1040 NR

[gk]

Hi,

I would like to know the Tax Treaty Article for F1 student from India. I put 21(2) as Tax Treaty Article for India and e filed the claim. Proseries rejected the claim stating " Tax Treaty article must match exactly What the IRS requires". Please help.

[BobKamman]

I'm not going to get into this discussion ever again because the last time I suggested just "20" instead of "20(c)" might work, to answer a question about the Chinese treaty, I was accused of being almost as dumb as the guy who said "when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done."

I think somewhere IRS has several thousand pages of instructions for software companies, telling them what's acceptable.  I haven't read it.  

But when the form asks for an "Article" I would just enter the article.  I wouldn't cite the paragraph or sentence within that Article.  If they wanted the specific part of the Article, they would ask for it.  Unless, of course, that's not what they mean at all.  

[itonewbie]

What exactly are you trying to exempt from US income tax?

Item L (which flows to Line 22) is not usually applicable to Article 21(2), which provides to Indian students and trainees "the same exemptions, reliefs or reductions in respect of taxes available to residents of the [US]".  This refers generally to standard deductions, personal and dependent exemptions (which are for $0 under TCJA), and various other credits that are not otherwise availed to other NRAs and even Indian tax residents who are not students and trainees.

What you should do is to go to the Nonresident Alien Information Worksheet, check the box for Check this box if client is eligible for benefits of Article 21(2) of U.S. - India Income Tax Treaty.  If your client has dependents that may qualify for ODC, you will make the input in Part III on the same input screen.

[gk]

Hello sir,

Thank you so much your expert advise. I did following

1. Per your suggestion  I Checked the box in part 2 if client is eligible for benefits of Article 21(2) of U.S. - India Income Tax Treaty.

2.I removed the info i put it in Sch OI, Ln L 1B (ie 21(2)}.

3. Added standard ded $12200 in 1040 NR line 36A.

Kindly advise this is correct or not.

Gracemon

[itonewbie · Accepted solution]

NP, @gk!

That would be correct if you have no other income you are trying to exempt under the treaty.

#1 and #3 are essentially the same.  Once you check the box under #1, you shouldn't have to manually override anything for standard deduction.

If it solves your problem, you may consider marking it as a solution to help others who have similar questions.

Cheers!