The tax treaty between the U.S. and the countries listed in the following table allows for the tax treaty to be claimed on resident returns. The tax treaties do not have a time limitation as long as the F- or J-1 student is a student in good standing, including the period the student is engaged in practical/academic training after graduation.

This means that even after a student from one of these countries becomes a resident for tax purposes under the substantial presence test, they may still claim the tax treaty benefit.

The tax treaty, by country, allows:

Bangladesh	$8,000 annual wage exemption	Article 21(2)
Belgium	$9,000 annual wage exemption	Article 19(1)(b)
Bulgaria	$9,000 annual wage exemption	Article 19(1)(b)
China	$5,000 annual wage exemption	Article 20(c)
China	Unlimited scholarship exemption	Article 20(b)
Germany	Unlimited scholarship exemption	Article 20(3)
Malta	$9,000 annual wage exemption	Article 20(2)
Netherlands	$2,000 annual wage exemption	Article 22(1)
Pakistan	$5,000 annual wage exemption	Article XIII(1)
Pakistan	Unlimited scholarship exemption	Article XIII(1)

To claim the tax treaty on a resident return:

• File as a resident alien for tax purposes using Form 1040.
• Report all income (including tax treaty exempt income), as appropriate, in the return.
• On Schedule 1, Line 8z (Other Income), enter a negative number for the total amount of the tax treaty exemption being claimed. ⁽¹⁾
• After “List type and amount” on Schedule 1, Line 8z, write “U.S./{country} tax treaty, Article {article number}”⁽¹⁾
• Carry the total in Schedule 1, Line 10 to Form 1040, Line 8. In effect, the amount of Form 1040, Line 9 (total income) will reflect your income minus the exempted amount from the tax treaty.
• Print the entire return, including Schedule 1. Sign the form as appropriate.
• On the top of all pages, write “Resident Alien With Tax Treaty Exemption”
• Complete and print Form 8833 for each type of income you are excluding. This form is not provided in any tax software package, so you will need to paper file your return with this form attached.
  • Instructions for Completing Form 8833
• Complete and print Schedule OI. Only complete section L.
• If you received a Form 1042-S, attach Copy C to the return.
• Assemble the return as follows.
  1. Form 1040
  2. Schedule 1
  3. Form(s) 8833
  4. Schedule OI
  5. Form(s) 1042-S, if applicable
• Mail the return using the instructions provided by the IRS.

 

⁽¹⁾ For Turbotax, you would enter this information in Federal > income and expenses > less common income > miscellaneous income > other reportable income