I am a Canadian citizen living and working in the U.S. for a U.S. employer on a visa. Do I need to file both a U.S. tax return and a Canadian tax return?

You must comply with both U.S. and Canadian filing requirements. In the United States, you generally are required to file a return if you have income from the performance of personal services within the United States. However, under certain circumstances, that income may be exempt from U.S. tax pursuant to the U.S.-Canada income tax treaty. You need to determine what type of visa you have, and how that impacts your residency status in the United States. If based on the code and your visa status you are treated as a U.S. resident, then your entitlement to treaty benefits will be impacted.

References:

• 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

I am a Canadian citizen who worked in the U.S. for 4 months. Do I have to file a U.S. income tax return as well as my income tax return in Canada?

That would depend upon whether you are a resident of the U.S. for purposes of U.S. tax law. There are several tests to determine residency, including the substantial presence test, which is based on how many days you are present in the U.S. over a period of three years. If you are simultaneously a U.S. resident under U.S. law and a Canadian resident under Canadian law, you should consult the U.S.-Canada income tax treaty for rules that would treat you as a resident of only one country. It is also possible that you may have to file a dual-status return in the U.S. if you qualify as a U.S. resident for only part of the year.

References:

• 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

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

I am a nonresident alien. Can I take the foreign earned income exclusion if I meet the bona fide resident test or physical presence test? If yes, what is the tax form used for nonresident taxpayer?

No, nonresident aliens do not qualify for the foreign earned income exclusion. Only if you are a U.S. citizen or a resident alien of the United States and live abroad, may you qualify to exclude up to $80,000 of your foreign earned income for 2002.

References:

• Publication 519 (PDF), Tax guide for U.S. Citizens and Resident Aliens Abroad
• Tax Topic 853, Foreign earned income exclusion - general

I am a foreign national and came to this country on June 30th of last year. I have a H-1 visa. What is my tax status regarding resident, nonresident alien, or resident alien?

You were a dual status alien last year. As an H-1 visa holder in the U.S. for 183 days or more, you likely became a resident, for tax purposes, on June 30th. For the part of the year you are a resident alien, you are taxed on income from all sources.

For the part of the year that you are not a resident alien, you are taxed on income from sources outside the United States, unless the income is effectively connected with a trade or business in the United States.

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 and only if you are a resident of a country that has a treaty with the United States and you are resident for treaty purposes for the taxable year.

For that part of the year that you are a nonresident, file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. For that part of the year you are a resident, file Form 1040 (PDF) or Form 1040A (PDF).

References:

• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return

I was an international student (F-1 visa) until October 1, then my visa status was changed to H-1. Should I file my income tax return as a dual status or nonresident alien?

Assuming you were not in the U.S. on your F-1 student visa for over 5 years, you may file as a nonresident for the entire year or, if you qualify under the first year choice, you may file as a dual status alien. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for additional information.

References:

• Publication 519 (PDF), U.S. Tax Guide for Aliens

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:

• Publication 519 (PDF), U.S. Tax Guide for Aliens

I live in a foreign country. How do I get a social security number for my nonresident alien dependent who qualifies for a social security card?

Use form SS-5-FS which may be obtained from the Social Security Administration (1-800-772-1213).

References:

• Social Security Administration

My spouse is a nonresident alien. How can I get a nonworking social security number for her?

Since 1997, each foreign person who does not have and cannot obtain a Social Security Number must use an IRS Individual Taxpayer Identification Number (ITIN) on any U.S. tax return or refund claim filed. This would include:

• filing a U.S. tax return to report U.S.-source income;
• filing a U.S. tax return only to claim a refund of tax withheld;
• being the spouse of a U.S. citizen or resident who elects to file a joint tax return;
• being claimed as a spouse for an exemption on a U.S. tax return; or,
• being claimed as a dependent on another person's U.S. tax return.

Use IRS Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN by mail or in person at most IRS offices (see the list of offices abroad at the beginning of Publication 1915 (PDF), Understanding your IRS individual taxpayer identification number) in the U.S. and abroad, at certain U.S. consular offices and athttp://www.irs.gov. Complete Form W-7 at least 4 to 6 weeks before you need an ITIN. Sign and date the form and be sure to provide all information requested.

Provide original, or certified or notarized copies of identity documents (examples of acceptable documents include an original passport, national identity card, etc.). Original documents will be returned. See instructions for form W-7 for more detailed information.

