for treating the item the way you did.
In cases of substantial understatement, only
items that meet the requirements of Revenue
Procedure 2020-54, available at IRS.gov/irb/
2020-53_IRB#REV-PROC-2020-54 (or its successor) are considered adequately disclosed
on your return.
Revenue Procedure 2020-54 does not take
into account the effect of tax law changes effective for tax years beginning after December 31,
2020. If a line referenced in this revenue procedure is affected by such a change and requires
additional reporting, a taxpayer may have to file
Form 8275; or Form 8275-R, Regulation Disclosure Statement, until regulations or other guidance has been issued to comply with the requirement.
A complete and accurate disclosure of a tax
position on the appropriate year’s Schedule UTP, Uncertain Tax Position Statement, will
be treated as if the corporation filed a Form
8275 or Form 8275-R regarding the tax position. The filing of a Form 8275 or Form 8275-R,
however, will not be treated as if the corporation
filed a Schedule UTP.
Use Form 8275-R to disclose items or positions contrary to regulations.
Transaction lacking economic substance. For more information on economic
substance, see section 7701(o).

Frivolous tax submission. You may have to
pay a penalty of $5,000 if you file a frivolous tax
return or other frivolous submissions. A frivolous tax return is one that does not include
enough information to figure the correct tax or
that contains information clearly showing that
the tax you reported is substantially incorrect.
For more information on frivolous returns, frivolous submissions, and a list of positions that are
identified as frivolous, see IRS.gov/irb/
2010-17_IRB#NOT-2010-33 (or its successor).
You will have to pay the penalty if you filed
this kind of return or submission based on a frivolous position or a desire to delay or interfere
with the administration of federal tax laws. This
includes altering or striking out the preprinted
language above the space provided for your
signature.
This penalty is added to any other penalty
provided by law.
Fraud. If there is any underpayment of tax on
your return due to fraud, a penalty of 75% of the
underpayment due to fraud will be added to
your tax.
Failure to supply TIN. If you do not include
your SSN or ITIN or the SSN or ITIN of another
person where required on a return, statement,
or other document, you may be subject to a
penalty of $50 for each failure. You may also be
subject to a penalty of $50 if you do not give
your SSN or ITIN to another person when it is
required on a return, statement, or other document.
For example, if you have a bank account
that earns interest, you must give your SSN or
ITIN to the bank. The number must be shown
on the Form 1099-INT or other statement the
bank sends you. If you do not give the bank
your SSN or ITIN, you will be subject to the $50
penalty. (You may also be subject to backup
withholding of income tax.)
You will not have to pay the penalty if you
are able to show that the failure was due to reasonable cause and not willful neglect.

8.
Paying Tax
Through
Withholding or
Estimated Tax
Introduction
This chapter discusses how to pay your U.S. income tax as you earn or receive income during
the year. In general, the federal income tax is a
pay-as-you-go tax. There are two ways to pay
as you go.
1. Withholding. If you are an employee,
your employer probably withholds income
tax from your pay. Tax may also be withheld from certain other income—including
pensions, bonuses, commissions, and
gambling winnings. In each case, the
amount withheld is paid to the U.S. Treasury in your name.
2. Estimated tax. If you do not pay your tax
through withholding, or do not pay enough
tax that way, you might have to pay estimated tax. People who are in business for
themselves will generally have to pay their
tax this way. You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. Estimated tax is used to pay not only income
tax, but self-employment tax and alternative minimum tax as well.

Topics

This chapter discusses:

Criminal Penalties

Foreign financial asset. For more information on undisclosed foreign financial assets,
see section 6662(j) or the Instructions for Form
8938.

You may be subject to criminal prosecution
(brought to trial) for actions such as:

Reasonable cause. You will not have to
pay a penalty if you show a good reason (reasonable cause) for the way you treated an item.
You must also show that you acted in good
faith. This does not apply to a transaction that
lacks economic substance.

2. Willful failure to file a return, supply information, or pay any tax due;

• How to notify your employer of your alien
status,

• Income subject to withholding of income
tax,

1. Tax evasion;

3. Fraud and false statements; or
4. Preparing and filing a fraudulent return.

• Exemptions from withholding,
• Social security and Medicare taxes, and
• Estimated tax rules.

Useful Items

You may want to see:
Publication

Filing erroneous claim for refund or credit.
You may have to pay a penalty if you file an erroneous claim for refund or credit. The penalty
is equal to 20% of the disallowed amount of the
claim, unless you can show that you had reasonable cause for filing your claim. However,
any disallowed amount due to a transaction that
lacks economic substance will not be treated as
due to reasonable cause. The penalty will not
be figured on any part of the disallowed amount
of the claim that is subject to accuracy-related
or fraud penalties.

515 Withholding of Tax on Nonresident
Aliens and Foreign Entities
515

901 U.S. Tax Treaties
901

Form (and Instructions)
W-4 Employee's Withholding Allowance
Certificate
W-4

Notice 1392 Supplemental Form W-4
Instructions for Nonresident Aliens
Notice 1392

Chapter 8

Paying Tax Through Withholding or Estimated Tax

Page 37

W-8BEN Certificate of Foreign Status of
Beneficial Owner for United States
Tax Withholding and Reporting
(Individuals)
W-8BEN

W-8ECI Certificate of Foreign Person's
Claim That Income Is Effectively
Connected With the Conduct of a
Trade or Business in the United
States
W-8ECI

W-9 Request for Taxpayer Identification
Number and Certification

Wages and other compensation paid to a
nonresident alien for services performed as an
employee are usually subject to graduated withholding at the same rates as resident aliens and
U.S. citizens. Therefore, your compensation,
unless it is specifically excluded from the term
“wages” by law, or is exempt from tax by treaty,
is subject to graduated withholding.

Withholding on Wages

W-9

1040-ES (NR) U.S. Estimated Tax for
Nonresident Alien Individuals
1040-ES (NR)

8233 Exemption From Withholding on
Compensation for Independent (and
Certain Dependent) Personal
Services of a Nonresident Alien
Individual
8233

8288-B Application for Withholding
Certificate for Dispositions by Foreign
Persons of U.S. Real Property
Interests
8288-B

13930 Application for Central Withholding
Agreement
13930

See chapter 12 for information about getting
these publications and forms.

Notification of Alien
Status
You must let your employer know whether you
are a resident or a nonresident alien so your
employer can withhold the correct amount of
tax from your wages.
If you are a resident alien under the rules
discussed in chapter 1, you must file Form W-9
or a similar statement with your employer. If you
are a nonresident alien under those rules, you
must furnish to your employer Form 8233 or
Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that
your compensation is subject to graduated withholding at the same rates as resident aliens or
U.S. citizens.
If you are a resident alien and you receive
income other than wages (such as dividends
and royalties) from sources within the United
States, file Form W-9 or similar statement with
the withholding agent (generally, the payer of
the income) so the agent will not withhold tax on
the income at the 30% (or lower treaty) rate. If
you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at
the 30% (or lower treaty) rate. However, if the
income is effectively connected with a U.S.
trade or business, file Form W-8ECI instead.

Withholding From
Compensation

If you are an employee and you receive wages
subject to graduated withholding, you will be required to fill out a Form W-4. Also fill out Form
W-4 for a scholarship or fellowship grant to the
extent it represents payment for past, present,
or future services and for which you are not
claiming a tax treaty withholding exemption on
Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). These are services
you are required to perform as an employee
and as a condition of receiving the scholarship
or fellowship (or tuition reduction).
Nonresident aliens must follow the special
instructions in Notice 1392 when completing
Form W-4 for compensation paid as employees
performing dependent personal services in the
United States. Compensation for dependent
personal services includes amounts paid as
wages, salaries, fees, bonuses, commissions,
compensatory scholarships, fellowship income,
and similar designations for amounts paid to an
employee.
To see if you need to have your withholding
increased or decreased, use the IRS Tax
Withholding Estimator.
See Withholding on Scholarships and Fellowship Grants, later, for how to fill out Form
W-4 if you receive a U.S. source scholarship or
fellowship grant that is not a payment for services.
Students and business apprentices from India. If you are eligible for the benefits of Article
21(2) of the United States-India Income Tax
Treaty, you may claim an additional withholding
allowance for the standard deduction.
Household employees. If you work as a
household employee, your employer does not
have to withhold income tax. However, you may
agree to voluntarily withhold income tax by filing
a Form W-4 with your employer. The agreement
goes into effect when your employer accepts
the agreement by beginning the withholding.
You or your employer may end the agreement
by letting the other know in writing.
Agricultural workers. If you are an agricultural worker on an H-2A visa, your employer
does not have to withhold income tax. However,
your employer will withhold income tax only if
you and your employer agree to withhold. In
that case, you must provide your employer with
a properly completed Form W-4. You can find
more information about not having tax withheld
at IRS.gov/ForeignAgriculturalWorkers.

The following discussion generally applies only
to nonresident aliens. Tax is withheld from resident aliens in the same manner as U.S. citizens.
Page 38

Chapter 8

Paying Tax Through Withholding or Estimated Tax

Wages Exempt From Withholding
Wages that are exempt from U.S. income tax
under an income tax treaty are generally exempt from withholding. For information on how
to claim this exemption from withholding, see
Income Entitled to Tax Treaty Benefits, later.
Wages paid to aliens who are residents of
American Samoa, Canada, Mexico, Puerto
Rico, or the U.S. Virgin Islands may be exempt
from withholding. The following paragraphs explain these exemptions.
Residents of Canada or Mexico engaged in
transportation-related employment. Certain
residents of Canada or Mexico who enter or
leave the United States at frequent intervals are
not subject to withholding on their wages.
These persons either:
• Perform duties in transportation service
between the United States and Canada or
Mexico; or
• Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or
crossing, the boundary between the United
States and Canada or the boundary between the United States and Mexico.
This employment is subject to withholding of social security and Medicare
CAUTION taxes unless the services are performed for a railroad.

!

To qualify for the exemption from withholding during a tax year, a Canadian or Mexican
resident must give the employer a statement in
duplicate with name, address, and identification
number, certifying that the resident:
• Is not a U.S. citizen or resident;
• Is a resident of Canada or Mexico, whichever applies; and
• Expects to perform duties previously described during the tax year in question.
The statement can be in any form, but it
must be dated and signed by the employee and
must include a written declaration that it is
made under penalties of perjury.
Residents of American Samoa and Puerto
Rico. If you are a nonresident alien employee
who is a resident of American Samoa or Puerto
Rico, wages for services performed in American Samoa or Puerto Rico are generally not
subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico.
Residents of the U.S. Virgin Islands. Nonresident aliens who are bona fide residents of
the U.S Virgin Islands are not subject to withholding of U.S. tax on income earned while temporarily employed in the United States. This is
because those persons pay their income tax to
the U.S. Virgin Islands. To avoid having tax
withheld on income earned in the United States,
bona fide residents of the U.S. Virgin Islands
should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U.S. Virgin Islands and expect to
pay tax on all income to the U.S. Virgin Islands.

Withholding on Pensions
If you receive a pension distribution from the
United States, the payment is generally subject
to the 30% (or lower treaty) rate of withholding.
You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after 1986. You must fill out Form
W-8BEN or Form 8233 and give it to the withholding agent or payer before the income is
paid or credited to you.

Withholding on Tip Income
Tips you receive during the year for services
performed in the United States are subject to
U.S. income tax. Include them in taxable income. In addition, tips received while working
for one employer, amounting to $20 or more in
a month, are subject to graduated withholding.

Independent Contractors
If there is no employee-employer relationship
between you and the person for whom you perform services, your compensation is subject to
the 30% (or lower treaty) rate of withholding.
However, if you are engaged in a trade or business in the United States during the tax year,
your compensation for personal services as an
independent contractor (independent personal
services) may be entirely or partly exempt from
withholding if you reach an agreement with the
IRS on the amount of withholding required. An
agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for
payments covered by the agreement after it is
agreed to by all parties. You must agree to
timely file an income tax return for the current
tax year.
Central withholding agreements (CWA). If
you are a nonresident alien entertainer or athlete performing or participating in athletic events
in the United States, you may be able to enter
into a CWA with the IRS for reduced withholding, provided certain requirements are met. Under no circumstances will such a withholding
agreement reduce taxes withheld to less than
the anticipated amount of income tax liability.
Use Form 13930 to apply for a CWA, for a
nonresident alien entertainer or athlete that has
calendar year-to-date U.S. gross income of at
least $10,000. Form 13930 must be mailed to
the address listed below.
We have temporarily waived the income requirement for which form to
CAUTION use when applying for a CWA. Form
13930-A is currently unavailable. While the
waiver is in effect, individuals with income below $10,000 can apply for a CWA using Form
13930, Instructions on how to apply for a Central Withholding Agreement. For more information on how to apply for a CWA, see Form
13930. For more information, go to IRS.gov/
Individuals/International-Taxpayers/CentralWithholding-Agreements.

!

A request for a CWA must be received by
the IRS at least 45 days before the agreement
is to take effect to ensure it is in place before

the tour begins or the first event occurs, and it
must contain all supporting documentation
specified in the instructions, or no consideration
will be given to entering into a CWA. Exceptions
will be considered on a case-by-case basis.
Central Withholding Agreement Program
Internal Revenue Service
850 Trafalgar Ct., Suite 200
Maitland, FL 32751-4153
Final payment exemption. Your final payment of compensation during the tax year for independent personal services may be entirely or
partly exempt from withholding. This exemption
is available only once during your tax year and
applies to a maximum of $5,000 of compensation. To obtain this exemption, you or your
agent must give the following statements and
information to the Commissioner or Commissioner’s delegate.
• A statement by each withholding agent
from whom you have received gross income effectively connected with a trade or
business in the United States during the
tax year, showing the amount of income
paid and the tax withheld. Each statement
must be signed by the withholding agent
and verified by a declaration that it is made
under penalties of perjury.
• A statement by the withholding agent from
whom you expect to receive the final payment of compensation, showing the
amount of the payment and the amount of
tax that would be withheld if a final payment exemption were not granted. This
statement must also be signed by the withholding agent and verified by a declaration
that it is made under penalties of perjury.
• A statement by you that you do not intend
to receive any other income effectively
connected with a trade or business in the
United States during the current tax year.
• The amount of tax that has been withheld
or paid under any other provision of the Internal Revenue Code or regulations for any
income effectively connected with your
trade or business in the United States during the current tax year.
• The amount of your outstanding tax liabilities, if any, including interest and penalties,
from the current tax year or prior tax periods.
• Any provision of an income tax treaty under which a partial or complete exemption
from withholding may be claimed, the
country of your residence, and a statement
of sufficient facts to justify an exemption
under the treaty.
• A statement signed by you, and verified by
a declaration that it is made under penalties of perjury, that all the information given
is true and that to your knowledge no relevant information has been omitted.
If satisfied with the information, the IRS will
determine the amount of your tentative income
tax for the tax year on gross income effectively
connected with your trade or business in the
United States. Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or
Commissioner’s delegate.

Chapter 8

The Commissioner or Commissioner’s delegate will send you a letter, directed to the withholding agent, showing the amount of the final
payment of compensation that is exempt from
withholding and the amount that can be paid to
you because of the exemption. You must give
two copies of the letter to the withholding agent
and must also attach a copy of the letter to your
income tax return for the tax year for which the
exemption is effective. For more information,
see Pub. 515.

Refund of Taxes Withheld in Error
Multilevel marketing. If you are a distributor
for a multilevel marketing company who had
taxes withheld in error, file a U.S. income tax return (Form 1040-NR or Form 1120-F) or, if a tax
return has already been filed, a claim for refund
(Form 1040-X or amended Form 1120-F) to recover the amount withheld in error. You must
also attach to the U.S. income tax return or
claim for refund supporting information that includes, but is not limited to, the following items.
• A copy of your Form W-2, Form 1042-S, or
Form 1099 to prove the amount of taxes
withheld.
• A statement explaining why income reported on your Form W-2, Form 1042-S, or
Form 1099 is not subject to U.S. taxation.
• A statement listing all the dates you entered and left the United States during the
tax year. If the compensation is multiyear
compensation, the statement must list all
the dates you entered and left the United
States during each of the tax years to
which the compensation is attributable.
• A copy of any documents or records that
show the number of days you actually
were present in the United States during
the years listed.
• A statement providing (a) the number of
days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection
with recruiting, training, and supporting
your lower-tier distributors; and (b) the total
number of days (or unit of time less than a
day, if appropriate) that personal services
were performed globally in connection with
recruiting, training, and supporting your
lower-tier distributors.
• Any further relevant document or record
supporting your claim that the taxes were
withheld in error.
Refund of taxes withheld in error on social
security benefits paid to resident aliens.
Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. For U.S. income tax
purposes, green card holders continue to be
resident aliens until their lawful permanent resident status under immigration laws is either
taken away or is administratively or judicially
determined to have been abandoned. See
Green Card Test in chapter 1. If you are a green
card holder and tax was withheld in error on
your social security benefits because you have
a foreign address, the withholding tax is refundable by the IRS. To obtain a refund, you must
file a Form 1040 or 1040-SR. To determine if
you are entitled to a refund, send your return to:

Paying Tax Through Withholding or Estimated Tax

Page 39

Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301
You must also attach the following to your
Form 1040 or 1040-SR.
• A copy of Form SSA-1042S, Social Security Benefit Statement.
• A copy of the green card.
• A signed declaration that includes the following statements: “The SSA should not
have withheld income tax from my social
security benefits because I am a U.S. lawful permanent resident and my green card
has been neither revoked nor administratively or judicially determined to have been
abandoned. I am filing a U.S. income tax
return for the tax year as a resident alien
reporting all of my worldwide income. I
have not claimed benefits for the tax year
under an income tax treaty as the resident
of a country other than the United States.”

Withholding From Other
Income
Other income subject to 30% withholding generally includes fixed or determinable income
such as interest (other than portfolio interest),
dividends, pensions and annuities, and gains
from certain sales and exchanges, discussed in
chapter 4. It also includes 85% of social security
benefits paid to nonresident aliens.
Other income not subject to withholding of
30% (or lower treaty) rate. The following income is not subject to withholding at the 30%
(or lower treaty) rate if you file Form W-8ECI
with the payer of the income.
• Income (other than compensation) that is
effectively connected with your U.S. trade
or business.
• Income from real property that you choose
to treat as effectively connected with a
U.S. trade or business. See Income From
Real Property in chapter 4 for details about
this choice.
Special rules for withholding on partnership
income, scholarships, and fellowships are explained next.

