Question

Interest Income tax for US non-residents

Forum|Forum|5 years ago
January 31, 2021
1 reply
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I am a US non-resident (Canada resident) for the whole of 2020. I have some interest income from my bank account in the US; the bank has already withheld some tax. The address mentioned on 1099-INT is my former US address in NJ and not my current Canadian address.

When reporting the interest income while filing tax returns, do I have to mention that the interest paid is tax exempt? Also, how do I determine that this is/is not tied to a US trade or business? This bank account was the one where I received my salary.

Not A Product Question

C

Cynthiad66

Nonresident Aliens who receive interest income from deposits with a U.S. bank, savings & loan institution, credit union, or insurance company, or who receive Portfolio Interest are exempt from taxation on such interest income as long as such interest income is not effectively connected with a United States trade or business.

Trade or business meaning that you had a business in US where these deposits were generate.

You can also use software like Sprintax to guide you through the non-resident tax return preparation process.

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