NOTE: If you have an INS document showing you are allowed to work in the U.S., you are eligible for an SSN and should not file Form W-7.

If you choose the mailing option use the following address:

If you have not heard from the IRS regarding your ITIN application within 30 days after you filed Form W-7, you may call either 1-215-516-ITIN (1-215-516-4846) (outside the United States) or toll free 1-800-tax-1040 (1-800-829-1040) (in the United States) to find out the status of your application. Be sure to have a copy of your Form W-7 application available when you call. Please allow 30 days from the date you filed Form W-7 before calling the IRS about the status of your application.

For additional information about ITINs, refer to Publication 1915 (PDF), Understanding Your IRS Individual Taxpayer Identification Number.

References:

• Publication 1915 (PDF), Understanding Your IRS Individual Taxpayer Identification Number
• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number

I am a nonresident alien and invested money in U. S. stock market through a U.S. brokerage company. Are the dividend and the capital gains taxable? If yes, how are they taxed?

Generally, capital gains received by a nonresident alien not present in the United States for 183 days or more are not taxable in the United States. Certain gains, however, are subject to the 30% withholding rate or if applicable, a reduced tax treaty rate on the gross amount of the following items:

• Gains on disposal of timber, coal, or domestic iron ore with a retained economic interest, unless an election is made to treat those gains as income effectively connected with a U.S. trade or business,
• Gains on contingent payments received from the sale or exchange after October 4, 1966, of patents, copyrights, secret processes and formulas, goodwill, trade marks, trade brands, franchises, and other sale property,
• Gains on certain transfers of all substantial rights to, or an undivided interest in, patents if the transfers were made before October 5, 1966, and
• Certain gains from the sale or exchange of original issue discount obligations issued after March 31, 1972.

Dividends are withheld upon at the 30% or lower tax treaty rate. If your withholding is not at the correct rate, a nonresident alien should file Form 1040NR (PDF), U.S. Nonresident Alien Income tax return to claim a refund of withheld taxes.

References:

• Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519 (PDF) U.S. Guide for Aliens
• Publication 597 (PDF), Information on the United States-Canada Income Tax Treaty
• Publication 901 (PDF), U.S. Tax Treaties
• Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
• Form 1040NR-EZ (PDF) U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents

I entered the U.S. in August and I have a J-2 visa with an Employment Authorization (work permit). Can I be considered as a U.S. resident for tax purposes under the substantial presence test? Since my visa does not allow me to stay in this country am I subjected to social security tax and Medicare tax?

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

• 31 days during the current year, and
• 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
• All the days you were present in the current year, and
• 1/3 of the days you were present in the first year before the current year, and
• 1/6 of the days you were present in the second year before the current year.

For purposes of the substantial presence test, certain days of physical presence do not count. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for additional information.

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.

References:

• Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519 (PDF), U.S. Tax Guide for Aliens

Under my visa as a temporary nonresident alien, I'm not subject to social security and Medicare withholding. My employer withheld the taxes from my pay. What should I do to get a refund of my social security and Medicare?

If social security tax was withheld in error from pay received which was not subject to the tax, contact the employer who withheld the tax for reimbursement. If you are unable to get a refund from the employer, file a claim for refund with the Internal Revenue Service on Form 843 (PDF), Claim for Refund and Request for Abatement.

Attach the following to your claim:

• a copy of the [Form W-2], Wage and Tax Statement, to prove the amount of social security tax withheld,
• a copy of INS Form I-94, Arrival/Departure Record,
• a copy of INS Form I-538, Application of Nonimmigrant Student (F1) for Extension to Stay, School Transfer or Permission to Accept or Continue Employment, and
• a statement signed by the student stating that he/she has asked the employer for reimbursement of social security tax withheld in error but has been unable to get a refund.

File the claim for refund (with attachments) with the IRS office where the employer's returns were filed. If you do not know where the employer's returns were filed, file the claim with the Internal Revenue Service Center, Philadelphia, PA 19255

For more information, refer to Publication 519 (PDF), U.S. Tax Guide for Aliens.

References:

• Form 843 (PDF), Claim for Refund and Request for Abatement
• Publication 519 (PDF), U.S. Tax Guide for Aliens

I am a U.K. resident and I need to recover withholding tax on a U.S. capital gain. Do I need an ITIN?