Tax Withheld on Partnership
Income
If you are a foreign partner in a U.S. or foreign
partnership, the partnership will withhold tax on
your share of ECTI from the partnership. Your
partnership may be able to reduce withholding
on your share of ECTI by considering certain
partner-level deductions. Generally, you must
submit Form 8804-C for this purpose. For more
information, see the Instructions for Form
8804-C.
The withholding rate on your share of effectively connected income is generally the highest
rate of tax specified under section 1 (37%).
However, the partnership may withhold at the
highest rate that applies to a particular type of
income allocable to you if you gave the partnership the appropriate documentation. Long-term
Page 40

Chapter 8

capital gain is an example of a particular type of
income to which the highest tax rate applies.
Claim the tax withheld as a credit on your 2022
Form 1040-NR.
The partnership will give you a statement on
Form 8805 showing the tax withheld. A partnership that is publicly traded will withhold tax on
your actual distributions of effectively connected income. In this case, the partnership will
give you a statement on Form 1042-S.
Tax withheld on gain from the sale or exchange of certain partnership interests. If
you are a direct or indirect foreign partner in a
U.S. or foreign partnership that is engaged (or
is treated as engaged) in a trade or business
within the United States and you directly or indirectly dispose of that interest for a gain, then for
transfers occurring after 2017 the transferee will
generally withhold and pay to the IRS on your
behalf a tax equal to 10% of the amount realized on the sale. The rules for withholding and
paying over this amount are similar to the rules
for sales of U.S. real property interests. You will
receive a Form 8288-A reflecting the amount
withheld that you may then claim on line 25f of
your Form 1040-NR as a credit against the tax
you owe on the gain. You may be able to provide certain information to the transferee to reduce or eliminate withholding. For example, if a
nonrecognition provision of the Internal Revenue Code applies to all of the gain realized on a
transfer, the transferee does not need to withhold if you provide a notice describing the application of a nonrecognition provision. If you are a
transferee that failed to withhold, under section
1446(f)(4) the partnership may withhold on distributions to you.
On November 30, 2020, final regulations under section 1446(f) were issued which are generally applicable to transfers of non-PTP interests that occur on or after January 29, 2021.
Notice 2018-29 applies to transfers of non-PTP
interests that occurred before the applicability
date of the final regulations, or, under certain
circumstances, taxpayers may apply the proposed regulations to transfers of non-PTP interests during this time. The requirements for
transfers of PTP interests and withholding under section 1446(f)(4) are suspended for transfers occurring before January 1, 2022. For more
information, see Pub. 515.
For more information, see Treasury Decision 9926 on page 1602 of I.R.B. 2020-51,
available
at
IRS.gov/irb/
2020-51_IRB#TD-9926. Also, see the final regulations as published in the Federal Register at
govinfo.gov/content/pkg/FR-2020-11-30/pdf/
2020-22619.pdf.

Withholding on Scholarships
and Fellowship Grants
There is no withholding on a qualified scholarship received by a candidate for a degree. See
chapter 3.
If you are a nonresident alien student or
grantee with an “F,” “J,” “M,” or “Q” visa and you
receive a U.S. source grant or scholarship that
is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax
at 14% (or lower treaty rate) of the taxable part

Paying Tax Through Withholding or Estimated Tax

of the grant or scholarship that is not a payment
for services. However, if you are not a candidate for a degree and the grant does not meet
certain requirements, tax will be withheld at the
30% (or lower treaty) rate.
Any part of a scholarship or fellowship grant
that is a payment for services is subject to graduated withholding, as discussed earlier under
Withholding on Wages.

Alternate Withholding Procedure
Your withholding agent may choose to use an
alternate procedure by asking you to fill out
Form W-4. See below for items that may reduce
your withholding.
Expenses. Include expenses that will be deductible on your return. These include the IRA
deduction discussed under Deductions in chapter 5.
Nontaxable grant or scholarship. You can
exclude the part of your grant or scholarship
that is not taxable under U.S. law or under a tax
treaty.
Standard deduction. If you are a student who
qualifies under Article 21(2) of the United
States-India Income Tax Treaty, you can take
the standard deduction. The standard deduction amount for 2022 is $12,950.
Form W-4. Complete the appropriate lines of
Form W-4. Sign and date the form and give it to
your withholding agent.
If you file a Form W-4 to reduce or eliminate
the withholding on your scholarship or grant,
you must file an annual U.S. income tax return
to be allowed any deductions you claimed on
that form. If you are in the United States during
more than 1 tax year, you must attach a statement to your yearly Form W-4 indicating that
you have filed a U.S. income tax return for the
previous year. If you have not been in the United States long enough to be required to file a
return, you must attach a statement to your
Form W-4 saying you will file a U.S. income tax
return when required.
After the withholding agent has accepted
your Form W-4, tax will be withheld on your
scholarship or grant at the graduated rates that
apply to wages. The gross amount of the income is reduced by the applicable amount(s)
on Form W-4, and the withholding tax is figured
on the remainder.
You will receive a Form 1042-S from the
withholding agent (usually the payer of your
grant) showing the gross amount of your taxable scholarship or fellowship grant less any
withholding allowance amount, the tax rate, and
the amount of tax withheld. Use this form to prepare your annual U.S. income tax return.
For more information, go to IRS.gov/
FormW4.

Income Entitled to
Tax Treaty Benefits
If a tax treaty between the United States and
your country of residence provides an exemption from, or a reduced rate of, tax for certain
items of income, you should notify the payer of
the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. Generally, you do this by filing either
Form W-8BEN or Form 8233 with the withholding agent.
File Form W-8BEN for income that is not
personal services income. File Form 8233 for
personal services income, as discussed next.
If you qualify for an exemption under a

TIP tax treaty but did not submit a Form

8233 to your withholding agent to claim
an exemption from withholding, you can still get
the benefit of the exemption by filing a Form
1040-NR. Follow the instructions for line 1a of
the Form 1040-NR.
Employees and independent contractors. If
you perform personal services as an employee
or as an independent contractor and you can
claim an exemption from withholding on that
personal service income because of a tax
treaty, give Form 8233 to each withholding
agent from whom amounts will be received.
Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. This is because the factors on which the
treaty exemption is based may not be determinable until after the close of the tax year. In this
case, you must file Form 1040-NR to recover
any overwithheld tax and to provide the IRS
with proof that you are entitled to the treaty exemption.
Students, teachers, and researchers.
Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for
teachers and researchers) at the end of this
publication to the Form 8233 and give it to the
withholding agent. For treaties not listed in the
appendices, attach a statement in a format similar to those for other treaties.
If you received a scholarship or fellowship
grant, as well as personal services income,
from the same withholding agent, use Form
8233 to claim an exemption from withholding
based on a tax treaty for both types of income.
Special events and promotions. Withholding
at the full 30% rate is required for payments
made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from music festivals, boxing promotions,
and other entertainment or sporting events, unless the withholding agent has been specifically
advised otherwise by letter from the IRS. Depending on the calendar year in which the U.S.
gross income is earned, Form 13930 can be
used to request a reduction in withholding.
Withholding may be required even if the income
may be exempt from taxation by provisions of a
tax treaty. One reason for this is that the partial
or complete exemption is usually based on fac-

tors that cannot be determined until after the
close of the tax year.
For more information, go to IRS.gov/
Individuals/International-Taxpayers/CentralWithholding-Agreements.
We have temporarily waived the income requirement for which form to
CAUTION use when applying for a CWA. Form
13930-A is currently unavailable. While the
waiver is in effect, individuals with income below $10,000 can apply for a CWA using Form
13930, Instructions on how to apply for a Central Withholding Agreement. For more information on how to apply for a CWA, see Form
13930. For more information, go to IRS.gov/
Individuals/International-Taxpayers/CentralWithholding-Agreements.

!

You will be required to pay U.S. tax at
the time of your departure from the UniCAUTION ted States on any income for which you
incorrectly claimed a treaty exemption. For
more details on treaty provisions that apply to
compensation, see Pub. 901.

!

Tax withheld on real property sales. If you
are a nonresident alien and you disposed of a
U.S. real property interest, the transferee
(buyer) of the property must generally withhold
a tax equal to 15% of the amount realized on
the disposition.
However, if the property is acquired by the
buyer for use as a residence and the amount realized does not exceed $1 million, the rate of
withholding is 10%.
The amount realized is the sum of:

• The cash paid, or to be paid (principal
only);

• The fair market value of other property
transferred, or to be transferred; and

• The amount of any liability assumed by the

transferee or to which the property is subject immediately before and after the transfer.

If the property transferred was owned jointly
by U.S. and foreign persons, the amount realized is allocated between the transferors based
on the capital contribution of each transferor.
A distribution by a QIE to a nonresident alien
shareholder that is treated as gain from the sale
or exchange of a U.S. real property interest by
the shareholder is subject to withholding at
21%. Withholding is also required on certain
distributions and other transactions by domestic
or foreign corporations, partnerships, trusts,
and estates. These rules are covered in Pub.
515 and in the Instructions for Form 8288.
For information on the tax treatment of dispositions of U.S. real property interests, see
Real Property Gain or Loss in chapter 4.
If you are a partner in a domestic partnership, and the partnership disposes of a U.S.
real property interest at a gain, the partnership
will withhold tax on the amount of gain allocable
to its foreign partners. Your share of the income
and tax withheld will be reported to you on Form
8805 or Form 1042-S (in the case of a PTP).
Withholding is not required in the following
situations.
Chapter 8

1. The property is acquired by the buyer for
use as a residence and the amount realized is not more than $300,000.
2. The property disposed of is an interest in a
domestic corporation if any class of stock
of the corporation is regularly traded on an
established securities market. However,
this exception does not apply to certain
dispositions of substantial amounts of
nonpublicly traded interests in publicly traded corporations.
3. The property disposed of is an interest in a
U.S. corporation that is not regularly traded on an established market and you
(the seller) give the buyer a copy of a
statement issued by the corporation certifying that the interest is not a U.S. real
property interest.
4. You (the seller) give the buyer a certification stating, under penalties of perjury, that
you are not a foreign person, and containing your name, U.S. TIN, and home address.
You can give the certification to a qualified substitute. The qualified substitute
gives the buyer a statement, under penalties of perjury, that the certification is in the
possession of the qualified substitute. For
this purpose, a “qualified substitute” is:
a. The person (including any attorney or
title company) responsible for closing
the transaction, other than your agent;
b. The buyer's agent.
5. The buyer receives a withholding certificate from the IRS.
6. You give the buyer written notice that you
are not required to recognize any gain or
loss on the transfer because of a nonrecognition provision in the Internal Revenue
Code or a provision in a U.S. tax treaty.
The buyer must file a copy of the notice
with the Ogden Service Center, P.O. Box
409101, Ogden, UT 84409. You must verify the notice as true and sign it under penalties of perjury.
See Regulations section 1.1445-2(d)
(2) for more information on the transferor's
notice of nonrecognition.
You may not give the buyer a written
notice for any of the following transfers:
a. The sale of your main home on which
you exclude gain,
b. A like-kind exchange that does not
qualify for nonrecognition treatment in
its entirety, or
c. A deferred like-kind exchange that
has not been completed at the time
the buyer must file Form 8288.
Instead, you must get a withholding certificate (described next).
7. The amount you realize on the transfer of
a U.S. real property interest is zero.
8. The property is acquired by the United
States, a U.S. state or possession, a political subdivision, or the District of Columbia.
9. The distribution is from a domestically
controlled QIE and is treated as a

Paying Tax Through Withholding or Estimated Tax

Page 41

distribution of a U.S. real property interest
only because an interest in the entity was
disposed of in an applicable wash sale
transaction. For the definition of a QIE, see
Qualified investment entities under Real
Property Gain or Loss, earlier. See Wash
sale under Real Property Gain or Loss in
chapter 4.
The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified
substitute has actual knowledge, or receives
notice from a seller's or buyer's agent (or substitute), that they are false. This also applies to the
qualified substitute's statement under (4).
Withholding certificates. The tax required to
be withheld on a disposition can be reduced or
eliminated under a withholding certificate issued by the IRS. In most cases, either you or
the buyer can request a withholding certificate.
A withholding certificate can be issued due
to any of the following.
1. The IRS determines that reduced withholding is appropriate because either:
a. The amount required to be withheld
would exceed your maximum tax liability, or
b. Withholding of the reduced amount
would not jeopardize collection of the
tax.
2. All of your realized gain is exempt from
U.S. tax and you have no unsatisfied withholding liability.
3. You or the buyer enters into an agreement
with the IRS for the payment of tax and
provides security for the tax liability.
See Pub. 515 and IRS.gov/Individuals/
International-Taxpayers/WithholdingCertificates for information on procedures to request a withholding certificate.
Credit for tax withheld. The buyer must report and pay over the withheld tax within 20
days after the transfer using Form 8288. This
form is filed with the IRS with copies A and B of
Form 8288-A. Copy B of this statement will be
stamped received by the IRS and returned to
you (the seller) if the statement is complete and
includes your TIN. You must file Copy B with
your tax return to take credit for the tax withheld.
A stamped copy of Form 8288-A will not be
provided to you if your TIN is not included on
that form. The IRS will send you a letter requesting the TIN and provide instructions for
how to get a TIN. When you provide the IRS
with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A.

Social Security and
Medicare Taxes
If you work as an employee in the United
States, you must pay social security and Medicare taxes in most cases. Your payments of
these taxes contribute to your coverage under
the U.S. social security system. Social security
coverage
provides
retirement
benefits,
Page 42

Chapter 8

survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who
meet certain eligibility requirements.
In most cases, the first $147,000 of taxable
wages received in 2022 for services performed
in the United States is subject to social security
tax. All taxable wages are subject to Medicare
tax. Your employer deducts these taxes from
each wage payment. Your employer must deduct these taxes even if you do not expect to
qualify for social security or Medicare benefits.
You can claim a credit for excess social security
tax on your income tax return if you have more
than one employer and the amount deducted
from your combined wages for 2022 is more
than $9,114. Use the appropriate worksheet in
chapter 3 of Pub. 505 to figure your credit.
If any one employer deducted more than
$9,114, you cannot claim a credit for that
amount. Ask your employer to refund the excess. If your employer does not refund the excess, you can file a claim for refund using Form
843.
In general, U.S. social security and Medicare taxes apply to payments of wages for services performed as an employee in the United
States, regardless of the citizenship or residence of either the employee or the employer.
In limited situations, these taxes apply to wages
for services performed outside the United
States. Your employer should be able to tell you
if social security and Medicare taxes apply to
your wages. You cannot make voluntary payments if no taxes are due.
Additional Medicare Tax. In addition to the
Medicare tax, a 0.9% (0.009) Additional Medicare Tax applies to Medicare wages, RRTA
compensation, and self-employment income
that are more than:
• $250,000 if married filing jointly,
• $125,000 if married filing separately, or
• $200,000 for any other filing status.
There are no special rules for nonresident
aliens for purposes of Additional Medicare Tax.
Wages, RRTA compensation, and self-employment income that are subject to Medicare tax
will also be subject to Additional Medicare Tax if
in excess of the applicable threshold.
Your employer is responsible for withholding
the 0.9% (0.009) Additional Medicare Tax on
Medicare wages or RRTA compensation it pays
to you in excess of $200,000 in the calendar
year. If you intend to file a joint return and you
anticipate that you and your spouse's individual
wages are not going to be more than $200,000
but your combined wages and self-employment
income are going to be more than $250,000,
you may want to request additional withholding
on Form W-4 and/or make estimated tax payments.
If you file Form 1040-NR, you must pay Additional Medicare Tax if the total of your wages
and your self-employment income was more
than $125,000 if married (you checked the Married filing separately box at the top of page 1 of
Form 1040-NR), or $200,000 if single or qualifying surviving spouse (you checked the Single or
Qualifying surviving spouse box at the top of
page 1 of Form 1040-NR).
See Form 8959 and its instructions to determine whether you are required to pay Additional

Paying Tax Through Withholding or Estimated Tax

Medicare Tax. For more information on Additional Medicare Tax, go to IRS.gov/ADMTfaqs.
Self-employed individuals may also be required to pay Additional Medicare Tax. See
Self-Employment Tax, later.

Students and Exchange
Visitors
Generally, services performed by you as a nonresident alien temporarily in the United States
as a nonimmigrant under subparagraph (F), (J),
(M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under
the social security program if the services are
performed to carry out the purpose for which
you were admitted to the United States. This
means that there will be no withholding of social
security or Medicare taxes from the pay you receive for these services. These types of services are very limited and generally include only
on-campus work, practical training, and economic hardship employment.
Social security and Medicare taxes will be
withheld from your pay for these services if you
are considered a resident alien as discussed in
chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the
same.
Services performed by a spouse or minor
child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security.

Nonresident Alien Students
If you are a nonresident alien temporarily admitted to the United States as a student, you are
generally not permitted to work for a wage or
salary or to engage in business while you are in
the United States. In some cases, a student admitted to the United States in “F-1,” “M-1,” or
“J-1” status is granted permission to work. Social security and Medicare taxes are not withheld from pay for the work unless the student is
considered a resident alien.
Any student who is enrolled and regu-

TIP larly attending classes at a school may

be exempt from social security and
Medicare taxes on pay for services performed
for that school.
The USCIS permits on-campus work for students in “F-1” status if it does not displace a
U.S. resident. “On-campus work” means work
performed on the school's premises. On-campus work includes work performed at an
off-campus location that is educationally affiliated with the school. On-campus work under
the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study
and is permitted by the USCIS. Social security
and Medicare taxes are not withheld from pay
for this work unless the student is considered a
resident alien.
If services performed by a nonresident alien
student are not considered as performed to
carry out the purpose for which the student was
admitted to the United States, social security

and Medicare taxes will be withheld from pay
for the services unless the pay is exempt under
the Internal Revenue Code.

pay statements showing the tax paid during the period you were exempt.
Send Form 843 (with attachments) to:

Exchange Visitors
Exchange visitors are temporarily admitted to
the United States under section 101(a)(15)(J) of
the Immigration and Nationality Act. Social security and Medicare taxes are not withheld on
pay for services of an exchange visitor who has
been given permission to work and who possesses or obtains a letter of authorization from
the sponsor unless the exchange visitor is considered a resident alien.
If services performed by an exchange visitor
are not considered as performed to carry out
the purpose for which the visitor was admitted
to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal
Revenue Code.
Nonresident aliens temporarily admitted to
the United States as participants in international
cultural exchange programs under section
101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and
Medicare taxes. The employer must be the petitioner through whom the alien obtained the “Q”
visa. Social security and Medicare taxes are not
withheld from pay for this work unless the alien
is considered a resident alien.

Refund of Taxes Withheld in Error
If social security or Medicare taxes were withheld in error from pay that is not subject to
these taxes, contact the employer who withheld
the taxes for a refund. If you are unable to get a
full refund of the amount from your employer,
file a claim for refund with the IRS on Form 843.
Attach the following items to Form 843.
• A copy of your Form W-2 to prove the
amount of social security and Medicare
taxes withheld.
• A copy of your visa.
• Form I-94 (or other documentation showing your dates of arrival or departure).
• If you have a J-1 visa, attach a copy of
your Form DS-2019.
• If you have an F-1 or M-1 visa, attach a
complete copy of your Form I-20.
• If you are engaged in optional practical
training, attach Form I-766
• If you are engaged in employment due to
severe economic necessity, documentation showing permission to work in the United States.
• A statement from your employer indicating
the amount of the reimbursement your employer provided and the amount of the
credit or refund your employer claimed or
you authorized your employer to claim. If
you cannot obtain this statement from your
employer, you must provide this information on your own statement and explain
why you are not attaching a statement from
your employer or on Form 8316 claiming
your employer will not issue the refund.
• If you were exempt from social security
and Medicare tax for only part of the year,

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201-0038
.
Do not use Form 843 to request a refund of Additional Medicare Tax. If AdCAUTION ditional Medicare Tax was withheld
from your pay in error, you can claim a credit for
any withheld Additional Medicare Tax against
the total tax liability shown on your tax return by
filing Form 8959 with Form 1040, 1040-SR, or
1040-NR. If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040, 1040-SR, or 1040-NR,
you must file Form 1040-X for the prior year in
which the wages or compensation was originally received to recover the Additional Medicare Tax withheld in error. See the Instructions
for Form 1040-X.

