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How to claim the US-China tax treaty?

Forum|Forum|6 years ago
June 7, 2019
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I am an international student pursuing a PhD degree. My tax status changed from non-resident alien to resident alien in 2016. The US-China tax treaty Article 20 states students have some credits for tax. How could I claim it? I didn't receive the 1042-S form. I know that I have to include the form 8833 on my tax return generated by TurboTax. But how should I do that?

TurboTax Free Edition Online

Best answer by PopeyeTheSalior

You can still apply the tax treaty to your tax return with our software, you will just enter it differently than the normal way. In the TurboTax program, report your full income usual. Then you can enter the treaty-exempt amount as negative income under "Less common income". You will have to file a Form 8833 to claim an exception. As TurboTax does not support Form 8833, you cannot e-file. Instead, you may use the program to prepare your return, but need to print out your tax forms and mail the returns along with the form 8833. Besides the Form 8833 and 1040, you will also need to submit a copy of your tax documents ( for example, W-2 /Form 1099s) which pertain to any credits and deductions you are applying if there are any.

1. For example, if you receive a Form W-2, to report wages:

- Sign into your account and select Take me to my return

- At the right upper corner, in the search box, type in W-2 and Enter

- Select Jump to w-2, follow prompts to enter your information

2. Enter the treaty-exempt amount as negative amount (-5000) under Federal Taxes / Less Common Income / Miscellaneous Income 1099A, 1099C / Other Reportable Income

3. File a Form 8833 from IRS to claim an exception. https://www.irs.gov/pub/irs-pdf/f8833.pdf

P

purelandamita

I have faced the same situation, how did it go for you? ??????

PopeyeTheSaliorAnswer

Employee

You can still apply the tax treaty to your tax return with our software, you will just enter it differently than the normal way. In the TurboTax program, report your full income usual. Then you can enter the treaty-exempt amount as negative income under "Less common income". You will have to file a Form 8833 to claim an exception. As TurboTax does not support Form 8833, you cannot e-file. Instead, you may use the program to prepare your return, but need to print out your tax forms and mail the returns along with the form 8833. Besides the Form 8833 and 1040, you will also need to submit a copy of your tax documents ( for example, W-2 /Form 1099s) which pertain to any credits and deductions you are applying if there are any.

1. For example, if you receive a Form W-2, to report wages:

- Sign into your account and select Take me to my return

- At the right upper corner, in the search box, type in W-2 and Enter

- Select Jump to w-2, follow prompts to enter your information

2. Enter the treaty-exempt amount as negative amount (-5000) under Federal Taxes / Less Common Income / Miscellaneous Income 1099A, 1099C / Other Reportable Income

3. File a Form 8833 from IRS to claim an exception. https://www.irs.gov/pub/irs-pdf/f8833.pdf

M

manjuli4Author

Should I have to upgrade free edition to deluxe edition?

C

ChongPeng

Does this still apply for 2019 tax return?

DaveF1006

According to the Bloomberg Management Journal, US and China still maintains a tax treaty. Please select this link for verification.

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F

frankshufang

For the 2019 tax filing, I cannot enter the other reportable income under the miscellaneous income. How should I get this done?

ReneeM7122

Most international students are not eligible to claim education tax credits. International students who may be eligible are:

Permanent residents married to a U.S. citizen
Permanent residents

The U.S. - China TaxTreaty states that that students can be exempt from tax. This is not the same as a tax credit.

ARTICLE 20 (Students and Trainees)

A student, business apprentice or trainee who is, or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first- mentioned Contracting State solely for the purpose of his education, training or obtaining special technical experience shall be exempt from tax in that Contracting State with respect to: (a) payments received from abroad for the purpose of his maintenance, education, study, research or training; (b) grants or awards from a government, scientific, educational or other tax-exempt organization; and (c) income from personal services performed in that Contracting State in an amount not in excess of 5,000 United States dollars or its equivalent in Chinese yuan for any taxable year. The benefits provided under this Article shall extend only for such period of time as is reasonably necessary to complete the education or training.

TIP:

You may want to complete Form W-8BEN, claim a tax treaty, and give it to your school and / or and employer(s). This will help avoid the automatic higher withholding rate when payments are made to you in excess of $5,000, which was mentioned in the treaty. Download the form from the link provided above and complete it on your own outside of TurboTax.

How to file a tax return with Form 8833

You'll need to file your tax return by mail. Unfortunately, you can't eFile your return with Form 8833, and you shouldn't eFile your return separately and send in Form 8833. Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), cannot be electronically filed.

S

sophy

03-15-2022. Need to upgrade to the deluxe version. IRS accepted my e-file with the 5000 US-China tax treaty. Do I still need to mail it?

DaveF1006

No, you shouldn't need to mail it unless Turbo Tax gave you specific instructions to mail in specific forms. If no instruction exists, then you do not need to mail.

@sophy

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