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Can Tax Treaty between US and China be applied to scholarships or grants on 1098T

Forum|Forum|6 years ago
March 1, 2020
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I am a Chinese student and I am a resident alien for tax purpose. On my 1098T, amount in box 1 is 13175 and amount in box 5 is 17523. Can I apply the tax treaty to exempt the $17523 for tax?

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Best answer by linaj20201

Generally, you should qualify. However, please read carefully to see if you meet the requirements. Click here: https://www.irs.gov/pub/irs-pdf/p901.pdf, page 19 under "China, People's Republic of"

To enter the tax treaty exemption in the program, here are the steps:

Enter your Form 1098-T as usual. This generates a taxable scholarship amount
Then enter the treaty-exempt amount as negative amount (e.g. -5000) under Federal Taxes / Less Common Income / Miscellaneous Income 1099A, 1099C / Other Reportable Income
Download and fill in a Form 8833 to claim an exception. https://www.irs.gov/pub/irs-pdf/f8833.pdf
You cannot e-file. You can still use the TurboTax program to prepare your tax forms, but you need to print them out and submit them to IRS by mail along with Form 8833.

L

linaj20201Answer

Generally, you should qualify. However, please read carefully to see if you meet the requirements. Click here: https://www.irs.gov/pub/irs-pdf/p901.pdf, page 19 under "China, People's Republic of"

To enter the tax treaty exemption in the program, here are the steps:

Enter your Form 1098-T as usual. This generates a taxable scholarship amount
Then enter the treaty-exempt amount as negative amount (e.g. -5000) under Federal Taxes / Less Common Income / Miscellaneous Income 1099A, 1099C / Other Reportable Income
Download and fill in a Form 8833 to claim an exception. https://www.irs.gov/pub/irs-pdf/f8833.pdf
You cannot e-file. You can still use the TurboTax program to prepare your tax forms, but you need to print them out and submit them to IRS by mail along with Form 8833.