!

Agricultural Workers
Agricultural workers temporarily admitted into
the United States on H-2A visas are exempt
from social security and Medicare taxes on
compensation paid to them for services performed in connection with the H-2A visa. You
can find more information about not having tax
withheld at IRS.gov/Individuals/InternationalTaxpayers/Foreign-Agricultural-Workers.

Self-Employment Tax
Self-employment tax is the social security and
Medicare taxes for individuals who are self-employed. Nonresident aliens are not subject to
self-employment tax unless an international social security agreement in effect determines that
they are covered under the U.S. social security
system. Residents of the U.S. Virgin Islands,
Puerto Rico, Guam, the CNMI, or American Samoa are considered U.S. residents for this purpose and are subject to the self-employment
tax. You can find more information about international social security agreements, later.
Resident aliens must pay self-employment
tax under the same rules that apply to U.S. citizens. However, a resident alien employed by
an international organization, a foreign government, or a wholly owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United
States.
Self-employment income you receive while
you are a resident alien is subject to self-employment tax even if it was paid for services you
performed as a nonresident alien.
Example. Bill Jones is an author. Bill had
several books published in a foreign country
while Bill was a citizen and resident of that
country. During 2022, Bill entered the United
States as a resident alien. After becoming a
U.S. resident, Bill continued to receive royalties
from Bill’s foreign publisher. Bill reports Bill’s
Chapter 8

income and expenses on the cash basis (income is reported on the tax return when received and expenses are deducted when paid).
Bill's 2022 self-employment income includes
the royalties received after becoming a U.S.
resident even though the books were published
while still being a nonresident alien. This royalty
income is subject to self-employment tax.
Reporting self-employment tax. Use Schedule SE (Form 1040) to report and figure your
self-employment tax. Then, enter the tax on
Schedule 2 (Form 1040), line 4. Attach Schedule SE (Form 1040) to Form 1040, 1040-SR, or
1040-NR.
Deferral of employment tax deposits and
payments. Section 2302 of the CARES Act
permits self-employed individuals to defer payment of a portion of their 2020 self-employment
tax until 2021 and 2022. Specifically, the payment of 50% of the social security tax imposed
on net earnings from self-employment earned
during the period beginning on March 27, 2020,
and ending December 31, 2020, may be deferred. Up to half of the maximum amount that can
be deferred must be paid by December 31,
2021, and the remaining amount must be paid
by December 31, 2022.
The deferral is calculated and reported on
Part III of Schedule SE (Form 1040). For more
information, see Schedule SE (Form 1040) and
its instructions.
Additional Medicare Tax. Self-employed individuals must pay a 0.9% (0.009) Additional
Medicare Tax on self-employment income that
exceeds one of the following threshold amounts
(based on your filing status).
• Married filing jointly—$250,000.
• Married filing separately—$125,000.
• Single, Head of household, or Qualifying
surviving spouse—$200,000.
If you have both wages and self-employment income, the threshold amount for applying
the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by
the amount of wages subject to Additional Medicare Tax. A self-employment loss should not
be considered for purposes of this tax.
If you file Form 1040-NR, you must pay Additional Medicare Tax if the total of your wages
and your self-employment income was more
than $125,000 if married (you checked the Married filing separately box at the top of page 1 of
Form 1040-NR), or $200,000 if single or qualifying surviving spouse (you checked the Single or
Qualifying surviving spouse box at the top of
page 1 of Form 1040-NR).
See Form 8959 and its separate instructions
to determine whether you are required to pay
Additional Medicare Tax. For more information
on Additional Medicare Tax, go to IRS.gov/
ADMTfaqs.
Deduction for employer-equivalent portion
of self-employment tax. If you must pay
self-employment tax, you can deduct a portion
of the self-employment tax paid in figuring your
adjusted gross income. This deduction is figured on Schedule SE (Form 1040).

Paying Tax Through Withholding or Estimated Tax

Page 43

Note. No portion of the Additional Medicare
Tax is deductible for self-employment tax.
More information. See Pub. 334 for more information about self-employment tax.

International Social
Security Agreements
The United States has entered into social security agreements, commonly referred to as
“Totalization agreements,” with foreign countries to coordinate social security coverage and
taxation of workers employed for part or all of
their working careers in one of the countries.
Under these agreements, dual coverage and
dual contributions (taxes) for the same work are
eliminated. The agreements generally make
sure that social security taxes (including
self-employment tax) are paid only to one country.
For a list of current international social security agreements, go to SSA.gov/international/
status.html. As agreements with additional
countries enter into force, they will be posted on
this website. For more information on international social security agreements, go to
SSA.gov/international/
totalization_agreements.html.
Employees. Generally, under these agreements, you are subject to social security taxes
only in the country where you are working.
However, if you are temporarily sent to work for
the same employer in the United States and
your pay would normally be subject to social security taxes in both countries, most agreements
provide that you remain covered only by the social security system of the country from which
you were sent.
To establish that your pay is subject only to
foreign social security taxes and is exempt from
U.S. social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage
from the appropriate agency of the foreign
country. This will usually be the same agency to
which you or your employer pays your foreign
social security taxes. The foreign agency will be
able to tell you what information is needed for
them to issue the certificate. Your employer
should keep a copy of the certificate because it
may be needed to show why you are exempt
from U.S. social security taxes. Only wages
paid on or after the effective date of the agreement can be exempt from U.S. social security
taxes.
Some of the countries with which the
United States has agreements will not
issue certificates of coverage. In this
case, either you or your employer should request a statement that your wages are not covered by the U.S. social security system. Request the statement from the following address.
U.S. Social Security Administration
Office of Earnings and International
Operations
P.O. Box 17741
Baltimore, MD 21235-7741

Page 44

Chapter 8

Self-employed
individuals. Under
most
agreements, self-employed individuals are covered by the social security system of the country where they reside. However, under some
agreements, you may be exempt from U.S.
self-employment tax if you temporarily transfer
your business activity to or from the United
States.
If you believe that your self-employment income is subject only to U.S. self-employment
tax and is exempt from foreign social security
taxes, request a Certificate of Coverage from
the U.S. SSA or by writing to the address given
earlier. This certificate will establish your exemption from foreign social security taxes.
To request or submit the Certificate of Coverage online, go to OPTS.ssa.gov/. You can
also request a Certificate of Coverage by fax at
410-966-1861 or by writing to the following address.
Social Security Administration
Office of Earnings and
International Operations
P.O. Box 17741
Baltimore, MD 21235-7741
To establish that your self-employment income is subject only to foreign social security
taxes and is exempt from U.S. self-employment
tax, request a Certificate of Coverage from the
appropriate agency of the foreign country. If the
foreign country will not issue the certificate, you
should request a statement that your income is
not covered by the U.S. social security system.
Request it from the U.S. SSA, at the address
given earlier. Attach a photocopy of either statement to Form 1040 or 1040-SR each year you
are exempt. Also enter “Exempt, see attached
statement” on the line for self-employment tax.
For questions on the coverage rules of

TIP the agreements, call 410-965-0160.

Estimated Tax
Form 1040-ES (NR)
You may have income from which no U.S. income tax is withheld. Or, the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. If so,
you may have to pay estimated tax.
Generally, you must make estimated tax
payments for 2023 if you expect to owe at least
$1,000 in tax and you expect your withholding
and certain refundable credits to be less than
the smaller of:
1. 90% (0.90) of the tax to be shown on your
2023 income tax return, or
2. 100% (1.00) of the tax shown on your
2022 income tax return (if your 2022 return
covered all 12 months of the year).
If your adjusted gross income for 2022 was
more than $150,000 ($75,000 if your filing status for 2022 is Married filing separately), substitute 110% (1.10) for 100% (1.00) in (2) above if
you are not a farmer or fisherman. Item (2) does
not apply if you did not file a 2022 return.

Paying Tax Through Withholding or Estimated Tax

A nonresident alien should use Form
1040-ES (NR) to figure and pay estimated tax.
If you pay by check, make it payable to "United
States Treasury."
How to estimate your tax for 2023. If you
filed a 2022 return on Form 1040-NR and expect your income and total deductions for 2023
to be nearly the same, you should use your
2022 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR)
instructions. If you did not file a return for 2022,
or if your income, deductions, or credits will be
different for 2023, you must estimate these
amounts. Figure your estimated tax liability using the Tax Rate Schedule in the 2023 Form
1040-ES (NR) instructions for your filing status.
Note. If you expect to be a resident of Puerto Rico during the entire year, use Form
1040-ES or Formulario 1040-ES (PR).
When to pay estimated tax. Make your first
estimated tax payment by the due date for filing
the previous year's Form 1040-NR. If you have
wages subject to the same withholding rules
that apply to U.S. citizens, you must file Form
1040-NR and make your first estimated tax payment by April 18, 2023. If you do not have wages subject to withholding, file your income tax
return and make your first estimated tax payment by June 15, 2023.
If your first estimated tax payment is due
April 18, 2023, you can pay your estimated tax
in full at that time or in four equal installments by
the dates shown next.
1st installment . . . . . . . . . . . . .
2nd installment . . . . . . . . . . . .
3rd installment . . . . . . . . . . . . .
4th installment . . . . . . . . . . . .

April 18, 2023
June 15, 2023
Sept. 15, 2023
Jan. 16, 2024

If your first payment is not due until June 15,
2023, you can pay your estimated tax in full at
that time or:
1.

1/2

of your estimated tax by June 15, 2023;

2.

1/4

of the tax by September 15, 2023; and

3.

1/4

by January 16, 2024.
You do not have to make the payment

TIP due January 16, 2024, if you file your

2023 Form 1040-NR by January 31,
2024, and pay the entire balance due with your
return.
Fiscal year. If your return is not on a calendar year basis, your due dates are the 15th day
of the 4th, 6th, and 9th months of your fiscal
year, and the 1st month of the following fiscal
year. If any date falls on a Saturday, Sunday, or
legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday.
Changes in income or deductions. Even if
you are not required to make an estimated tax
payment in April or June, your circumstances
may change so that you will have to make estimated tax payments later. This can happen if
you receive additional income or if any of your
deductions are reduced or eliminated. If so, see
the Form 1040-ES (NR) instructions and Pub.
505 for information on figuring your estimated
tax.

Amended estimated tax. If, after you have
made estimated tax payments, you find your
estimated tax is substantially increased or decreased because of a change in your income or
exemptions, you should adjust your remaining
estimated tax payments. To do this, see the Instructions for Form 1040-ES (NR) and Pub.
505.
Penalty for failure to pay estimated income
tax. You will be subject to a penalty for underpayment of installments of estimated tax except
in certain situations. These situations are explained on Form 2210.

Topics

Total compensation

This chapter discusses:

• Typical tax treaty benefits,
• How to obtain copies of tax treaties, and
• How to claim tax treaty benefits on your tax
return.

. . . . . . . . . . . . . . . . . .

Less: Deductions

. . . . . . . . . . . . . . . . . . .

0

Taxable income

. . . . . . . . . . . . . .

$24,500

Tax determined by graduated rate (Tax Table
column for single taxpayers) . . . . . . . . . . . .

Useful Items

Plus: Tax on gross dividends ($1,400 ×
(0.30)) . . . . . . . . . . . . . . . . . . . . . .

You may want to see:
Publication

. . . . .

Tax determined as though treaty had not
come into effect . . . . . . . . . . . . . .

901 U.S. Tax Treaties

$24,500

$2,735

420

$3,155

901

Form (and Instructions)
1040-NR U.S. Nonresident Alien Income
Tax Return
1040-NR

8833 Treaty-Based Return Position
Disclosure Under Section 6114 or
7701(b)

9.

8833

Tax Treaty
Benefits
Introduction
A nonresident alien (and certain resident aliens)
from a country with which the United States has
an income tax treaty may qualify for certain benefits. Most treaties require that the nonresident
alien be a resident of the treaty country to qualify in the year the benefit is claimed. However,
in the case of certain students, trainees, teachers, or researchers, some treaties only require
the nonresident alien to be a resident of the
treaty country immediately prior to coming to
the United States.
Tax treaty tables. You can access the tax
treaty tables by going to IRS.gov/Individuals/
International-Taxpayers/Tax-Treaty-Tables.
You can access the texts of recently signed
U.S. income tax treaties, protocols, and tax information exchange agreements (TIEAs) and
the accompanying Treasury Department tax
treaty technical explanations as they become
publicly available, as well as the U.S. Model Income Tax Convention, at Home.Treasury.gov/
Policy-Issues/Tax-Policy/International-Tax.

!

CAUTION

force.

Arthur's tax liability, figured by taking into account the reduced rate on dividend income as
provided by the tax treaty, is $2,945 determined
as follows.

Note that treaty and TIEA documents
are posted on this site after signature
and before ratification and entry into

The full text of individual tax treaties is also
available at IRS.gov/Businesses/InternationalBusinesses/United-States-Income-TaxTreaties-A-to-Z. For more information about tax
treaties, go to IRS.gov/Individuals/InternationalTaxpayers/Tax-Treaties.
You can generally arrange to have withholding tax reduced or eliminated on wages and
other income that are eligible for tax treaty benefits. See Income Entitled to Tax Treaty Benefits in chapter 8.

See chapter 12 for information about getting
these publications and forms.

Treaty Income
A nonresident alien's treaty income is the gross
income on which the tax is limited by a tax
treaty. Treaty income includes, for example,
dividends from sources in the United States that
are subject to tax at a tax treaty rate not to exceed 15%. Nontreaty income is the gross income of a nonresident alien on which the tax is
not limited by a tax treaty.
Figure the tax on treaty income on each
separate item of income at the reduced rate that
applies to that item under the treaty.
To determine tax on nontreaty income, figure the tax at either the flat 30% rate or the
graduated rate, depending upon whether or not
the income is effectively connected with your
trade or business in the United States.
Your tax liability is the sum of the tax on
treaty income plus the tax on nontreaty income,
but it cannot be more than the tax liability figured as if the tax treaty had not come into effect.
Example. Arthur Banks is a nonresident
alien who is single and a resident of a foreign
country that has a tax treaty with the United
States. Arthur received gross income of
$25,900 during the tax year from sources within
the United States, consisting of the following
items.
Dividends on which the tax is limited to a 15%
rate by the tax treaty . . . . . . . . . . . . . . . . .

$1,400

Compensation for personal services on which
the tax is not limited by the tax treaty . . . . . .

24,500

Total gross income .

. . . . . . . . . . . .

$25,900

Arthur was engaged in business in the United States during the tax year. Arthur’s dividends are not effectively connected with that
business. Arthur has no deductions.
Arthur’s tax liability, figured as though the
tax treaty had not come into effect, is $3,155
determined as follows.

Tax determined by graduated rate (same as
figured above) . . . . . . . . . . . . . . . . . . . .

.

Plus: Tax on gross dividends ($1,400 ×
(0.15)) . . . . . . . . . . . . . . . . . . . . . .

. . . . .

Tax on compensation and dividends

. . .

$2,735

210
$2,945

Arthur’s tax liability, therefore, is limited to
$2,945, the tax liability figured using the tax
treaty rate on the dividends.

Some Typical Tax
Treaty Benefits
The following paragraphs briefly explain the exemptions that are available under tax treaties
for personal services income, remittances,
scholarships, fellowships, and capital gain income. The conditions for claiming the exemptions vary under each tax treaty. For more information about the conditions under a particular
tax treaty, download the complete text of most
U.S. tax treaties at IRS.gov/Businesses/
International-Businesses/United-StatesIncome-Tax-Treaties-A-to-Z. Technical explanations for many of those treaties are also available at that site. Also see Pub. 901.
Tax treaty benefits also cover income such
as dividends, interest, rentals, royalties, pensions, and annuities. These types of income
may be exempt from U.S. tax or may be subject
to a reduced rate of tax. For more information,
see Pub. 901 or the applicable tax treaty.

Personal Services
Under most income tax treaties, nonresident aliens from treaty countries and dual residents
who tie break in favor of the treaty country (see
chapter 1) who are temporarily present in the
United States to perform services may be eligible to exempt some or all of their personal services income from U.S. tax if they meet the requirements of the applicable treaty article.
Income from employment. Most income tax
treaties have an “income from employment” article, sometimes called the dependent personal
services article, which allows residents of the

Chapter 9

Tax Treaty Benefits

Page 45

treaty country to exempt income earned as employees in the United States from U.S. tax if
they satisfy the following.
• They are present in the United States for a
period not exceeding 183 days in a
12-month period.
• The income is paid by a foreign employer.
• The income is not borne by a U.S. permanent establishment of the foreign employer.
Some income tax treaties contain different requirements, such as a different period of maximum presence. For more information, see Pub.
901.
Independent personal services. Some income tax treaties contain an “independent personal services” article, which allows residents
of the treaty country to exempt income earned
as an independent contractor or as a self-employed individual from U.S. tax if they are
present in the United States for a period not exceeding a certain number of days and if they do
not have a fixed base regularly available to
them in the United States.
Note. Some treaties do not have an independent service article. Under these treaties, income for independent personal services may
be covered by the business profits article. Under the business profits article, individuals can
generally exempt their business profits from
U.S. tax unless they have a permanent establishment in the United States to which the business profits are attributable. For more information, including definitions of the terms "fixed
base" and "permanent establishment," see Pub.
901.

Teachers, Professors,
and Researchers
Under many income tax treaties, nonresident
alien teachers or professors who temporarily
visit the United States for the primary purpose
of teaching at a university or other accredited
educational institution are not subject to U.S. income tax on compensation received for teaching for the first 2 or 3 years after their arrival in
the United States. Many treaties also provide
an exemption for engaging in research.
Generally, the teacher or professor must be
in the United States primarily to teach, lecture,
instruct, or engage in research. A substantial
part of that person's time must be devoted to
those duties. The normal duties of a teacher or
professor include not only formal classroom
work involving regularly scheduled lectures,
demonstrations, or other student-participation
activities, but also the less formal method of
presenting ideas in seminars or other informal
groups and in joint efforts in the laboratory.
If you entered the United States as a nonresident alien, but are now a resident alien, the
treaty exemption may still apply. See Students,
Apprentices, Trainees, Teachers, Professors,
and Researchers Who Became Resident Aliens, later, under Resident Aliens.

