Terry53029
Level 15
Level 15

you can back out the income on 1040 schedule 1, but you need to fill out form 8833. From IRS instructions:, and here is link: https://www.irs.gov/individuals/international-taxpayers/claiming-tax-treaty-benefits

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, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), to your tax return. See Exceptions, below, for the situations where you are not required to file Form 8833.

You must file a U.S. tax return and Form 8833 if you claim the following treaty benefits:

  1. 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.
  2. A change to the source of an item of income or a deduction based on a treaty.
  3. A credit for a specific foreign tax for which foreign tax credit would not be allowed by the Internal Revenue Code.

You must also file Form 8833 if 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 determining alien tax status.

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