Yes, you need to secure an Individual Taxpayer Identification Number, or ITIN. To secure an ITIN, you must file 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 photography, and your foreign status. If you have one document that verify both, such as a passport, then that one document is enough. You may, however, have to provide a combination of documents for this purpose.

You can apply for your ITIN by mail or in person at most IRS offices in the U.S. If you apply in person, your documents will be reviewed and returned to you. Publication 1915 (PDF), Understanding Your IRS Individual Taxpayer Identification Number, has a list of IRS offices abroad which can accept Form W-7. If you apply by mail, use the address shown in the W-7 instructions and the Publication 1915. If you send original supporting documentation with your application, your documentation will be returned within 14 days. Once you have applied, you should get acknowledgment that your Form W-7 was received within 14 days; you should receive your ITIN within 4 to 6 weeks.

References:

• Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Publication 1915 (PDF), Understanding Your IRS Individual Taxpayer Identification Number
• Form W-7 (PDF), Application for IRS Individual Taxpayer Identification Number
• Tax Topic 857, Individual Taxpayer Identification Number - Form W-7

I am a foreign citizen and resident from the European Union. I plan to buy U.S. stocks, but what tax will I have to pay if I have earnings on stocks?

U.S. source dividend income is subject to 30% tax rate when paid to nonresident aliens. A lower rate may apply to residents of a country with which the United States has an income tax treaty.

References:

• Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Publication 686 (PDF), Certification for Reduced Tax Rates in Tax Treaty Countries
• Publication 901 (PDF), U.S. Tax Treaties

I am a nonresident alien. Our broker withholds 30% tax on dividends. Can I get this tax back since I already owe tax in my resident country on overseas income?

Generally, this type of income paid to nonresident aliens is taxable at the 30% or lower treaty rate. If your country has a tax treaty with the U.S., you may have a reduced rate of tax. If that is the case, you should file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return, to claim a refund of federal income taxes withheld.

References:

• Publication 515 (PDF), Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 901 (PDF), U.S. Tax Treaties
• Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Form 8833 (PDF), Treaty Based Return Position Disclosure Under Section 6114 or 7701(b)

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:

• Publication 513 (PDF), Tax Information for Visitors to the United States
• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Form 8843 (PDF), Statement for Exempt Individuals and Individuals with a Medical Condition
• Tax Topic 851, Resident and nonresident aliens

I am an F-1 student status who was employed during my school studies and directly afterwards I completed practical training. Do I have to pay FICA taxes? Which taxes should be taken out of my pay?

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. However, you are covered under the social security program for these services if you are considered a resident alien, even though your nonimmigrant classification ("F," "J," "M," or "Q") remains the same. Social security and Medicare taxes will be withheld from your pay.

Additionally, any student who is enrolled and regularly attending classes at a school, college, or university may be exempt from social security and Medicare taxes on pay for services performed for such school, college, or university.

References:

• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Publication 597 (PDF), Information on the United States-Canada Income Tax Treaty

Are nonresident alien students, with F-1 visas and employed by a U.S. company during the summer, required to have federal income taxes withheld from their paychecks?

The following discussion generally applies only to nonresident aliens. 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. Nonresident aliens must follow modified instructions when completing Form W-4. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens, for directions on completing Form W-4 (PDF), Employees Withholding Allowance Certificate.

References:

• Publication 519 (PDF) , U.S. Tax Guide for Aliens
• Publication 597 (PDF), Information on the United States-Canada Income Tax Treaty
• Form W-4 (PDF), Employees Withholding Allowance Certificate

I am a student from the People's Republic of China currently studying in the United States. How does the income tax treaty between the U.S. and China apply, especially for students with scholarships and fellowships?

If you are in the United States solely for the purpose of your education, training, or obtaining special technical experience, you may be able to exclude from your income grants or awards that you receive from a government, scientific, educational, or other tax-exempt organization. You also may be able to exclude payments that you receive from abroad for the purpose of your maintenance, education, study, research, or training and up to $5,000 of income that you receive from personal services performed in the United States. Please refer to Publication 519 (PDF), U.S. Tax Guide for Aliens.

References:

• Publication 513 (PDF) , Tax Information for Visitors to the United States
• Publication 519 (PDF), U.S. Tax Guide for Aliens
• Tax Topic 421, Scholarship and fellowship grants

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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