Page 46

Chapter 9

Tax Treaty Benefits

Employees of
Foreign Governments
All treaties have provisions for the exemption of
income earned by certain employees of foreign
governments. However, a difference exists
among treaties as to who qualifies for this benefit. Under many treaties, aliens who are U.S.
residents do not qualify. Under most treaties,
aliens who are not nationals or subjects of the
foreign country do not qualify. Employees of foreign governments should read the pertinent
treaty carefully to determine whether they qualify for benefits. Chapter 10 of this publication
also has information for employees of foreign
governments.

Students, Apprentices,
and Trainees
Under some income tax treaties, students, apprentices, and trainees are exempt from tax on
remittances received from abroad for study and
maintenance. Also, under some treaties, scholarship and fellowship grants, and a limited
amount of compensation received by students,
apprentices, and trainees, may be exempt from
tax.
If you entered the United States as a nonresident alien, but are now a resident alien, the
treaty exemption may still apply. See Students,
Apprentices, Trainees, Teachers, Professors,
and Researchers Who Became Resident Aliens, later, under Resident Aliens.

Capital Gains
Most treaties provide for the exemption of gains
from the sale or exchange of personal property.
Generally, gains from the sale or exchange of
real property located in the United States are
taxable.

Resident Aliens
Resident aliens may qualify for tax treaty benefits in the situations discussed below.

General Rule for Resident Aliens
Resident aliens generally do not qualify for tax
treaty benefits because most tax treaties contain a "saving clause" that preserves or "saves"
the right of the United States to tax its citizens
and residents as if the tax treaty had not come
into effect. However, many tax treaties have exceptions to the saving clause, which may allow
a resident alien to continue to claim treaty benefits.
Some exceptions to the saving clause apply
to all resident aliens (for example, under the
United States-People's Republic of China
treaty); others apply only to resident aliens who
are not lawful permanent residents of the United
States (green card holders).
In most cases, you will also not need to report the income on your Form 1040 or 1040-SR
because the income will be exempt from U.S.
tax under the treaty. However, if the income has

been reported as taxable income on a Form
W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 or 1040-SR (for example, line 1 in the case of wages or salaries).
Enter the amount for which treaty benefits are
claimed on Schedule 1 (Form 1040), line 8z.
Enter “Exempt income,” the name of the treaty
country, and the treaty article that provides the
exemption. Combine the amounts reported on
lines 8a through 8z on Schedule 1 (Form 1040)
and enter on line 9. Then, combine the totals
from Schedule 1 (Form 1040), lines 1 through 7
and 9 and enter the total on line 10. Then, enter
the total from Schedule 1 (Form 1040), line 10,
on Form 1040 or 1040-SR, line 8.
Also follow the above procedure for income
that is subject to a reduced rate of tax, instead
of an exemption, under the treaty. Attach a
statement to Form 1040 or 1040-SR showing a
computation of the tax at the reduced rate, the
name of the treaty country, and the treaty article
that provides for the reduced tax rate. Enter this
tax on Form 1040 or 1040-SR, line 16. Check
box 3 and enter "Tax from attached statement."
Example. Jacques Dubois, who is a resident of the United States under Article 4 of the
United States-France income tax treaty, receives French social security benefits. Under
Article 18(1) of the treaty, French social security
benefits are not taxable by the United States.
Benefits conferred by Article 18(1) are excepted
from the saving clause under Article 29(3) of the
treaty. Jacques is not required to file a Form
8833 for French social security benefits or report the benefits on Form 1040 or 1040-SR.

Special Rule for Canadian and
German Social Security Benefits
Under income tax treaties with Canada and
Germany, if a U.S. resident receives social security benefits from Canada or Germany, those
benefits are treated for U.S. income tax purposes as if they were received under the social
security legislation of the United States. If you
receive social security benefits from Canada or
Germany, include them on line 1 of your Social
Security Benefits Worksheet in the Instructions
for Form 1040, for purposes of determining the
taxable amount to be reported on Form 1040 or
1040-SR, line 6b. You are not required to file a
Form 8833 for those benefits.

Students, Apprentices, Trainees,
Teachers, Professors, and
Researchers Who Became
Resident Aliens
Generally, you must be a nonresident alien student, apprentice, trainee, teacher, professor, or
researcher in order to claim a tax treaty exemption for remittances from abroad for study and
maintenance in the United States, for scholarship, fellowship, and research grants, and for
wages or other personal service compensation.
Once you become a resident alien, you can
generally no longer claim a tax treaty exemption
for this income.

However, if you entered the United States
as a nonresident alien, but you are now a resident alien for U.S. tax purposes, the treaty exemption will continue to apply if the tax treaty's
saving clause (explained earlier) provides an
exception for it and you otherwise meet the requirements for the treaty exemption (including
any time limit for claiming treaty exemptions,
explained below). This is true even if you are a
nonresident alien electing to file a joint return,
as explained in chapter 1.
If you qualify under an exception to the treaty's saving clause, you can avoid income tax
withholding by giving the payer a Form W-9 with
the statement required by the Form W-9 instructions.
Time limit for claiming treaty exemptions.
Many treaties limit the number of years you can
claim a treaty exemption. For students, apprentices, and trainees, the limit is usually 4–5
years; for teachers, professors, and researchers, the limit is usually 2–3 years. Once you
reach this limit, you can no longer claim the
treaty exemption. See the treaty or Pub. 901 for
the time limits that apply.
How to report income on your tax return. In
most cases, you will not need to report the income on your Form 1040 or 1040-SR because
the income will be exempt from U.S. tax under
the treaty. However, if the income has been reported as taxable income on a Form W-2, Form
1042-S, Form 1099, or other information return,
you should report it on the appropriate line of
Form 1040 or 1040-SR (for example, line 1 in
the case of wages, salaries, scholarships, or
fellowships). Enter the amount for which treaty
benefits are claimed on Schedule 1 (1040),
line 8z. Enter “Exempt income,” the name of the
treaty country, and the treaty article that provides the exemption. Combine the amounts reported on lines 8a through 8z on Schedule 1
(Form 1040) and enter on line 9. Then, combine
the totals from Schedule 1 (Form 1040), lines 1
through 7 and 9 and enter the total on line 10.
Then, enter the total from Schedule 1 (Form
1040), line 10, on Form 1040 or 1040-SR,
line 8.
Example. A citizen of the People's Republic of China entered the United States as a nonresident alien student on January 1, 2018. The
student remained a nonresident alien through
2022 and was able to exclude scholarship from
U.S. tax in those years under Article 20 of the
U.S.-People's Republic of China income tax
treaty. On January 1, 2023, the student became
a resident alien under the substantial presence
test because their stay in the United States exceeded 5 years. Even though the student is
now a resident alien, the provisions of Article 20
still apply because of the exception to the saving clause in paragraph 2 of the Protocol to the
U.S.–People's Republic of China treaty dated
April 30, 1984. The student should submit Form
W-9 and the required statement to the payer.

ii. As a beneficial owner that is a direct account holder of a U.S. financial institution or qualified intermediary, or a direct partner,
beneficiary, or owner of a withholding foreign partnership or
trust, from that U.S. financial institution, qualified intermediary, or
withholding foreign partnership or
trust.

Reporting Treaty
Benefits Claimed
If you claim treaty benefits that override or modify any provision of the Internal Revenue Code,
and by claiming these benefits your tax is, or
might be, reduced, you must attach a fully completed Form 8833 to your tax return. See Exceptions below for the situations where you are
not required to file Form 8833.
Form 8833 filing requirement. You must file
a U.S. tax return and Form 8833 if you claim the
following treaty benefits.
• You claim a reduction or modification in the
taxation of gain or loss from the disposition
of a U.S. real property interest based on a
treaty.
• You claim a credit for a specific foreign tax
for which foreign tax credit would not be allowed by the Internal Revenue Code.
• You receive payments or income items totaling more than $100,000 and you determine your country of residence under a
treaty and not under the rules for residency
discussed in chapter 1.

The exception described in (6)
above does not apply to any amounts
for which a treaty-based return disclosure is specifically required by the
Form 8833 instructions.
Penalty for failure to provide required information on Form 8833. If you are required to
report the treaty benefits but do not, you may be
subject to a penalty of $1,000 for each failure.
Additional information. For additional information, see Regulations section 301.6114-1(c).

These are the more common situations for
which Form 8833 is required. For additional
provisions, see the Form 8833 instructions.

10.

Exceptions. You do not have to file Form 8833
for any of the following situations.

Employees
of Foreign
Governments
and
International
Organizations

1. You claim a reduced rate of withholding
tax under a treaty on interest, dividends,
rent, royalties, or other fixed or determinable annual or periodic income ordinarily
subject to the 30% rate.
2. You claim that a treaty reduces or modifies
the taxation of income from dependent
personal services, pensions, annuities, social security and other public pensions, or
income of artists, athletes, students, trainees, or teachers. This includes taxable
scholarship and fellowship grants.
3. You claim a reduction or modification of
taxation of income under an International
Social Security Agreement or a Diplomatic
or Consular Agreement.
4. You are a partner in a partnership or a
beneficiary of an estate or trust and the
partnership, estate, or trust reports the required information on its return.
5. The payments or items of income that are
otherwise required to be disclosed total no
more than $10,000.
6. You are claiming treaty benefits for
amounts that are:
a. Reported to you on Form 1042-S; and
b. Received by you:
i. As a related party from a reporting corporation within the meaning of section 6038A (relating to
information returns on Form 5472
filed by U.S. corporations that are
25% owned by a foreign person),
or
Chapter 10

Introduction
Employees of foreign governments (including
foreign political subdivisions) may be able to exempt their foreign government wages from U.S.
income tax if they satisfy the requirements of
any one of the following.
1. The applicable article in the multilateral
Vienna Convention on Diplomatic Relations, the multilateral Vienna Convention
on Consular Relations, or a bilateral consular convention, if one exists, between
the United States and the foreign country;
2. The applicable article in a bilateral tax
treaty, if one exists, between the United
States and the foreign country; or
3. The requirements for obtaining an exemption from U.S. income tax for foreign government wages provided under U.S. tax
law.

Employees of Foreign Governments and International Organizations

Page 47

Employees of international organizations
may be able to exempt their wages under a provision, if one exists, in the international agreement creating the international organization, or
by satisfying the requirements for obtaining an
exemption for such wages under U.S. tax law.
An “international organization” is an organization designated by the President of the United States through Executive Order to qualify
for the privileges, exemptions, and immunities
provided in the International Organizations Immunities Act.
The exemption discussed in this chapter applies only to pay received for official services
performed for a foreign government or international organization. Other U.S. source income
received by persons who qualify for this exemption may be fully taxable or given favorable
treatment under an applicable tax treaty provision. The proper treatment of this kind of income (interest, dividends, etc.) is discussed
earlier in this publication.

Employees of Foreign
Governments
Exemption under Vienna Conventions or a
bilateral consular convention. You should
first look at the tax exemption provisions under
the Vienna Conventions or a bilateral consular
convention, if one exists, to see if your wages
qualify for exemption from U.S. income tax under those provisions. Generally, you are not entitled to the income tax exemption available under either of the Vienna Conventions or a
bilateral consular convention if you are a U.S.
citizen or resident alien. For further information
regarding the Vienna Conventions and bilateral
consular conventions, email the Department of
State Office of Foreign Missions at
OFMAssistants@state.gov.
Exemption under tax treaty. If you do not
qualify for the tax exemption provided under the
Vienna Conventions or a bilateral consular convention but are from a country that has a tax
treaty with the United States, you should look at
the tax treaty to see if there is a provision that
exempts your wages from U.S. income tax. If
you are a U.S. citizen or resident alien working
in the United States for a foreign government,
your wages are usually not exempt. For more
information, see Wages and Pensions Paid by a
Foreign Government in Pub. 901.
Exemption under U.S. tax law. Employees
of foreign governments who do not qualify under the tax exemption provisions of either of the
Vienna Conventions, a bilateral consular convention, or a tax treaty may be able to exempt
their foreign government wages from U.S. income tax if they satisfy the following requirements for obtaining an exemption for such wages under U.S. tax law.
The exemption under U.S. tax law applies only to current foreign governCAUTION ment employees and not to former employees. Pensions received by former
employees of foreign governments living in the
United States do not qualify for the exemption
discussed here.

!

Page 48

Chapter 10

This exemption does not apply to independent contractors. Common law
CAUTION rules apply to determine whether you
are an employee or an independent contractor.
See Pub. 1779, Independent Contractor or Employee, and Pub. 15-A, Employer’s Supplemental Tax Guide.

ganization in the United States, first look to see
if the international agreement establishing the
international organization you work for has such
a provision and whether you qualify under it.
Generally, these provisions will not exempt wages of U.S. citizen and resident alien employees.

Your wages are not eligible for exemption under U.S. tax law if you are emCAUTION ployed by a “controlled commercial entity” or your services are primarily in connection
with a commercial activity of the foreign government (within or outside the United States). A
controlled commercial entity is an entity that is
50% (0.50) or more owned by a foreign government that is engaged in commercial activity
within or outside the United States.

Exemption under U.S. tax law. If the international agreement creating the international organization you work for does not contain a tax
exemption provision and you are not a U.S. citizen (or if you are a U.S. citizen but also a citizen
of the Republic of the Philippines), you may be
able to exempt your wages under U.S. law.
However, see Aliens who keep immigrant (lawful permanent resident) status, later, for a special rule that may affect your qualifying for this
exemption.

Requirements. If you are not a U.S. citizen (or
if you are a U.S. citizen but also a citizen of the
Republic of the Philippines) and you work for a
foreign government in the United States, your
foreign government wages are exempt from
U.S. income tax if:

The exemption under U.S. tax law applies only to current international orCAUTION ganization employees and not to former employees. Pensions received by former
employees of international organizations living
in the United States do not qualify for the exemption discussed here.

!

!

1. You perform services of a similar character to those performed by U.S. Government employees in foreign countries, and
2. The country of your foreign government
employer grants an equivalent tax exemption to U.S. Government employees performing similar services in its country.
However, see Aliens who keep immigrant (lawful permanent resident) status, later, for a special rule that may affect your qualifying for this
exemption.
To claim the tax exemption, you must be
able to demonstrate that you satisfy both U.S.
tax law requirements.
Certification. A Department of State certification, if one has been issued, is the simplest
method to establish that you meet the similar
services and equivalent tax exemption requirements but is not required to qualify for the U.S.
tax law exemption. For information about
whether a certification has been issued and
whether such certification is currently valid and
applicable to you, email the Department of
State Office of Foreign Missions at
OFMAssistants@state.gov.
Where no valid certification exists, you must
establish with other written evidence that you
perform services of a similar character to those
performed by U.S. Government employees in
foreign countries and that the country of your
foreign government employer grants an equivalent exemption to U.S. Government employees
performing similar services in its country.

Employees of
International
Organizations
Exemption under international organization
agreement. Many agreements that establish
international organizations contain a provision
that may exempt your wages from U.S. income
tax. If you are employed by an international or-

Employees of Foreign Governments and International Organizations

!

This exemption does not apply to independent contractors. Common law
CAUTION rules apply to determine whether you
are an employee or an independent contractor.
See Pub. 1779 and Pub. 15-A.

!

To claim the exemption, you must be able to
demonstrate that you meet the requirements of
either the international organization agreement
provision or U.S. tax law. You should know the
article number of the international organization
agreement tax exemption provision, if one exists, and the number of the Executive Order
designating the organization as an international
organization.
Aliens who keep immigrant (lawful permanent resident) status. If you sign the waiver
provided by section 247(b) of the Immigration
and Nationality Act (USCIS Form I-508) to keep
your lawful permanent resident status (green
card), you no longer qualify for the tax exemption under U.S. tax law from the date of filing the
waiver.
If you are an employee of a foreign
government or international organizaCAUTION tion who holds a green card, to claim
the exemption under U.S. tax law you must also
be able to demonstrate with written evidence
from the USCIS that you have not signed and
filed USCIS Form I-508.

!

Note. The filing of Form I-508 has no effect
on a tax exemption that is not dependent upon
the provisions of U.S. tax law. You do not lose
the tax exemption if you file the waiver and
meet either of the following conditions.
• You work for a foreign government and are
exempt from U.S. tax under an income tax
treaty, consular convention, Vienna Conventions, or any other international agreement between the United States and your
foreign government employer.
• You work for an international organization
and the international organization agreement creating the international

organization provides that alien employees
are exempt from U.S. income tax. Two international organizations that have such a
provision are the International Monetary
Fund (IMF) and the International Bank for
Reconstruction and Development (World
Bank).

Aliens Not Required
To Obtain Sailing
or Departure Permits
If you are included in one of the following categories, you do not have to get a sailing or departure permit before leaving the United States.

11.
Departing Aliens
and the Sailing
or Departure
Permit
Introduction
Before leaving the United States, all aliens (except those listed under Aliens Not Required To
Obtain Sailing or Departure Permits) must obtain a certificate of compliance. This document,
also popularly known as the sailing permit or
departure permit, is part of the income tax form
you must file before leaving. You will receive a
sailing or departure permit after filing a Form
1040-C or Form 2063. These forms are discussed in this chapter.
To find out if you need a sailing or departure
permit, first read Aliens Not Required To Obtain
Sailing or Departure Permits, later. If you do not
fall into one of the categories in that discussion,
you must obtain a sailing or departure permit.
Read Aliens Required To Obtain Sailing or Departure Permits, later.

Topics

This chapter discusses:

• Who needs a sailing permit,
• How to get a sailing permit, and
• Forms you file to get a sailing permit.

Useful Items

You may want to see:
Form (and Instructions)
1040-C U.S. Departing Alien Income Tax
Return
1040-C

2063 U.S. Departing Alien Income Tax
Statement
2063

See chapter 12 for information about getting
these forms.

If you are in one of these categories and do
not have to get a sailing or departure permit,
you must be able to support your claim for exemption with proper identification or give the
authority for the exemption.
Category 1. Representatives of foreign governments with diplomatic passports, whether
accredited to the United States or other countries, members of their households, and servants accompanying them. Servants who are
leaving, but not with a person with a diplomatic
passport, must get a sailing or departure permit.
However, they can get a sailing or departure
permit on Form 2063 without examination of
their income tax liability by presenting a letter
from the chief of their diplomatic mission certifying that:
• Their name appears on the “White List” (a
list of employees of diplomatic missions);
and
• They do not owe to the United States any
income tax, and will not owe any tax up to
and including the intended date of departure.
The statement must be presented to an IRS
office.
Category 2. Employees of international organizations and foreign governments (other than
diplomatic representatives exempt under category 1) and members of their households:
• Whose compensation for official services
is exempt under U.S. tax law (described in
chapter 10), and
• Who receive no other income from U.S.
sources.
If you are an alien in category (1) or (2)
above who filed the waiver under secCAUTION tion 247(b) of the Immigration and Nationality Act, you must get a sailing or departure
permit. This is true even if your income is exempt from U.S. tax because of an income tax
treaty, consular agreement, or international
agreement.

!

