Instructions For Form 1040nr-Ez - 2010 (Page 5 of 24) in pdf

For example, $1.39 becomes $1 and

2010, you must use Form 1040NR. The

include the amount shown in box 2 of

$2.50 becomes $3.

benefits should be shown in box 12 of

Form(s) 1042-S on line 5. However, if

your Form(s) W-2, with code T.

any or all of that amount is exempt by

If you have to add two or more

treaty, do not include the treaty-exempt

Tax-exempt interest. Certain types

amounts to figure the amount to enter

amount on line 5. Instead, include the

of interest income from investments in

on a line, include cents when adding

treaty-exempt amount on line 6 and

the amounts and round off only the

state and municipal bonds and similar

complete item J of Schedule OI on

instruments are not taxed by the United

total.

page 2 of Form 1040NR-EZ.

States. If you received such tax-exempt

interest income, enter “TEI” and the

Attach any Form(s) 1042-S you

Taxable Income

amount of your tax-exempt interest on

received from the college or institution.

the dotted line next to line 3. Include

If you did not receive a Form 1042-S,

Line 3 — Wages, salaries, tips, etc.

any exempt-interest dividends from a

attach a statement from the college or

Enter the total of your effectively

mutual fund or other regulated

institution (on their letterhead) showing

connected wages, salaries, tips, etc.

investment company. Do not include

the details of the grant.

Only U.S. source income is included on

interest earned on your individual

For more information about

line 3 as effectively connected wages.

retirement arrangement (IRA), health

scholarships and fellowships in general,

For most people, the amount to enter

savings account, Archer or Medicare

see Pub. 970, Tax Benefits for

on this line should be shown in box 1 of

Advantage MSA, or Coverdell

Education.

their Form(s) W-2.

education savings account. Also, do not

Example 1. You are a citizen of a

include interest from a U.S. bank,

Do not include on line 3

country that does not have an income

savings and loan association, credit

amounts exempted under a tax

tax treaty in force with the United

union, or similar institution (or from

treaty. Instead, include these

CAUTION

States. You are a candidate for a

certain deposits with U.S. insurance

amounts on line 6 and complete item J

degree at ABC University (located in

companies) that is exempt from tax

of Schedule OI on page 2 of Form

the United States). You are receiving a

under a tax treaty or under section

1040NR-EZ.

full scholarship from ABC University.

871(i) because the interest is not

The total amounts you received from

effectively connected with a U.S. trade

Also include on line 3:

ABC University during 2010 are as

or business. Do not add any

•

Wages received as a household

follows:

tax-exempt interest to your line 3 total.

employee for which you did not receive

Line 4 — Taxable refunds, credits, or

a Form W-2 because your employer

Tuition and fees

$25,000

offsets of state and local income

paid you less than $1,700 in 2010.

Books, supplies,

taxes. If you received a refund, credit,

Also, enter “HSH” and the amount not

and equipment

1,000

or offset of state or local income taxes

reported on a Form W-2 on the dotted

Room and

in 2010, you may receive a

line next to line 3.

board

9,000

•

Form 1099-G. If you chose to apply

Tip income you did not report to your

$35,000

part or all of the refund to your 2010

employer. Also include allocated tips

estimated state or local income tax, the

shown on your Form(s) W-2 unless you

The Form 1042-S you received from

amount applied is treated as received

can prove that you received less.

ABC University for 2010 shows $9,000

in 2010.

Allocated tips should be shown in box 8

in box 2 and $1,260 (14% of $9,000) in

of your Form(s) W-2. They are not

box 9.

None of your refund is taxable if,

included as income in box 1. See Pub.

in the year you paid the tax, you

TIP

Note. Box 2 shows only $9,000

531, Reporting Tip Income, for more

did not itemize deductions. If

because withholding agents (such as

details.

you were a student or business

ABC University) are not required to

apprentice from India in 2009 and you

report section 117 amounts (tuition,

You may owe social security

claimed the standard deduction on your

fees, books, supplies, and equipment)

and Medicare tax on unreported

2009 tax return, none of your refund is

on Form 1042-S.

or allocated tips. See the

CAUTION

taxable. See Students and business

instructions for line 16 on page 6.

When completing Form 1040NR-EZ:

•

apprentices from India in chapter 5 of

Disability pensions shown on

•

Enter on line 5 the $9,000 shown in

Pub. 519. If none of your refund is

Form 1042-S or Form 1099-R if you

box 2 of Form 1042-S.

taxable, leave line 4 blank.

have not reached the minimum

•

Enter $0 on line 8. Because

retirement age set by your employer.

For details on how to figure the

section 117 amounts (tuition, fees,

amount you must report as income, see

Note. You must use Form 1040NR to

books, supplies, and equipment) were

Recoveries in Pub. 525, Taxable and

report disability pensions received after

not included in box 2 of your

Nontaxable Income.

you reach your employer’s minimum

Form 1042-S (and are not included on

Line 5 — Scholarship and fellowship

retirement age and other payments

line 5 of Form 1040NR-EZ), you cannot

grants. If you received a scholarship

shown on Form 1042-S or Form

exclude any of the section 117 amounts

1099-R.

or fellowship, part or all of it may be

on line 8.

•

taxable.

Wages from Form 8919, line 6.

Include on line 18b the $1,260 shown

in box 9 of Form 1042-S.

Missing or incorrect Form W-2.

If you were a degree candidate, the

amounts you used for expenses other

Your employer is required to provide or

Example 2. The facts are the same

than tuition and course-related

send Form W-2 to you no later than

as in Example 1 except that you are a

expenses (fees, books, supplies, and

January 31, 2011. If you do not receive

citizen of a country that has an income

equipment) are generally taxable. For

it by early February, ask your employer

tax treaty in force with the United

example, amounts used for room,

for it. Even if you do not get a Form

States that includes a provision that

board, and travel are generally taxable.

W-2, you still must report your earnings

exempts scholarship income and you

on line 3. If you lose your Form W-2 or

If you were not a degree candidate,

were a resident of that country

it is incorrect, ask your employer for a

immediately before leaving for the

the full amount of the scholarship or

new one.

fellowship is generally taxable. Also,

United States to attend ABC University.

Also, assume that, under the terms of

Dependent care benefits. If you

amounts received in the form of a

the tax treaty, all of your scholarship

scholarship or fellowship that are

received benefits for 2010 under your

payment for teaching, research, or

income is exempt from tax because

employer’s dependent care plan, you

ABC University is a nonprofit

must use Form 1040NR. The benefits

other services are generally taxable as

educational organization.

wages even if the services were

should be shown in box 10 of your

required to get the grant.

Form(s) W-2.

Note. Many tax treaties do not permit

Adoption benefits. If you received

If the grant was reported on

an exemption from tax on scholarship

employer-provided adoption benefits for

Form(s) 1042-S, you generally must

or fellowship grant income unless the

-5-

Instructions for Form 1040NR-EZ (2010)

Instructions For Form 1040nr-Ez - 2010 Page 5

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