Canadian & U.S. Tax Issues
This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
I won money at a Las Vegas casino and my winnings were subject to a 30% withholding tax. I am a Canadian citizen. How can I get the withholding tax back?
Generally, you must file a tax return to claim a refund of withholding. Gambling winnings by nonresidents of the U.S. are taxed at a flat 30% tax rate. However, under the U.S./Canada Tax Treaty, residents of Canada may claim gambling losses, but only to the extent of gambling winnings. You should report both your total gambling winnings and your total gambling losses on page 4 of Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return on the dotted portion of line 79. If you have net gambling winnings (after offsetting your total losses against your total winnings), you should include this net amount on line 79, column (d) of the Form 1040NR. You should also attach a copy of the Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, showing the taxes withheld to your Form 1040NR.
A diary of your losses should be kept for your records.
To file a Form 1040NR you must have a valid identification number. For most people this is a social security number (SSN). However, if you do not have and cannot obtain a SSN you may use an Individual Taxpayer Identification Number (ITIN). If you do not have an ITIN you may apply by filing Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number. Along with the completed Form W-7, you must submit document that verify both your identity, that is, contain your name and a photography, and your foreign status. If you have one document that verifies both, such as a passport, then one document is enough. You may, however, have to provide a combination of documents, for this purpose.
References: - Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations Publication
- Publication 519 (PDF), U.S. Tax Guide for Aliens
- Publication 597 (PDF), Information on the United States-Canada Income Tax Treaty
- Publication 901 (PDF), U.S. Tax Treaties
- Form W-7 (PDF), IRS Application for Individual Taxpayer Identification Number
- Form 1040NR (PDF), U.S. Nonresident Income Tax Return
- Publication 1915 (PDF), Understanding Your IRS Individual Taxpayer Identification Number
13.4 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - General I am a nonresident alien with no dependents. I am working with my H-1 visa. Do I file a Form 1040NR or 1040NR-EZ?
A nonresident alien must file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return, or Form 1040NR-EZ (PDF), U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, if you are engaged in a trade or business in the United States, or have any other U.S. source income on which the tax was not fully paid by the amount withheld.
You can use Form 1040NR-EZ instead of Form 1040NR if all nine of the following apply.
- You do not claim any dependents.
- You cannot be claimed as a dependent on another person's U.S. tax return (such as your parent's return).
- Your only U.S. source income was from wages, salaries, tips, taxable refunds of state and local income taxes, and scholarship or fellowship grants.
- Your taxable income (line 14 of Form 1040NR-EZ) is less than $50,000.
- The only adjustments to income you can claim are the student loan interest deduction or scholarship and fellowship grants excluded.
- You do not claim any tax credits.
- If you were married, you do not claim an exemption for your spouse.
- If you itemize deductions, the only deduction you claim is for state and local income taxes.
- The only taxes you owe are the tax from the tax tables, the social security and Medicare tax on tip income not reported to your employer, and the household employment taxes.
References: 13.6 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - Students I am a foreign national and last year I changed my type of visa from F-1 student to H-1 work visa. Does my visa status change how I file my tax return or what forms I use?
It depends on whether or not you qualify as a resident alien. As a foreign national temporarily in the U.S. and now under an H-1 visa, you must file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return and Form 8843 (PDF), Statement for Exempt Individuals and Individuals with a Medical Condition (if you do not meet the substantial presence test). In order to file a Form 1040, Individual Tax Return, you must meet the substantial presence test. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for a discussion of the Substantial Presence Test.
References: 13.7 Aliens and U.S. Citizens Living Abroad: U.S. Citizens Overseas I am a U.S. citizen and married a nonresident alien last year. At that time, we filed an application with Immigration Naturalization Service (INS) for my spouse's adjustment of status. We plan to file married filing jointly. Will I need to use Form 1040NR?
As a U.S. citizen, you cannot file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. If you make an election to file a joint return with your nonresident alien spouse (your spouse must, in turn, elect to be taxed as resident), file Form 1040 (PDF), U.S. Individual Income Tax Return, and report both incomes from worldwide sources. You will need to get an ITIN for your spouse. To apply for an ITIN, file Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number.
References: - Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
- Form 1040 (PDF), U.S. Individual Income Tax Return
- Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number
- Tax Topic 857, Individual Taxpayer Identification Number - Form W-7
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