Category 3. Alien students, industrial trainees, and exchange visitors, including their
spouses and children, who enter on an “F-1,”
“F-2,” “H-3,” “H-4,” “J-1,” “J-2,” or “Q” visa only
and who receive no income from U.S. sources
while in the United States under those visas
other than:
• Allowances to cover expenses incident to
study or training in the United States, such
as expenses for travel, maintenance, and
tuition;
• The value of any services or food and
lodging connected with this study or training;
• Income from employment authorized by
the U.S. USCIS; or
Chapter 11

• Interest income on deposits that is not effectively connected with a U.S. trade or
business. (See Interest Income in chapter 3.)

Category 4. Alien students, including their
spouses and children, who enter on an “M-1” or
“M-2” visa only and who receive no income
from U.S. sources while in the United States under those visas, other than:
• Income from employment authorized by
the USCIS, or
• Interest income on deposits that is not effectively connected with a U.S. trade or
business. (See Interest Income in chapter 3.)
Category 5. Certain other aliens temporarily
in the United States who have received no taxable income during the tax year up to and including the date of departure or during the preceding tax year. If the IRS has reason to believe
that an alien has received income subject to tax
and that the collection of income tax is jeopardized by departure, it may then require the alien
to obtain a sailing or departure permit. Aliens in
this category are:
1. Alien military trainees who enter the United States for training under the sponsorship of the Department of Defense and
who leave the United States on official
military travel orders;
2. Alien visitors for business on a “B-1” visa,
or on both a “B-1” visa and a “B-2” visa,
who do not remain in the United States or
a U.S. possession for more than 90 days
during the tax year;
3. Alien visitors for pleasure on a “B-2” visa;
4. Aliens in transit through the United States
or any of its possessions on a “C-1” visa,
or under a contract, such as a bond agreement, between a transportation line and
the Attorney General; and
5. Aliens who enter the United States on a
border-crossing identification card or for
whom passports, visas, and border-crossing identification cards are not required, if
they are:
a. Visitors for pleasure,
b. Visitors for business who do not remain in the United States or a U.S.
possession for more than 90 days
during the tax year, or
c. In transit through the United States or
any of its possessions.
Category 6. Alien residents of Canada or
Mexico who frequently commute between that
country and the United States for employment,
and whose wages are subject to the withholding
of U.S. tax.

Aliens Required To
Obtain Sailing or
Departure Permits
If you do not fall into one of the categories listed
earlier under Aliens Not Required To Obtain

Departing Aliens and the Sailing or Departure Permit

Page 49

Sailing or Departure Permits, you must obtain a
sailing or departure permit. To obtain a permit,
file Form 1040-C or Form 2063 (whichever applies) with your local IRS office before you leave
the United States. See Forms To File, later. You
must also pay all the tax shown as due on Form
1040-C and any taxes due for past years. See
Paying Taxes and Obtaining Refunds, later.

Getting a Sailing
or Departure Permit
The following discussion covers how to get your
sailing permit.

When and Where To Get a Sailing
or Departure Permit
To get a certificate of compliance, you must go
to an IRS office at least 2 weeks before you
leave the United States and file either Form
2063 or Form 1040-C and any other required
tax returns that have not been filed. The certificate may not be issued more than 30 days before you leave. If both you and your spouse are
aliens and both of you are leaving the United
States, both of you must go to the IRS office.
To find an IRS office, go to IRS.gov/Help/
Contact-Your-Local-IRS-Office, click on the
Taxpayer Assistance Center Office Locator,
and find “Services Provided” at the nearest Taxpayer Assistance Center (TAC) to see if the
Alien Clearance (Sailing Permits) service is
available at that office. Please note that all
TACs operate by appointment. Services are
limited and not all services are available at every TAC office.
Call 844-545-5640 to schedule an appointment. Remember that you must
CAUTION visit an IRS office at least 2 weeks (but
no more than 30 days) before you leave the
United States, so make sure you call for an appointment well before those time frames.
Please be prepared to furnish your anticipated
date of departure and bring all necessary documentation with you.

!

Documents To Submit
Getting your sailing or departure permit will go
faster if you bring to the IRS office documents
and papers related to your income and your
stay in the United States. Bring the following records with you if they apply.
1. Your passport and alien registration card
or visa.
2. Copies of your U.S. income tax returns
filed for the past 2 years. If you were in the
United States for less than 2 years, bring
the income tax returns you filed for that period.
3. Receipts for income taxes paid on these
returns.
4. Receipts, bank records, canceled checks,
and other documents that prove your deductions, business expenses, and dependents claimed on your returns.
Page 50

Chapter 11

5. A statement from each employer showing
wages paid and tax withheld from January
1 of the current year to the date of departure if you were an employee. If you were
self-employed, you must bring a statement
of income and expenses up to the date
you plan to leave.
6. Proof of estimated tax payments for the
past year and this year.
7. Documents showing any gain or loss from
the sale of personal property and/or real
property, including capital assets and merchandise.
8. Documents relating to scholarship or fellowship grants, including:
a. Verification of the grantor, source, and
purpose of the grant.
b. Copies of the application for, and approval of, the grant.
c. A statement of the amount paid, and
your duties and obligations under the
grant.
d. A list of any previous grants.
9. Documents indicating you qualify for any
special tax treaty benefits claimed.
10. Document verifying your date of departure
from the United States, such as an airline
ticket.
11. Document verifying your U.S. TIN, such as
a social security card or an IRS-issued Notice CP 565 showing your ITIN.
Note. If you are married and reside in a
community property state, also bring the
above-listed documents for your spouse. This
applies whether or not your spouse requires a
permit.

Forms To File
If you must get a sailing or departure permit,
you must file Form 2063 or Form 1040-C. Employees in the IRS office can assist in filing
these forms. Both forms have a “certificate of
compliance” section. When the certificate of
compliance is signed by an agent of the Field
Assistance Area Director, it certifies that your
U.S. tax obligations have been satisfied according to available information. Your Form 1040-C
copy of the signed certificate, or the one detached from Form 2063, is your sailing or departure permit.

Form 2063
This is a short form that asks for certain information but does not include a tax computation.
The following departing aliens can get their sailing or departure permits by filing Form 2063.
• Aliens, whether resident or nonresident,
who have had no taxable income for the
tax year up to and including the date of departure and for the preceding year, if the
period for filing the income tax return for
that year has not expired.
• Resident aliens who have received taxable
income during the tax year or preceding
year and whose departure will not hinder
the collection of any tax. However, if the

Departing Aliens and the Sailing or Departure Permit

IRS has information indicating that the aliens are leaving to avoid paying their income tax, they must file a Form 1040-C.
Aliens in either of these categories who
have not filed an income tax return or paid income tax for any tax year must file the return
and pay the income tax before they can be issued a sailing or departure permit on Form
2063.
The sailing or departure permit detached
from Form 2063 can be used for all departures
during the current year. However, the IRS may
cancel the sailing or departure permit for any
later departure if it believes the collection of income tax is jeopardized by that later departure.

Form 1040-C
If you must get a sailing or departure permit and
you do not qualify to file Form 2063, you must
file Form 1040-C.
Ordinarily, all income received, or reasonably expected to be received, during the tax year
up to and including the date of departure must
be reported on Form 1040-C, and the tax on it
must be paid. When you pay any tax shown as
due on the Form 1040-C, and you file all returns
and pay all tax due for previous years, you will
receive a sailing or departure permit. However,
the IRS may permit you to furnish a bond guaranteeing payment instead of paying the taxes
for certain years. See Bond To Ensure Payment, later. The sailing or departure permit issued under the conditions in this paragraph is
only for the specific departure for which it is issued.
Returning to the United States. If you furnish the IRS with information showing, to the
satisfaction of the IRS, that you intend to return
to the United States and that your departure
does not jeopardize the collection of income
tax, you can get a sailing or departure permit by
filing Form 1040-C without having to pay the tax
shown on it. You must, however, file all income
tax returns that have not yet been filed as required, and pay all income tax that is due on
these returns.
Your Form 1040-C must include all income
received, and reasonably expected to be received, during the entire year of departure. The
sailing or departure permit issued with this Form
1040-C can be used for all departures during
the current year. However, the IRS may cancel
the sailing or departure permit for any later departure if the payment of income tax appears to
be in jeopardy.
Joint return on Form 1040-C. Departing
husbands and wives who are nonresident aliens cannot file joint returns. However, if both
spouses are resident aliens, they can file a joint
return on Form 1040-C if:
• Both spouses can reasonably be expected
to qualify to file a joint return at the normal
close of their tax year, and
• The tax years of the spouses end at the
same time.

Paying Taxes and
Obtaining Refunds
You must pay all tax shown as due on the Form
1040-C at the time of filing it, except when a
bond is furnished, or the IRS is satisfied that
your departure does not jeopardize the collection of income tax. You must also pay any taxes
due for past years. If the tax computation on
Form 1040-C results in an overpayment, there
is no tax to pay at the time you file that return.
However, the IRS cannot provide a refund at
the time of departure. If you are due a refund,
you must file Form 1040-NR at the end of the
tax year.

Bond To Ensure Payment
Usually, you must pay the tax shown as due on
Form 1040-C when you file it. However, if you
pay all taxes due that you owe for prior years,
you can furnish a bond guaranteeing payment
instead of paying the income taxes shown as
due on the Form 1040-C or the tax return for the
preceding year if the period for filing that return
has not expired.
The bond must equal the tax due plus interest to the date of payment as figured by the
IRS. Information about the form of bond and security on it can be obtained from your IRS office.

Filing Annual U.S.
Income Tax Returns
Form 1040-C is not an annual U.S. income tax
return. If an income tax return is required by
law, that return must be filed even though a
Form 1040-C has already been filed. Chapter 5
and chapter 7 discuss filing an annual U.S. income tax return. The tax paid with Form 1040-C
should be taken as a credit against the tax liability for the entire tax year on your annual U.S. income tax return.

12.
How To Get Tax
Help
Assistance for overseas taxpayers is available
in the U.S and certain foreign locations.

Taxpayer Assistance
Inside the United States
If you have questions about a tax issue; need
help preparing your tax return; or want to download free publications, forms, or instructions, go
to IRS.gov to find resources that can help you
right away.

Preparing and filing your tax return. After
receiving all your wage and earnings statements (Forms W-2, W-2G, 1099-R, 1099-MISC,
1099-NEC, etc.); unemployment compensation
statements (by mail or in a digital format) or
other government payment statements (Form
1099-G); and interest, dividend, and retirement
statements from banks and investment firms
(Forms 1099), you have several options to
choose from to prepare and file your tax return.
You can prepare the tax return yourself, see if
you qualify for free tax preparation, or hire a tax
professional to prepare your return.
Free options for tax preparation. Go to
IRS.gov to see your options for preparing and
filing your return online or in your local community, if you qualify, which include the following.
• Free File. This program lets you prepare
and file your federal individual income tax
return for free using brand-name tax-preparation-and-filing software or Free File fillable forms. However, state tax preparation
may not be available through Free File. Go
to IRS.gov/FreeFile to see if you qualify for
free online federal tax preparation, e-filing,
and direct deposit or payment options.
• VITA. The Volunteer Income Tax Assistance (VITA) program offers free tax help
to people with low-to-moderate incomes,
persons with disabilities, and limited-English-speaking taxpayers who need help
preparing their own tax returns. Go to
IRS.gov/VITA, download the free IRS2Go
app, or call 800-906-9887 for information
on free tax return preparation.
• TCE. The Tax Counseling for the Elderly
(TCE) program offers free tax help for all
taxpayers, particularly those who are 60
years of age and older. TCE volunteers
specialize in answering questions about
pensions and retirement-related issues
unique to seniors. Go to IRS.gov/TCE,
download the free IRS2Go app, or call
888-227-7669 for information on free tax
return preparation.
• MilTax. Members of the U.S. Armed
Forces and qualified veterans may use MilTax, a free tax service offered by the Department of Defense through Military OneSource. For more information, go to
MilitaryOneSource (MilitaryOneSource.mil/
MilTax).
Also, the IRS offers Free Fillable
Forms, which can be completed online and
then filed electronically regardless of income.
Using online tools to help prepare your return. Go to IRS.gov/Tools for the following.
• The Earned Income Tax Credit Assistant
(IRS.gov/EITCAssistant) determines if
you’re eligible for the earned income credit
(EIC).
• The Online EIN Application (IRS.gov/EIN)
helps you get an employer identification
number (EIN) at no cost.
• The Tax Withholding Estimator (IRS.gov/
W4app) makes it easier for you to estimate
the federal income tax you want your employer to withhold from your paycheck.
This is tax withholding. See how your with-

holding affects your refund, take-home
pay, or tax due.

• The First-Time Homebuyer Credit Account

Look-up (IRS.gov/HomeBuyer) tool provides information on your repayments and
account balance.
• The Sales Tax Deduction Calculator
(IRS.gov/SalesTax) figures the amount you
can claim if you itemize deductions on
Schedule A (Form 1040).

Getting answers to your tax questions. On IRS.gov, you can get
up-to-date information on current
events and changes in tax law.

• IRS.gov/Help: A variety of tools to help you

get answers to some of the most common
tax questions.
• IRS.gov/ITA: The Interactive Tax Assistant,
a tool that will ask you questions and,
based on your input, provide answers on a
number of tax law topics.
• IRS.gov/Forms: Find forms, instructions,
and publications. You will find details on
the most recent tax changes and interactive links to help you find answers to your
questions.
• You may also be able to access tax law information in your electronic filing software.
Need someone to prepare your tax return?
There are various types of tax return preparers,
including enrolled agents, certified public accountants (CPAs), accountants, and many others who don’t have professional credentials. If
you choose to have someone prepare your tax
return, choose that preparer wisely. A paid tax
preparer is:
• Primarily responsible for the overall substantive accuracy of your return,
• Required to sign the return, and
• Required to include their preparer tax identification number (PTIN).
Although the tax preparer always signs the
return, you're ultimately responsible for providing all the information required for the preparer
to accurately prepare your return. Anyone paid
to prepare tax returns for others should have a
thorough understanding of tax matters. For
more information on how to choose a tax preparer, go to Tips for Choosing a Tax Preparer
on IRS.gov.
Coronavirus. Go to IRS.gov/Coronavirus for
links to information on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses,
and tax-exempt organizations.
Employers can register to use Business
Services Online. The Social Security Administration (SSA) offers online service at SSA.gov/
employer for fast, free, and secure online W-2
filing options to CPAs, accountants, enrolled
agents, and individuals who process Form W-2,
Wage and Tax Statement, and Form W-2c,
Corrected Wage and Tax Statement.
IRS social media. Go to IRS.gov/SocialMedia
to see the various social media tools the IRS
uses to share the latest information on tax
changes, scam alerts, initiatives, products, and
services. At the IRS, privacy and security are
Chapter 12

How To Get Tax Help

Page 51

our highest priority. We use these tools to share
public information with you. Don’t post your social security number (SSN) or other confidential
information on social media sites. Always protect your identity when using any social networking site.
The following IRS YouTube channels provide short, informative videos on various tax-related topics in English, Spanish, and ASL.
• Youtube.com/irsvideos.
• Youtube.com/irsvideosmultilingua.
• Youtube.com/irsvideosASL.
Watching IRS videos. The IRS Video portal
(IRSVideos.gov) contains video and audio presentations for individuals, small businesses,
and tax professionals.
Online tax information in other languages.
You can find information on IRS.gov/
MyLanguage if English isn’t your native language.
Free Over-the-Phone Interpreter (OPI) Service. The IRS is committed to serving our multilingual customers by offering OPI services. The
OPI Service is a federally funded program and
is available at Taxpayer Assistance Centers
(TACs), other IRS offices, and every VITA/TCE
return site. The OPI Service is accessible in
more than 350 languages.
Accessibility Helpline available for taxpayers with disabilities. Taxpayers who need information about accessibility services can call
833-690-0598. The Accessibility Helpline can
answer questions related to current and future
accessibility products and services available in
alternative media formats (for example, braille,
large print, audio, etc.). The Accessibility Helpline does not have access to your IRS account.
For help with tax law, refunds, or account-related issues, go to IRS.gov/LetUsHelp.
Note. Form 9000, Alternative Media Preference, or Form 9000(SP) allows you to elect to
receive certain types of written correspondence
in the following formats.
• Standard Print.

•
•
•
•
•

Large Print.
Braille.
Audio (MP3).
Plain Text File (TXT).
Braille Ready File (BRF).

Disasters. Go to Disaster Assistance and
Emergency Relief for Individuals and
Businesses to review the available disaster tax
relief.
Getting tax forms and publications. Go to
IRS.gov/Forms to view, download, or print all
the forms, instructions, and publications you
may need. Or, you can go to IRS.gov/
OrderForms to place an order.
Getting tax publications and instructions in
eBook format. You can also download and
view popular tax publications and instructions
(including the Instructions for Form 1040) on
mobile devices as eBooks at IRS.gov/eBooks.

Page 52

Chapter 12

How To Get Tax Help

Note. IRS eBooks have been tested using
Apple's iBooks for iPad. Our eBooks haven’t
been tested on other dedicated eBook readers,
and eBook functionality may not operate as intended.
Access your online account (individual taxpayers only). Go to IRS.gov/Account to securely access information about your federal tax
account.
• View the amount you owe and a breakdown by tax year.
• See payment plan details or apply for a
new payment plan.
• Make a payment or view 5 years of payment history and any pending or scheduled payments.
• Access your tax records, including key
data from your most recent tax return, and
transcripts.
• View digital copies of select notices from
the IRS.
• Approve or reject authorization requests
from tax professionals.
• View your address on file or manage your
communication preferences.
Tax Pro Account. This tool lets your tax professional submit an authorization request to access your individual taxpayer IRS online
account. For more information, go to IRS.gov/
TaxProAccount.
Using direct deposit. The fastest way to receive a tax refund is to file electronically and
choose direct deposit, which securely and electronically transfers your refund directly into your
financial account. Direct deposit also avoids the
possibility that your check could be lost, stolen,
destroyed, or returned undeliverable to the IRS.
Eight in 10 taxpayers use direct deposit to receive their refunds. If you don’t have a bank account, go to IRS.gov/DirectDeposit for more information on where to find a bank or credit
union that can open an account online.
Getting a transcript of your return. The
quickest way to get a copy of your tax transcript
is to go to IRS.gov/Transcripts. Click on either
“Get Transcript Online” or “Get Transcript by
Mail” to order a free copy of your transcript. If
you prefer, you can order your transcript by calling 800-908-9946.
Reporting and resolving your tax-related
identity theft issues.
• Tax-related identity theft happens when
someone steals your personal information
to commit tax fraud. Your taxes can be affected if your SSN is used to file a fraudulent return or to claim a refund or credit.

• The IRS doesn’t initiate contact with tax-

payers by email, text messages (including
shortened links), telephone calls, or social
media channels to request or verify personal or financial information. This includes requests for personal identification
numbers (PINs), passwords, or similar information for credit cards, banks, or other
financial accounts.
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft Central webpage, for information
on identity theft and data security protection for taxpayers, tax professionals, and

businesses. If your SSN has been lost or
stolen or you suspect you’re a victim of
tax-related identity theft, you can learn
what steps you should take.
• Get an Identity Protection PIN (IP PIN). IP
PINs are six-digit numbers assigned to taxpayers to help prevent the misuse of their
SSNs on fraudulent federal income tax returns. When you have an IP PIN, it prevents someone else from filing a tax return
with your SSN. To learn more, go to
IRS.gov/IPPIN.
Ways to check on the status of your refund.
• Go to IRS.gov/Refunds.
• Download the official IRS2Go app to your
mobile device to check your refund status.
• Call the automated refund hotline at
800-829-1954.
Note. The IRS can’t issue refunds before
mid-February for returns that claimed the EIC or
the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits.
Making a tax payment. Go to IRS.gov/
Payments for information on how to make a
payment using any of the following options.
• IRS Direct Pay: Pay your individual tax bill
or estimated tax payment directly from
your checking or savings account at no
cost to you.
• Debit or Credit Card: Choose an approved
payment processor to pay online or by
phone.
• Electronic Funds Withdrawal: Schedule a
payment when filing your federal taxes using tax return preparation software or
through a tax professional.
• Electronic Federal Tax Payment System:
Best option for businesses. Enrollment is
required.
• Check or Money Order: Mail your payment
to the address listed on the notice or instructions.
• Cash: You may be able to pay your taxes
with cash at a participating retail store.
• Same-Day Wire: You may be able to do
same-day wire from your financial institution. Contact your financial institution for
availability, cost, and time frames.
Note. The IRS uses the latest encryption
technology to ensure that the electronic payments you make online, by phone, or from a
mobile device using the IRS2Go app are safe
and secure. Paying electronically is quick, easy,
and faster than mailing in a check or money order.
What if I can’t pay now? Go to IRS.gov/
Payments for more information about your options.
• Apply for an online payment agreement
(IRS.gov/OPA) to meet your tax obligation
in monthly installments if you can’t pay
your taxes in full today. Once you complete
the online process, you will receive immediate notification of whether your agreement has been approved.
• Use the Offer in Compromise Pre-Qualifier
to see if you can settle your tax debt for
less than the full amount you owe. For

more information on the Offer in Compromise program, go to IRS.gov/OIC.
Filing an amended return. Go to IRS.gov/
Form1040X for information and updates.
Checking the status of your amended return. Go to IRS.gov/WMAR to track the status
of Form 1040-X amended returns.
Note. It can take up to 3 weeks from the
date you filed your amended return for it to
show up in our system, and processing it can
take up to 16 weeks.
Understanding an IRS notice or letter
you’ve received. Go to IRS.gov/Notices to
find additional information about responding to
an IRS notice or letter.
Note. You can use Schedule LEP (Form
1040), Request for Change in Language Preference, to state a preference to receive notices,
letters, or other written communications from
the IRS in an alternative language. You may not
immediately receive written communications in
the requested language. The IRS’s commitment
to LEP taxpayers is part of a multi-year timeline
that is scheduled to begin providing translations
in 2023. You will continue to receive communications, including notices and letters in English
until they are translated to your preferred language.
Contacting your local IRS office. Keep in
mind, many questions can be answered on
IRS.gov without visiting an IRS TAC. Go to
IRS.gov/LetUsHelp for the topics people ask
about most. If you still need help, IRS TACs
provide tax help when a tax issue can’t be handled online or by phone. All TACs now provide
service by appointment, so you’ll know in advance that you can get the service you need
without long wait times. Before you visit, go to
IRS.gov/TACLocator to find the nearest TAC
and to check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on “Local Offices.”

The Taxpayer Advocate
Service (TAS) Is Here To
Help You

is treated fairly and that you know and understand your rights under the Taxpayer Bill of
Rights.

How Can You Learn About Your
Taxpayer Rights?
The Taxpayer Bill of Rights describes 10 basic
rights that all taxpayers have when dealing with
the IRS. Go to TaxpayerAdvocate.IRS.gov to
help you understand what these rights mean to
you and how they apply. These are your rights.
Know them. Use them.

What Can TAS Do for You?
TAS can help you resolve problems that you
can’t resolve with the IRS. And their service is
free. If you qualify for their assistance, you will
be assigned to one advocate who will work with
you throughout the process and will do everything possible to resolve your issue. TAS can
help you if:
• Your problem is causing financial difficulty
for you, your family, or your business;
• You face (or your business is facing) an
immediate threat of adverse action; or
• You’ve tried repeatedly to contact the IRS
but no one has responded, or the IRS
hasn’t responded by the date promised.

certain level and need to resolve tax problems
with the IRS, such as audits, appeals, and tax
collection disputes. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language.
Services are offered for free or a small fee for
eligible taxpayers. To find an LITC near you, go
to TaxpayerAdvocate.IRS.gov/about-us/LowIncome-Taxpayer-Clinics-LITC or see IRS Pub.
4134, Low Income Taxpayer Clinic List.

Taxpayer Assistance
Outside the United
States
toll free.

If you are outside the United States,
you can call 267-941-1000 (English-speaking only). This number is not
If you wish to write instead of calling,
please address your letter to:

Internal Revenue Service
International Accounts
Philadelphia, PA 19255-0725
U.S.A.

How Can You Reach TAS?
TAS has offices in every state, the District of
Columbia, and Puerto Rico. Your local advocate’s number is in your local directory and at
TaxpayerAdvocate.IRS.gov/Contact-Us.
You
can also call them at 877-777-4778.

How Else Does TAS Help
Taxpayers?
TAS works to resolve large-scale problems that
affect many taxpayers. If you know of one of
these broad issues, report it to them at IRS.gov/
SAMS.

TAS for Tax Professionals

What Is TAS?

TAS can provide a variety of information for tax
professionals, including tax law updates and
guidance, TAS programs, and ways to let TAS
know about systemic problems you’ve seen in
your practice.

TAS is an independent organization within the
IRS that helps taxpayers and protects taxpayer
rights. Their job is to ensure that every taxpayer

Low Income Taxpayer
Clinics (LITCs)

Additional contacts for taxpayers who live outside the United States are available at
IRS.gov/uac/Contact-My-Local-OfficeInternationally.
Taxpayer Advocate Service (TAS). If you
live outside the United States, you can call TAS
at 787-522-8601 in English or 787-522-8600 in
Spanish. You can contact the Taxpayer Advocate at:
Internal Revenue Service
Taxpayer Advocate Service
City View Plaza, 48 Carr 165,
Guaynabo, P.R. 00968-8000
You can call TAS toll free at 877-777-4778.
For more information on TAS and contacts if
you are outside of the United States, go to
IRS.gov/Advocate/Local-Taxpayer-Advocate/
Contact-Your-Local-Taxpayer-Advocate.

LITCs are independent from the IRS. LITCs
represent individuals whose income is below a

Chapter 12

How To Get Tax Help

Page 53

Frequently Asked Questions
This section answers tax-related I am a nonresident alien with no
questions commonly asked by ali- dependents. I am working temens.
porarily for a U.S. company.
What return do I file?
What is the difference between a
resident alien and a nonresident You must file Form 1040-NR if you
alien for tax purposes?
are engaged in a trade or business
For tax purposes, an alien is an individual who is not a U.S. citizen. Aliens are classified as resident aliens
and nonresident aliens. Resident
aliens are taxed on their worldwide
income, the same as U.S. citizens.
Nonresident aliens are taxed only
on their U.S. source income and
certain foreign source income that is
effectively connected with a U.S.
trade or business.
What is the difference between
the taxation of income that is effectively connected with a trade
or business in the United States
and income that is not effectively
connected with a trade or business in the United States?
The difference between these two
categories is that effectively connected income, after allowable deductions, is taxed at graduated
rates. These are the same rates that
apply to U.S. citizens and residents.
Income that is not effectively connected is taxed at a flat 30% (or
lower treaty) rate.

If you are a U.S. citizen or resident and you choose to treat your
nonresident spouse as a resident
and file a joint tax return, your nonresident spouse needs an SSN or
in the United States, or have any an ITIN. Alien spouses who are
other U.S. source income on which claimed as dependents are also retax was not fully paid by the amount quired to furnish an SSN or ITIN.
withheld.
See Identification Number in
chapter
5 for more information.
I came to the United States on

June 30 of last year. I have an
I am a nonresident alien. Can I
H-1B visa. What is my tax status,
file a joint return with my
resident alien or nonresident alispouse?
en? What tax return do I file?
You were a dual-status alien last
year. As a general rule, because
you were in the United States for
183 days or more, you have met the
substantial presence test and you
are taxed as a resident. However,
for the part of the year that you were
not present in the United States, you
are a nonresident. File Form 1040
or 1040-SR. Enter “Dual-Status Return” across the top. Attach a statement showing your U.S. source income for the part of the year you
were a nonresident. You may use
Form 1040-NR as the statement.
Enter
“Dual-Status
Statement”
across the top. See First Year of
Residency in chapter 1 for rules on
determining your residency starting
date.

I am a student with an F-1 visa. I
was told that I was an exempt in- When is my Form 1040-NR due?
dividual. Does this mean I am exempt from paying U.S. tax?
If you are an employee and you receive wages subject to U.S. income
The term “exempt individual” does tax withholding, you must generally
not refer to someone exempt from file by the 15th day of the 4th month
U.S. tax. You were referred to as an after your tax year ends. If you file
“exempt individual”because as a for the 2022 calendar year, your restudent temporarily in the United turn is due April 18, 2023.
States on an F visa, you do not have
to count the days you were present
If you are not an employee who
in the United States as a student receives wages subject to U.S. induring the first 5 years in determin- come tax withholding, you must file
ing if you are a resident alien under by the 15th day of the 6th month afthe substantial presence test. See ter your tax year ends. For the 2022
chapter 1.
calendar year, file your return by
June 15, 2023. For more informaI am a resident alien. Can I claim tion on when to file and where to file,
any treaty benefits?
see chapter 7.
Generally, you cannot claim tax
treaty benefits as a resident alien.
However, there are exceptions. See
Effect of Tax Treaties in chapter 1.
See also Resident Aliens under
Some Typical Tax Treaty Benefits in
chapter 9.

Page 54

must apply for an individual tax- income tax liability for a dual-status
payer identification number (ITIN).
tax year, see chapter 6.

My spouse is a nonresident alien. Does he need a social security number?
A social security number (SSN)
must be furnished on returns, statements, and other tax-related documents. If your spouse does not have
and is not eligible to get an SSN, he

Generally, you cannot file as married filing jointly if either spouse was
a nonresident alien at any time during the tax year.
However, nonresident aliens
married to U.S. citizens or residents
can choose to be treated as U.S.
residents and file joint returns. For
more information on this choice, see
Nonresident Spouse Treated as a
Resident in chapter 1.
I have an H-1B visa and my husband has an F-1 visa. We both
lived in the United States all of
last year and had income. What
kind of form should we file? Do
we file separate returns or a joint
return?
Assuming both of you had these visas for all of last year, you are a resident alien. Your husband is a nonresident alien if he has not been in
the United States as a student for
more than 5 years. You and your
husband can file a joint tax return on
Form 1040 or 1040-SR if he makes
the choice to be treated as a resident for the entire year. See Nonresident Spouse Treated as a Resident in chapter 1. If your husband
does not make this choice, you
must file a separate return on Form
1040 or 1040-SR. Your husband
must file Form 1040-NR.

I am a nonresident alien and invested money in the U.S. stock
market through a U.S. brokerage
company. Are the dividends and
the capital gains taxable? If yes,
how are they taxed?
The following rules apply if the dividends and capital gains are not effectively connected with a U.S.
trade or business.
• Capital gains are generally not
taxable if you were in the United States for less than 183
days during the year. See
Sales or Exchanges of Capital
Assets in chapter 4 for more information and exceptions.
• Dividends are generally taxed
at a 30% (or lower treaty) rate.
The brokerage company or
payer of the dividends should
withhold this tax at source. If
tax is not withheld at the correct rate, you must file Form
1040-NR to receive a refund or
pay any additional tax due.
If the capital gains and dividends
are effectively connected with a
U.S. trade or business, they are
taxed according to the same rules
and at the same rates that apply to
U.S. citizens and residents.
I am a nonresident alien. I receive U.S. social security benefits. Are my benefits taxable?
If you are a nonresident alien, 85%
of any U.S. social security benefits
(and the equivalent portion of tier 1
railroad retirement benefits) you receive is subject to the flat 30% tax,
unless exempt, or subject to a lower
treaty rate. See The 30% Tax in
chapter 4.
Do I have to pay taxes on my
scholarship?

If you are a nonresident alien and
Is a “dual-resident taxpayer” the the scholarship is not from U.S.
same as a “dual-status taxpay- sources, it is not subject to U.S. tax.
See Scholarships, Grants, Prizes,
er”?
and Awards in chapter 2 to determine whether your scholarship is
No. A dual-resident taxpayer is one from U.S. sources.
who is a resident of both the United
States and another country under
If your scholarship is from U.S.
each country's tax laws. See Effect sources or you are a resident alien,
of Tax Treaties in chapter 1. You are your scholarship is subject to U.S.
a dual-status alien when you are tax according to the following rules.
both a resident alien and a nonresi• If you are a candidate for a dedent alien in the same year. For ingree, you may be able to
formation on determining the U.S.
exclude from your income the
Publication 519 (2022)

part of the scholarship you use
to pay for tuition, fees, books,
supplies, and equipment required by the educational institution. However, the part of the
scholarship you use to pay for
other expenses, such as room
and board, is taxable. See
Scholarships and Fellowship
Grants in chapter 3 for more information.
• If you are not a candidate for a
degree, your scholarship is taxable.

Nonresident aliens can claim some
of the same itemized deductions
that resident aliens can claim. However, nonresident aliens can claim
itemized deductions only if they
have income effectively connected
with their U.S. trade or business.
See Itemized Deductions in chapter 5.
I am
child.
2022.
come
turn?

single with a dependent
I was a dual-status alien in
Can I claim the earned incredit on my 2022 tax re-

I am a nonresident alien. Can I
claim the standard deduction?
If you are a nonresident alien for any
part of the year, you cannot claim
Nonresident aliens cannot claim the the earned income credit. See
standard deduction. However, see chapter 6 for more information on
Students and business apprentices dual-status aliens.
from India, under Itemized Deductions in chapter 5, for an exception. I am a nonresident alien student.
Can I claim an education credit
I am a dual-status taxpayer. Can on my Form 1040-NR?
I claim the standard deduction?
If you are a nonresident alien for any
part of the year, you generally cannot claim the education credits.
However, if you are married and
choose to file a joint return with a
U.S. citizen or resident spouse, you
I am filing Form 1040-NR. Can I may be eligible for these credits.
claim itemized deductions?
You cannot claim the standard deduction allowed on Form 1040 or
1040-SR. However, you can itemize
any allowable deductions.

Publication 519 (2022)

See Nonresident Spouse Treated Do not use Form 843 to request a
as a Resident in chapter 1.
refund of Additional Medicare Tax.
See Refund of Taxes Withheld in
I am a nonresident alien, tempo- Error in chapter 8.
rarily working in the U.S. under a
J visa. Am I subject to social se- I am an alien who will be leaving
curity and Medicare taxes?
the United States. What forms do
I have to file before I leave?
Generally, services you perform as
a nonresident alien temporarily in Before leaving the United States,
the United States as a nonimmigrant aliens must generally obtain a certifunder subparagraph (F), (J), (M), or icate of compliance. This document,
(Q) of section 101(a)(15) of the Im- also popularly known as the “sailing
migration and Nationality Act are not permit” or “departure permit,” is part
covered under the social security of the income tax form you must file
program if you perform the services before leaving. You will receive a
to carry out the purpose for which sailing or departure permit after filyou were admitted to the United ing a Form 1040-C or Form 2063.
States. See Social Security and These forms are discussed in chapMedicare Taxes in chapter 8.
ter 11.
I am a nonresident alien student. I filed a Form 1040-C when I left
Social security taxes were with- the United States. Do I still have
held from my pay in error. How to file an annual U.S. tax return?
do I get a refund of these taxes?
Form 1040-C is not an annual U.S.
If social security or Medicare taxes income tax return. If an income tax
were withheld in error from pay that return is required by law, you must
is not subject to these taxes, contact file that return even though you althe employer who withheld the ready filed a Form 1040-C. Chaptaxes for a refund. If you are unable ter 5 and chapter 7 discuss filing an
to get a full refund of the amount annual U.S. income tax return.
from your employer, file a claim for
refund with the IRS on Form 843.

Page 55

Appendix A—Tax Treaty Exemption Procedure for Students
This appendix contains the statements nonresident alien students
and trainees must file with Form
8233 to claim a tax treaty exemption from withholding of tax on
compensation for dependent personal services. For treaty countries
not listed, attach a statement in a
format similar to those for other
treaties. See chapter 8 for more information on withholding.

Belgium
1. I was a resident of Belgium on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am present in the United
States for the purpose of my
education or training.
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Belgium in
an amount not in excess of
$9,000 for any tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study or training]. For a
trainee who is temporarily
present in the United States
for the purpose of securing
training required to practice a
profession or professional
specialty, the treaty exemption is available only for compensation paid during a period of 2 years.

Bulgaria
1. I was a resident of Bulgaria
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study] or
Page 56

securing training to practice a
profession or professional
specialty.
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Bulgaria in
an amount not in excess of
$9,000 for any tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study or training]. The treaty
exemption for training is available only for compensation
paid during a period of 2
years.

China, People's
Republic of
1. I was a resident of the People's Republic of China on the
date of my arrival in the United States. I am not a U.S.
citizen.
2. I am present in the United
States solely for the purpose
of my education or training.
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and the People's Republic of China in an
amount not in excess of
$5,000 for any tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study or training]. I am claiming this exemption only for
such period of time as is reasonably necessary to complete the education or training.

Cyprus
1. I was a resident of Cyprus on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.

2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Cyprus in
an amount not in excess of
$2,000 ($10,000 if you are a
participant in a government
sponsored program of study
not exceeding 1 year) for any
tax year. I have not previously
claimed an income tax exemption under that treaty for
income received as a student
before the date of my arrival
in the United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The $2,000 treaty
exemption is available only
for compensation paid during
a period of 5 tax years beginning with the tax year that includes my arrival date, and
for such additional period of
time as is necessary to complete, as a full-time student,
educational requirements as
a candidate for a postgraduate or professional degree
from a recognized educational institution.

Czech Republic,
Estonia, Latvia,
Lithuania, and
Slovak Republic
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying or
training at
[insert the
name of the university or
other recognized educational

institution at which you study];
or, I am temporarily present in
the United States as a recipient of a grant, allowance, or
award from
[insert
the name of the nonprofit organization or government institution providing the grant,
allowance, or award].
3. I will receive compensation
for services performed in the
United States. This compensation qualifies for exemption
from withholding of federal income tax under the tax treaty
between the United States
[insert the
and
name of the country] in the
amount not in excess of
$5,000 ($10,000 if you are a
participant in a government
sponsored program of study
not exceeding 1 year) for any
tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The $5,000 treaty
exemption is available only
for compensation paid during
a period of 5 tax years beginning with the tax year that includes my arrival date.

Egypt
1. I was a resident of Egypt on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Egypt in an
amount not in excess of
$3,000 ($10,000 if you are a
participant in a government
sponsored program of study
not exceeding 1 year) for any
tax year. I have not previously
claimed an income tax
Publication 519 (2022)

exemption under that treaty
for income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The $3,000 treaty
exemption is available only
for compensation paid during
a period of 5 tax years beginning with the tax year that includes my arrival date, and
for such period of time as is
necessary to complete, as a
full-time student, educational
requirements as a candidate
for a postgraduate or professional degree from a recognized educational institution.

France
1. I was a resident of France on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the accredited university, college, school or other educational institution].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and France in
an amount not in excess of
$5,000 for any taxable year. I
have not previously claimed
an income tax exemption under this treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. I will be present in the United
States only for such period of
time as may be reasonably or
customarily required to effectuate the purpose of this visit.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational

Publication 519 (2022)

institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years.

Germany
1. I was a resident of Germany
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States as a student or business apprentice
for the purpose of full-time
study or training at
[insert the name of the accredited university, college,
school or other educational
institution]; or, I am temporarily present in the United
States as a recipient of a
grant, allowance, or award
from
[insert the
name of the nonprofit organization or government institution providing the grant, allowance, or award].
3. I will receive compensation
for dependent personal services performed in the United
States. This compensation
qualifies for exemption from
withholding of federal income
tax under the tax treaty between the United States and
Germany in an amount not in
excess of $9,000 for any tax
year, provided that such services are performed for the
purpose of supplementing
funds otherwise available for
my maintenance, education,
or training.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 4 tax years beginning
with the tax year that includes
my arrival date.

Iceland
1. I was a resident of Iceland on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.

2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study]; or, I am
temporarily present in the
United States to obtain professional training or to study
or do research as a recipient
of a grant, allowance, or
award from
[insert
the name of the nonprofit organization or government institution providing the grant,
allowance, or award].
3. I will receive compensation
for services performed in the
United States. This compensation qualifies for exemption
from withholding of federal income tax under the tax treaty
between the United States
and Iceland in the amount not
in excess of $9,000 for any
tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date.

Indonesia
1. I was a resident of Indonesia
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States solely for
the purpose of study at
[insert the name of
the university or other accredited educational institution at which you study]; or, I
am temporarily present in the
United States as a recipient of
a grant, allowance or award
from
[insert the
name of the nonprofit organization or government institution providing the grant, allowance, or award] for the
primary purpose of study, research, or training.
3. I will receive compensation
for services performed in the
United States. This compensation qualifies for exemption

from withholding of federal income tax under the tax treaty
between the United States
and Indonesia in an amount
not in excess of $2,000 for my
tax year, provided such services are performed in connection with my studies or are
necessary for my maintenance.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date.

Israel, Philippines,
and Thailand
1. I was a resident of the
[insert the name of
the country under whose
treaty you claim exemption]
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and
[insert the name of the country under whose treaty you
claim exemption] in an
amount not in excess of
$3,000 for any tax year. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a
Page 57

period of 5 tax years beginning with the tax year that includes my arrival date.

Korea, Norway,
Poland, and Romania
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other recognized educational institution
at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and
[insert the name of the country under whose treaty you
claim exemption] in an
amount not in excess of
$2,000 for any tax year. I
have not previously claimed
an income tax exemption under this treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date.

Morocco
1. I was a resident of Morocco
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
Page 58

the university or other recognized educational institution
at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Morocco in
an amount not in excess of
$2,000 for any tax year. I
have not previously claimed
an income tax exemption under that treaty for income received as a student before
the date of my arrival in the
United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years, beginning
with the tax year that includes
my arrival date.

Netherlands
1. I was a resident of the Netherlands on the date of my arrival
in the United States. I am not
a U.S. citizen. I have not been
lawfully accorded the privilege of residing permanently
in the United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of full time
study at
[insert the
name of the recognized university, college, or school in
the United States at which
you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and the Netherlands in an amount not in excess of $2,000 for any tax
year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. I am claiming this
exemption only for such period of time as is reasonably
necessary to complete my
education.

Pakistan
1. I am a resident of Pakistan. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant and would
not otherwise be considered
a resident alien for the relevant tax year.
2. I am temporarily present in
the United States solely as a
[insert
student at
the name of the recognized
university, college, or school
in the United States at which
you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Pakistan in
an amount not in excess of
$5,000 for any tax year.

Portugal and Spain
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying or
training at
[insert the
name of the university or
other recognized educational
institution at which you study];
or, I am temporarily present in
the United States as a recipient of a grant, allowance, or
award from
[insert
the name of the nonprofit organization or government institution providing the grant,
allowance, or award].
3. I will receive compensation
for services performed in the
United States. This compensation qualifies for exemption
from withholding of federal income tax under the tax treaty
between the United States
and
[Insert the
name of the country] in the
amount not in excess of
$5,000 for any tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning

study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date.

Slovenia and
Venezuela
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I am temporarily present in
the United States for the primary purpose of studying or
training at
[insert the
name of the university or
other accredited educational
institution at which you study
or train].
3. I will receive compensation
for services performed in the
United States. This compensation qualifies for exemption
from withholding of federal income tax under the tax treaty
between the United States
and
[insert the
name of the country under
whose treaty you claim exemption] in an amount not in
excess of $5,000 for any tax
year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date, and for such
period of time as is necessary
to complete, as a full-time student, educational requirements as a candidate for a
postgraduate or professional
degree from a recognized educational institution.

Trinidad and Tobago
1. I was a resident of Trinidad
and Tobago on the date of my
arrival in the United States. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant.
Publication 519 (2022)

2. I am temporarily present in
the United States for the primary purpose of studying at
[insert the name of
the university or other accredited educational institution at which you study].
3. I will receive compensation
for personal services performed in the United States.
This compensation qualifies
for exemption from withholding of federal income tax under the tax treaty between the
United States and Trinidad
and Tobago in an amount not
in excess of $2,000 (or, if you
are securing training required
to qualify you to practice a
profession or a professional
specialty, not in excess of
$5,000) for any tax year. I

Publication 519 (2022)

have not previously claimed
an income tax exemption under this treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. I will be present in the United
States only for such period of
time as may be reasonably or
customarily required to effectuate the purpose of this visit.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years.

Tunisia
1. I was a resident of Tunisia on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am temporarily present in
the United States for the purpose of full-time study, training, or research at
[insert the name of the university or other accredited educational institution at which
you study, train, or perform
research].

United States. This compensation qualifies for exemption
from withholding of federal income tax under the tax treaty
between the United States
and Tunisia in an amount not
in excess of $4,000 for any
tax year.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
study at the U.S. educational
institution]. The treaty exemption is available only for compensation paid during a period of 5 tax years beginning
with the tax year that includes
my arrival date.

3. I will receive compensation
for services performed in the

Page 59

Appendix B—Tax Treaty Exemption Procedure for Teachers and Researchers
This appendix contains the statements nonresident alien teachers
and researchers must file with
Form 8233 to claim a tax treaty exemption from withholding of tax on
compensation for dependent personal services. For treaty countries
not listed, attach a statement in a
format similar to those for other
treaties. See chapter 8 for more information on withholding.

Belgium
1. I am a resident of Belgium. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant.
2. I am visiting the United States
for the purpose of teaching or
engaging in research at
[insert the name of
the educational or research
institution at which you teach
or perform research] for a period not exceeding 2 years. I
will receive compensation for
my teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) for these activities qualifies for exemption
from withholding of federal
tax under the tax treaty between the United States and
Belgium.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research for
which exemption is claimed].
The treaty exemption is available only for compensation
received during a period of 2
years beginning on that date.

Bulgaria
1. I was a resident of Bulgaria
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
Page 60

2. I am visiting the United States
for the purpose of teaching or
conducting research at
[insert the name of
the university, college, or
other recognized educational
or research institution]. I will
receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) for these activities qualifies for exemption
from withholding of federal
tax under the tax treaty between the United States and
Bulgaria.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the services for which
the exemption is claimed].
The treaty exemption is available only for compensation
paid during a period of 2
years beginning on that date.

China, People's
Republic of
1. I was a resident of the People's Republic of China on the
date of my arrival in the United States. I am not a U.S.
citizen.
2. I am visiting the United States
for the primary purpose of
teaching, giving lectures, or
conducting research at
[insert the name of
the educational institution or
scientific research institution
at which you teach, lecture, or
conduct research], which is
an accredited educational institution or scientific research
institution. I will receive compensation for my teaching,
lecturing, or research activities.
3. The teaching, lecturing, or research compensation received during the entire tax
year (or during the period
from
to
) qualifies for exemption from withholding of federal tax under
the tax treaty between the

United States and the People's Republic of China. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, lecturer,
researcher, or student before
the date of my arrival in the
United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
your teaching, lecturing, or research activities]. The treaty
exemption is available only
for compensation received
during a maximum aggregate
period of 2 years.

Commonwealth of
Independent States
The treaty with the former Union of
Soviet Socialist Republics remains
in effect for the following countries:
Armenia, Azerbaijan, Belarus,
Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, and Uzbekistan.
1. I am a resident of
[insert the name of country]. I
am not a U.S. citizen.
2. I have accepted an invitation
by a governmental agency or
institution in the United
States, or by an educational
or scientific research institution in the United States, to
come to the United States for
the primary purpose of teaching, engaging in research, or
participating in scientific,
technical, or professional
conferences at
[insert the name of governmental agency or institution, educational or scientific
institution, or organization
sponsoring professional conference], which is a governmental agency or institution,
an educational or scientific institution, or an organization
sponsoring a professional
conference. I will receive
compensation for my teaching, research, or conference
activities.
3. The teaching, research, or
conference compensation received the entire tax year (or

for the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and the former Union of Soviet Socialist Republics. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, researcher, conference
participant, or student before
the date of my arrival in the
United States.
4. Any research I perform will
not be undertaken primarily
for the benefit of a private
person or commercial enterprise of the United States or a
foreign trade organization of
[insert the name of
country], unless the research
is conducted on the basis of
intergovernmental agreements on cooperations.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

Czech Republic and
Slovak Republic
1. I was a resident of the
[insert the name of
the country under whose
treaty you claim exemption]
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am visiting the United States
for the primary purpose of
teaching or conducting research at
[insert the
name of the educational or
scientific institution], which is
an accredited educational or
research institution. I will receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
Publication 519 (2022)

) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and the
[insert the
name of the country under
whose treaty you claim exemption]. I have not previously claimed an income tax
exemption under that treaty
for income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching, research, or
conference services for which
exemption is claimed]. The
treaty exemption is available
only for compensation received during a period of 2
years beginning on that date.

Egypt, Hungary,
Korea, Philippines,
Poland, and Romania
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I have accepted an invitation
by the U.S. Government (or
by a political subdivision or local authority thereof), or by a
university or other recognized
educational institution in the
United States for a period not
expected to exceed 2 years
for the purpose of teaching or
engaging in research at
[insert the name of
the educational institution],
which is a recognized educational institution. I will receive
compensation for my teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or for
the portion of the year from
to
) qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and
[insert
the name of the country under
Publication 519 (2022)

whose treaty you claim exemption]. I have not previously claimed an income tax
exemption under this treaty
for income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

France
1. I was a resident of France on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I have accepted an invitation
by the U.S. Government, or
by a university or other recognized educational or research
institution in the United States
for the primary purpose of
teaching or engaging in research at
[insert the
name of the educational or research institution]. I will receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or for
the portion of the year from
to
) qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and France. I have not
previously claimed an income
tax exemption under this
treaty for income received as
a teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date

of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

Germany
1. I am a resident of Germany. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant.
2. I am a professor or teacher
visiting the United States for
the purpose of advanced
study, teaching, or research
at
[insert the name
of the accredited university,
college, school, or other educational institution, or a public
research institution or other
institution engaged in research for the public benefit].
I will receive compensation
for my teaching, research, or
study activities.
3. The compensation received
during the entire tax year (or
during the period from
to
) for
these activities qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and Germany. I have
not previously claimed an income tax exemption under
that treaty for income received as a student, apprentice, or trainee during the immediately preceding period.
(If, however, following the period in which the alien
claimed benefits as a student,
apprentice, or trainee, that
person returned to Germany
and resumed residence and
physical presence before returning to the United States
as a teacher or researcher,
that person may claim the
benefits of this treaty.)
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the services for which
the exemption is claimed].
The treaty exemption is available only for compensation

paid during a period of 2
years beginning on that date.

Greece
1. I am a resident of Greece. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant (and would
not otherwise be considered
a resident alien for the relevant tax year).
2. I am a professor or teacher
visiting the United States for
the purpose of teaching at
[insert the name of
the other educational institution at which you teach],
which is an educational institution. I will receive compensation for my teaching activities.
3. The teaching compensation
received during the entire tax
year (or during the period
from
to
) qualifies for exemption from withholding of federal tax under
the tax treaty between the
United States and Greece. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher or student before the date of my
arrival in the United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching services for
which exemption is claimed].
The treaty exemption is available only for compensation
received during a period of 3
years beginning on that date.

India
1. I was a resident of India on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am visiting the United States
for the purpose of teaching or
conducting research at
[insert the name of
the university, college, or
other recognized educational
institution]. I will receive compensation for my teaching or
research activities.
3. The teaching or research
compensation received
Page 61

during the entire tax year (or
during the period from
to
) for
these activities qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and India.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the services for which
the exemption is claimed].
The treaty exemption is available only for compensation
paid during a period of 2
years beginning on that date.

Indonesia
1. I was a resident of Indonesia
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I have accepted an invitation
by
[insert the name
of the university, college,
school, or other similar educational institution] to come to
the United States solely for
the purpose of teaching or engaging in research at that educational institution. I will receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of
federal tax under the tax
treaty between the United
States and Indonesia. I have
not previously claimed an income tax exemption under
that treaty for income received as a teacher or researcher before the date
specified in the next paragraph.
4. I arrived in the United States
on
[insert the date
of your arrival into the United
States before beginning the
teaching or research services
for which the exemption is
claimed]. The treaty exemption is available only for compensation paid during a
Page 62

period of 2 years beginning
on that date.
5. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.

Israel
1. I was a resident of Israel on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I have accepted an invitation
by the U.S. Government (or
by a political subdivision or local authority thereof), or by a
university or other recognized
educational institution in the
United States, to come to the
United States for a period not
expected to exceed 2 years
for the purpose of teaching or
engaging in research at
[insert the name of
the educational institution],
which is a recognized educational institution. I will receive
compensation for my teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or for
the portion of the year from
to
) qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and Israel. I have not
previously claimed an income
tax exemption under this
treaty for income received as
a teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

Italy
1. I was a resident of Italy on the
date of my arrival in the United States. I am not a U.S.
citizen. I have not been accorded the privilege of residing
permanently in the United
States as an immigrant.
2. I am a professor or teacher
visiting the United States for
the purpose of teaching or
performing research at
[insert the name of
the educational institution or
medical facility at which you
teach or perform research],
which is a recognized educational institution or a medical
facility primarily funded from
governmental sources. I will
receive compensation for my
teaching or research activities.
3. The compensation received
during the entire tax year (or
during the period from
to
) qualifies for exemption from withholding of
federal tax under the tax
treaty between the United
States and Italy. I have not
previously claimed an income
tax exemption under that
treaty for income received as
a teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the general interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

Jamaica
1. I was a resident of Jamaica
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am visiting the United States
for the purpose of teaching or
conducting research for a period not expected to exceed 2
years at
[insert the

name of the educational institution at which you teach or
conduct research], which is a
recognized educational institution. I will receive compensation for my teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and Jamaica. I have not previously claimed an income tax
exemption under that treaty
for income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation paid during a period of 2 years beginning on
that date.

Luxembourg
1. I am a resident of Luxembourg. I am not a U.S. citizen.
I have not been lawfully accorded the privilege of residing permanently in the United
States as an immigrant.
2. I have accepted an invitation
by
[insert the name
of the educational institution
at which you teach or perform
research], which is a recognized educational institution,
to come to the United States
for the purpose of teaching or
engaging in research at that
institution. I will receive compensation for my teaching or
research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and Luxembourg. I have not
previously claimed an income
tax exemption under that
treaty for income received as
a teacher, researcher, or student before the date of my arrival in the United States.

Publication 519 (2022)

4. Any research I perform will
not be carried on for the benefit of any person using or
disseminating the results for
purposes of profit.
5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the teaching services for
which exemption is claimed].
The treaty exemption is available only for compensation
received during a period of 2
years beginning on that date.

Netherlands
1. I am a resident of the Netherlands. I am not a U.S. citizen.
I have not been lawfully accorded the privilege of residing permanently in the United
States as an immigrant.
2. I am visiting the United States
for the purpose of teaching or
engaging in research at
[insert the name of
the educational institution at
which you teach or perform
research] for a period not exceeding 2 years. I will receive
compensation for my teaching or research activities.
3. The compensation received
during the entire tax year (or
during the period from
to
) for these activities
qualifies for exemption from
withholding of federal tax under the tax treaty between the
United States and the Netherlands. I have not previously
claimed an income tax exemption under that treaty for
income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
benefit of a specific person or
persons.
5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the teaching or research
services for which exemption
is claimed]. The treaty exemption is available for compensation received during a
period of 2 years beginning
on that date only if my visit
does not exceed 2 years.

Publication 519 (2022)

Norway
1. I was a resident of Norway on
the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I have accepted an invitation
by the U.S. Government, or
by a university or other recognized educational institution
in the United States for a period not expected to exceed 2
years for the purpose of
teaching or engaging in re[insert the
search at
name of the educational institution], which is a recognized
educational institution. I will
receive compensation for my
teaching or research activities.
3. The teaching or research
compensation qualifies for
exemption from withholding
of federal tax under the tax
treaty between the United
States and Norway. I have
not previously claimed an income tax exemption under
this treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. Any research I perform will
not be undertaken primarily
for the private benefit of a
specific person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

Pakistan
1. I am a resident of Pakistan. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant and would
not otherwise be considered
a resident alien for the relevant tax year.
2. I am a professor or teacher
visiting the United States for
the purpose of teaching at
[insert the name of
the educational institution at
which you teach], which is a

recognized educational institution. I will receive compensation for my teaching activities.
3. The teaching compensation
received during the entire tax
year (or during the period
from
to
) qualifies for exemption from withholding of federal tax under
the tax treaty between the
United States and Pakistan. I
have not previously claimed
an income tax exemption under this treaty for income received as a teacher or student before the date of my
arrival in the United States.
4. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the teaching services for
which exemption is claimed].
The treaty exemption is available only for compensation
paid during a period of 2
years beginning on that date.

Portugal
1. I was a resident of Portugal
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I have accepted an invitation
by
[insert the name
of the university, college,
school, or other similar educational institution] to come to
the United States solely for
the purpose of teaching or engaging in research at that educational institution. I will receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of
federal tax under the tax
treaty between the United
States and Portugal. I have
not previously claimed an income tax exemption under
that treaty for income received as a teacher or researcher before the date
specified in paragraph 5.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.

5. I arrived in the United States
on
[insert the date
of your arrival into the United
States before beginning the
teaching or research services
for which the exemption is
claimed]. The treaty exemption is available only for compensation paid during a period of 2 years beginning on
that date.

Slovenia and
Venezuela
1. I was a resident of
[insert the name of the country under whose treaty you
claim exemption] on the date
of my arrival in the United
States. I am not a U.S. citizen. I have not been lawfully
accorded the privilege of residing permanently in the United States as an immigrant.
2. I am temporarily present in
the United States for the purpose of teaching or carrying
on research at
[insert the name of the educational or research institution],
which is a recognized educational or research institution. I
will receive compensation for
my teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and
[insert the
name of the country under
whose treaty you claim exemption]. I have not previously claimed an income tax
exemption under this treaty
for income received as a
teacher, researcher, or student before the date of my arrival in the United States.
4. Any research I perform will be
undertaken in the general interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date. In no event have
I claimed an exemption under
Page 63

this treaty for income received as a teacher or researcher for more than 5
years.

Thailand
1. I was a resident of Thailand
on the date of my arrival in the
United States. I am not a U.S.
citizen. I have not been lawfully accorded the privilege of
residing permanently in the
United States as an immigrant.
2. I am visiting the United States
for the purpose of teaching or
engaging in research at
[insert the name of
the educational or research
institution at which you teach
or perform research] for a period not exceeding 2 years. I
will receive compensation for
my teaching or research activities.
3. The compensation received
during the entire tax year (or
during the period from
to
) for these activities
qualifies for exemption from
withholding of federal tax under the tax treaty between the
United States and Thailand. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
benefit of a specific person or
persons.

Page 64

5. I arrived in the United States
on
[insert the date
of your last arrival into the
United States before beginning the teaching or research
services for which exemption
is claimed]. The treaty exemption is available only for
compensation received during a period of 2 years beginning on that date.

Trinidad and Tobago
1. I was a resident of Trinidad
and Tobago on the date of my
arrival in the United States. I
am not a U.S. citizen. I have
not been lawfully accorded
the privilege of residing permanently in the United States
as an immigrant.
2. I have accepted an invitation
by the U.S. Government, or
by a university or other educational institution in the United States, to come to the
United States for the purpose
of teaching or engaging in research at
[insert the
name of the educational institution], which is an educational institution approved by
an appropriate governmental
education authority. No
agreement exists between
the government of the United
States and the government of
Trinidad and Tobago for the
provision of my services. I will
receive compensation for my
teaching or research services.
3. The teaching or research
compensation received during the entire tax year (or for

the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and Trinidad and Tobago. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
private benefit of a specific
person or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date.

United Kingdom
1. I was a resident of the United
Kingdom on the date of my
arrival in the United States. I
am not a U.S. citizen. I have
not been accorded the privilege of residing permanently
in the United States as an immigrant.
2. I am a professor or teacher
visiting the United States for a
period of not more than 2
years for the purpose of

teaching or engaging in research at
[insert the
name of the educational institution], which is a recognized
educational institution. I will
receive compensation for my
teaching or research activities.
3. The teaching or research
compensation received during the entire tax year (or during the period from
to
) qualifies for exemption from withholding of federal tax under the tax treaty
between the United States
and the United Kingdom. I
have not previously claimed
an income tax exemption under that treaty for income received as a teacher, researcher, or student before
the date of my arrival in the
United States.
4. Any research I perform will be
undertaken in the public interest and not primarily for the
benefit of any private person
or persons.
5. I arrived in the United States
on
[insert the date
of your last arrival in the United States before beginning
the teaching or research services for which exemption is
claimed]. The treaty exemption is available only for compensation received during a
period of 2 years beginning
on that date. The entire treaty
exemption is lost retroactively
if my stay in the United States
exceeds 2 years.

Publication 519 (2022)

Index

To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

30% Tax 21

A
Accuracy-related penalties 36
Additional Medicare Tax 42, 43
Adoption credit:
Dual-status alien 33
Nonresident alien 30
Resident alien 29
Agricultural workers 38, 43
Alien:
Nonresident 3, 11, 18
Resident 4, 11, 17
Alien status, employer
notification of 38
Amended returns 35
American Samoa, residents
of 10, 26, 31
Annuities:
Income 16
Source rule 13
Assistance (See Tax help)
Athletes, professional 6
Awards 13

B
Basis of property 14
Beneficiary of estate or trust 18
Business expenses, ordinary
and necessary 26
Business operations 18
Business, U.S. 18

C
Canada:
Commuters 4
Dependents 32
Qualifying surviving spouse
filing status 26
Social security benefits 46
Transportation-related
employment 38
Capital assets, sales or
exchanges 21
Casualty and theft losses 28
Central withholding
agreements 39
Charitable contributions 28
Child and dependent care
credit:
Dual-status alien 33
Nonresident alien 29
Resident alien 29
Child tax credit:
Dual-Staus alien 33
Nonresident alien 30
Resident alien 29
Claims for refund 35
Commodities, trading in 18
Community income 14
Commuters from Canada or
Mexico 4
Compensation for labor or
personal services:
Geographical basis 12
Contingent interest 15
Coronavirus 5
Performing Services 18
COVID-19 18
Publication 519 (2022)

Credit for the elderly or the
disabled:
Dual-status alien 32
Resident alien 29
Credits against tax:
Child and dependent care
credit 29, 33
Child tax credit 29, 30, 33
Credit for the elderly or the
disabled 32
Dual-status alien 32
Earned income credit 30, 32
Education credits 29, 32
Excess social security tax
withheld 30
Foreign tax credit 29, 32
Hope credit 29
Lifetime learning credit 29
Retirement savings
contributions 29, 30, 33
Tax paid on undistributed
long-term capital gains 30
Tax withheld at source 30
Tax withheld on partnership
income 30
Withholding from wages 30
Crew members:
Alien status 5
Compensation 16
Currency, transporting 35

D
De minimis presence 9
Deductions 26, 27
Dependents:
Dual-status taxpayer 32
Nonresident alien 27
Resident alien 27
Depreciable property 14
Diplomats (See Foreign
government employees)
Disclosure statement 37
Dividends, U.S. source
income 11
Dual-status aliens 7
Dual-status tax year 7, 31
Child care credit 33
Computation of tax 32
Credit for the elderly or the
disabled 32
Earned income credit (EIC) 32
Education credit 32
Foreign tax credit 32
Forms to file 33
Head of household. 32
Income subject to tax 32
Joint return 32
Residency ending date 7
Residency starting date 7
Restrictions 32
Standard deduction 32
Tax rates 32
When and where to file 33

E
Earned income credit:
Dual-status alien 32
Nonresident alien 30
Earned income credit (EIC):
Resident alien 29

Education credits:
Dual-status alien 32
Nonresident alien 29
Resident alien 29
Effectively connected
income 18
Alternative minimum tax 20
Asset-use test 19
Business profits and losses and
sales transactions 19
Business-activities test 19
Direct economic
relationship 19
Disposition of REIT stock. 20
Domestically controlled
QIE. 20
Foreign income 20
Gain or Loss of Foreign
Persons from the Sale or
Exchange of Certain
Partnership Interests 20
Investment income 18
Look-through rule for QIEs. 20
Pensions 19
Publicly traded exception 19
Qualified investment entity 19
Real property gain or loss 19
Real property income
choice 22
Tax on 21
Transportation income 19
U.S. real property holding
corporation 19
U.S. real property interest 19
Wash sale 20
Withholding of tax 20
Employees, household 38
Employees, withholding
exemption under tax
treaty 41
Employer identification
number 25
Estate, beneficiary 18
Estimated tax 37, 44
Excess social security tax 30
Exchange visitors 43
Income from foreign
employer 16
Social security and Medicare
taxes 42
Exclusions from gross
income 15
Annuities 16
Compensation from a foreign
employer 16
Gambling winnings, dog or
horse racing 17
Students and exchange
visitors 16
Treaty income 16, 45
Exempt individual 5
Exemption from withholding:
Employees 41
Independent contractors 41
Students, teachers, and
researchers 41
Expatriation tax:
Certain dual-citizens 24
Certain minors 24
Covered expatriate 23
Deferral of payment of
mark-to-market tax 24

Exception for dual-citizens and
certain minors 24
Exceptions. 24
Expatriation After June 16,
2008 23
Expatriation date. 23
Expatriation Tax Return 24
Former LTR 23
Former U.S. citizen. 23
How To Figure the Expatriation
Tax If You Are a Covered
Expatriate (If You Expatriate
After June 16, 2008) 24
Long-term resident (LTR)
defined 23

F
Fellowship grant:
Excludable 17
Source rule 13
Withholding tax 40
Filing requirements 34
Filing returns 24
Amended returns 35
Claims for refund 35
Commonwealth of the Northern
Mariana Islands 35
Dual-status taxpayer 33
Estimated tax 44
Form 1040-C 50
Form 1040-NR 24, 34
Form 1040-NR-EZ 24
Form 2063 50
Guam 35
Nonresident alien 24
U.S. Virgin Islands 35
Who must file 34
Filing status 25
First-year choice 8
Fixed or determinable
income 21
Foreign country 6
Foreign earned income
exclusion:
COVID-19 relief 15
Foreign employer 16
Foreign government
employees:
Alien status 5
Exempt from U.S. tax 47
Tax treaty exemption 46
Foreign income subject to U.S.
tax 20
Foreign tax credit:
Dual-status alien 32
Nonresident alien 29
Resident alien 28
Form 8833 7
Form 8840 7
Forms 6
1040-C 50
1040-ES(NR) 44
1040-NR 34
1040-X 35
1042-S 41
1116 28, 29, 32
2063 50
2210 45
3903 27
4563 31
4790 (See FinCEN 105)
Page 65

Forms (Cont.)
8233 41
8275 37
8288 42
8288-A 42
8288-B 42
8801 30
8805 40, 41
8833 46
8843 6
FinCEN 105 35
W-4 38, 40
W-7 25
W-8BEN 41
W-8ECI 39
W-9 38
Forms to file:
Dual-status alien 33
Nonresident aliens 34
Resident alien 34
Sailing permits 50
Frequently Asked Questions 54

G
Gambling winnings, dog or
horse racing 17
German social security
benefits 46
Green card test 4

H
Head of household:
Nonresident alien 26
Resident alien 25
Home, sale of 17
Household employees 38

I
Identification number, taxpayer:
Defined 25
Penalty for failure to supply 37
Income:
Community 14
Effectively connected 18
Exclusions 15
Fixed or determinable 21
Foreign 20
From real property 22
Income affected by treaties 16
Interest 15
Investment 18
Personal services 19
Reporting 26
Sale of home 17
Tip 39
Income code:
28 21
Income from U.S. sources 11
Dividends 11
Interest 11
Pensions and annuities 13
Personal property 14
Personal services 12
Real property 14
Rents or royalties 13
Independent contractors:
Withholding exemption under
tax treaty 41
Withholding rules 39
India, students and business
apprentices from:
Standard deduction 27
Withholding allowances 38

Page 66

Individual retirement
arrangement (IRA) 26
Individual taxpayer
identification number
(ITIN) 25
Intangible property 14
Interest:
Portfolio 15
Interest income:
Contingent 15
Excludable 15
Source rule 11
International organization
employees 48
Alien status 5
Exempt from U.S. tax 47
International social security
agreements 44
Interrupted period of
residence 23
Inventory 14
Investment income 18
Itemized deductions 27

K
Korea, South:
Dependents 32
Married filing separately 26
Qualifying surviving spouse
filing status 26

L
Last year of residency 9
Long-term U.S. resident:
Defined 23
Expatriation tax 23
Losses:
Capital Assets 21
Casualty and theft 28
Of nonresident aliens 26
Real property 19

M
Married filing jointly:
Nonresident alien 26
Resident alien 25
Medical condition:
Travel exception 5
Medicare tax 42
Mexico:
Commuters 4
Dependents 32
Qualifying surviving spouse
filing status 26
Transportation-related
employment 38
Monetary instruments,
transporting 35
Moving expenses 27
Services or reimbursements
provided by government to
members of the U.S. Armed
Forces 27
Multi-level marketing 12, 39
Municipal bonds 15

N
National of the United States 32
Natural resources (See Real
property)
Non-registered obligations 15
Nonresident alien 3
Annuity income 16
Business expenses 26

Casualty and theft losses 28
Charitable contributions 28
Child care credit 29
Child tax credit and the
additional child tax credit 30
Credit for excess social security
tax withheld 30
Credit for income tax
withheld 30
Credit for other dependents 30
Credit for prior-year minimum
tax 30
Defined 3
Earned income credit 30
Education credits 29
Effectively connected income,
tax on 21
Filing Form 1040-NR 24
Filing Form 1040-NR-EZ 24
Foreign tax credit 29
Gambling winnings, dog or
horse racing 17
Head of household 26
How income is taxed 18
Individual retirement
arrangement (IRA) 26
Interest income 11
Losses 26
Married filing jointly 26
Qualified business income
deduction. 26
Qualifying surviving spouse 26
Standard deduction 27
State and local income
taxes 27
Students 42
Tax paid on undistributed
long-term capital gains 30
Tax withheld at source 30
Withholding from partnership
income 30
Withholding tax 37
Nonresident alien dependents:
Canada, Mexico. South Korea,
Residents of India 27
Nonresident spouse treated as
a resident 9

O
Obligations:
Not in registered form 15
Registered 15
Original issue discount 21

P
Partnership Income, tax
withheld on 40
Partnerships 18
Payment against U.S. tax 33
Tax withheld at the source 30
Withholding from wages 30
Penalties 36
Accuracy-related 36
Failure to file 36
Failure to pay 36
Failure to supply taxpayer
identification number 37
Fraud 37
Frivolous tax submission 37
Negligence 36
Substantial understatement of
income tax 36
Penalty for failure to pay
estimated income tax 45
Penalty on early withdrawal of
savings 27

Pensions:
COVID-19 relief 13
Disaster tax relief 13
Source rule 13
Withholding on 39
Personal property 14
Personal services income:
Connected with U.S.
business 19
Paid by foreign employer 16
Source rule 12
Tax treaty exemption 45
Withholding on wages 38
Portfolio interest 15
Prizes 13
Professional athletes 6
Property:
Depreciable 14
Intangible 14
Inventory 14
Personal 14
Real 14, 19
Protective return 35
Publications (See Tax help)
Puerto Rico, residents of 10,
26, 31, 38

Q
Qualified business income
deduction. 26

R
Railroad retirement benefits 21,
32
Real estate (See Real property)
Real property:
Definition 14
Income from 22
Natural resources 14
Sale or exchange of 19
Source rule 14
Real property income 21
Refunds, claims for 35
Registered obligations 15
Rents 13
Researchers, wage withholding
exemption under tax
treaty 41, 60
Residence, interrupted 23
Residency:
First year 7
Last year 9
Starting date 7
Termination date 9
Tests 4
Resident alien 4
Child tax credit 33
Child tax credit and the
additional child tax credit 29
Credit for other dependents 29
Defined 4
Education credits 29
Head of household 25
Married filing jointly 25
Qualifying surviving spouse 25
Resident aliens:
Dependents 27
Retirement savings
contributions credit:
Dual-status alien 33
Nonresident alien 30
Resident alien 29
Royalties 13

Publication 519 (2022)

S
Sailing permits, departing
aliens:
Aliens not requiring 49
Bond furnished, insuring tax
payment 51
Form 1040-C 50
Form 2063 50
Forms to file 50
When and Where To Get a
Sailing or Departure
Permit. 50
Salary (See Personal services
income)
Sale of home, income from 17
Sales or exchanges, capital
assets 21
Scholarship:
Excludable 17
Source rule 13
Withholding tax 40
Securities, trading in 18
Self-employed retirement
plans 27
Self-employment tax 43
Social security benefits:
Dual-status alien 32
Nonresident alien 21
Social security number 25
Social security tax:
Credit for excess tax
withheld 42
Excess withheld 30
Foreign students and exchange
visitors 42
International agreements 44
Self-employment tax 43
Totalization agreements 44
Withheld in error 43
Source of compensation for
labor or personal services:
Alternative basis 13
Multi-year compensation 12
Time basis 12

Publication 519 (2022)

Source of income 11
Standard deduction 27
State and local income
taxes 27
Stocks, trading in 18
Student loan interest
deduction 27
Students:
Alien status 6
Engaged in U.S. business 18
Fellowship grant 13, 40
Income from foreign
employer 16
Scholarship 13, 40
Social security and Medicare
taxes 42
Tax treaty exemption 46
Wage withholding exemption
under tax treaty 41, 56
Students and business
apprentices from India 27,
38
Substantial presence test 4

T
Tax credits and payments:
Nonresident aliens 29
Resident aliens 28
Tax help 51
Tax home 6, 14
Tax paid on undistributed
long-term capital gains 30
Tax treaties:
Benefits 45
Capital gains 46
Employees of foreign
governments 46
Exclusions from income 16
Income affected by 16
Reporting benefits claimed 47
Teachers and professors 46
Trainees, students, and
apprentices 46
Tax Treaties:
Effect of 7

Income entitled to benefits 41
Tax withheld on gain from the
sale or exchange of certain
partnership interests 30
Tax year 25, 31
Tax, transportation 22
Taxpayer identification number:
Defined 25
Penalty for failure to supply 37
Teachers:
Alien status 5
Tax treaty exemption 46
Wage withholding exemption
under tax treaty 41, 60
Tie-breaker rule 7
Tip income 39
Totalization agreements 44
Trade or business, U.S. 18
Beneficiary of estate or trust 18
Business operations 18
Coronavirus relief 18
Income from U.S. sources 18
Partnerships 18
Personal services 18
Students and trainees 18
Trading in stocks, securities,
and commodities 18
Trading in stocks, securities,
and commodities 18
Trainees 5, 18
Transportation income:
Connected with U.S.
business 19
Source rule 13
Transportation of currency or
monetary instruments 35
Transportation tax 22
Transportation-related
employment, residents of
Canada or Mexico 38
Treaties, income affected by 16
Treaty benefits for resident
aliens 46
Treaty benefits, reporting
benefits claimed 47

Trust, beneficiary 18

U
U.S Virgin Islands, residents of:
Withholding on wages 38
U.S. Armed Forces:
Moving expenses 27
U.S. national 32
U.S. Virgin Islands, residents of:
Where to file 35

W
Wages (See Personal services
income)
Wages exempt from
withholding 38
Wages, withholding on 38
Waiver of filing deadline 35
When to file 35
Where to file 35
Who must file 34
Withholding 37, 40
Withholding tax:
Central withholding
agreements 39
Notification of alien status 38
Pensions 39
Puerto Rico, residents of 38
Real property sales 41
Scholarships and grants 40
Social security taxes 42
Tax treaty benefits 41
Tip income 39
U.S. Virgin Islands, residents
of 38
Wages 38
Wages exempt from 38
Where to report on the
return 30
Withholding from
compensation 38

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