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Tax ReturnTax return 3. Tax return Exclusions From Gross Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident AliensForeign Earned Income and Housing Amount Nonresident AliensInterest Income Dividend Income Services Performed for Foreign Employer Gambling Winnings From Dog or Horse Racing Gain From the Sale of Your Main Home Scholarships and Fellowship GrantsExpenses that do not qualify. Tax return Introduction Resident and nonresident aliens are allowed exclusions from gross income if they meet certain conditions. Tax return An exclusion from gross income is generally income you receive that is not included in your U. Tax return S. Tax return income and is not subject to U. Tax return S. Tax return tax. Tax return This chapter covers some of the more common exclusions allowed to resident and nonresident aliens. Tax return Topics - This chapter discusses: Nontaxable interest, Nontaxable dividends, Certain compensation paid by a foreign employer, Gain from sale of home, and Scholarships and fellowship grants. Tax return Useful Items - You may want to see: Publication 54 Tax Guide for U. Tax return S. Tax return Citizens and Resident Aliens Abroad 523 Selling Your Home See chapter 12 for information about getting these publications. Tax return Resident Aliens Resident aliens may be able to exclude the following items from their gross income. Tax return Foreign Earned Income and Housing Amount If you are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, you may qualify for the foreign earned income exclusion. Tax return The exclusion is $97,600 in 2013. Tax return In addition, you may be able to exclude or deduct certain foreign housing amounts. Tax return You may also qualify if you are a bona fide resident of a foreign country and you are a citizen or national of a country with which the United States has an income tax treaty. Tax return For more information, see Publication 54. Tax return Foreign country. Tax return A foreign country is any territory under the sovereignty of a government other than that of the United States. Tax return The term “foreign country” includes the country's territorial waters and airspace, but not international waters and the airspace above them. Tax return It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. Tax return The term “foreign country” does not include U. Tax return S. Tax return possessions or territories. Tax return It does not include the Antarctic region. Tax return Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. Tax return Interest Income Interest income that is not connected with a U. Tax return S. Tax return trade or business is excluded from income if it is from: Deposits (including certificates of deposit) with persons in the banking business, Deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law (if the interest paid or credited can be deducted by the association), and Amounts held by an insurance company under an agreement to pay interest on them. Tax return State and local government obligations. Tax return Interest on obligations of a state or political subdivision, the District of Columbia, or a U. Tax return S. Tax return possession, generally is not included in income. Tax return However, interest on certain private activity bonds, arbitrage bonds, and certain bonds not in registered form is included in income. Tax return Portfolio interest. Tax return Interest and original issue discount that qualifies as portfolio interest is not subject to NRA withholding. Tax return To qualify as portfolio interest, the interest must be paid on obligations issued after July 18, 1984, and otherwise subject to NRA withholding. Tax return Note. Tax return For obligations issued after March 18, 2012, portfolio interest does not include interest paid on debt that is not in registered form. Tax return Before March 19, 2012, portfolio interest included interest on certain registered and nonregistered (bearer) bonds if the obligations meet the requirements described below. Tax return Obligations in registered form. Tax return Portfolio interest includes interest paid on an obligation that is in registered form, and for which you have received documentation that the beneficial owner of the obligation is not a United States person. Tax return Generally, an obligation is in registered form if: (i) the obligation is registered as to both principal and any stated interest with the issuer (or its agent) and any transfer of the obligation may be effected only by surrender of the old obligation and reissuance to the new holder; (ii) the right to principal and stated interest with respect to the obligation may be transferred only through a book entry system maintained by the issuer or its agent; or (iii) the obligation is registered as to both principal and stated interest with the issuer or its agent and can be transferred both by surrender and reissuance and through a book entry system. Tax return An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular time if it can be converted at any time in the future into an obligation that is not in registered form. Tax return For more information on whether obligations are considered to be in registered form, see Portfolio interest in Publication 515. Tax return Obligations not in registered form. Tax return For obligations issued before March 19, 2012, interest on an obligation that is not in registered form (bearer obligation) is portfolio interest if the obligation is foreign-targeted. Tax return A bearer obligation is foreign-targeted if: There are arrangements to ensure that the obligation will be sold, or resold in connection with the original issue, only to a person who is not a United States person, Interest on the obligation is payable only outside the United States and its possessions, and The face of the obligation contains a statement that any United States person who holds the obligation will be subject to limits under the United States income tax laws. Tax return Documentation is not required for interest on bearer obligations to qualify as portfolio interest. Tax return In some cases, however, you may need documentation for purposes of Form 1099 reporting and backup withholding. Tax return Interest that does not qualify as portfolio interest. Tax return Payments to certain persons and payments of contingent interest do not qualify as portfolio interest. Tax return You must withhold at the statutory rate on such payments unless some other exception, such as a treaty provision, applies. Tax return Contingent interest. Tax return Portfolio interest does not include contingent interest. Tax return Contingent interest is either of the following: Interest that is determined by reference to: Any receipts, sales, or other cash flow of the debtor or related person, Income or profits of the debtor or related person, Any change in value of any property of the debtor or a related person, or Any dividend, partnership distributions, or similar payments made by the debtor or a related person. Tax return For exceptions, see Internal Revenue Code section 871(h)(4)(C). Tax return Any other type of contingent interest that is identified by the Secretary of the Treasury in regulations. Tax return Related persons. Tax return Related persons include the following. Tax return Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. Tax return ), and lineal descendants (children, grandchildren, etc. Tax return ). Tax return Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules. Tax return Certain corporations, partnerships, and other entities. Tax return For details, see Nondeductible Loss in chapter 2 of Publication 544. Tax return Exception for existing debt. Tax return Contingent interest does not include interest paid or accrued on any debt with a fixed term that was issued: On or before April 7, 1993, or After April 7, 1993, pursuant to a written binding contract in effect on that date and at all times thereafter before that debt was issued. Tax return Dividend Income The following dividend income is exempt from the 30% tax. Tax return Certain dividends paid by foreign corporations. Tax return There is no 30% tax on U. Tax return S. Tax return source dividends you receive from a foreign corporation. Tax return See Second exception under Dividends in chapter 2 for how to figure the amount of U. Tax return S. Tax return source dividends. Tax return Certain interest-related dividends. Tax return There is no 30% tax on interest-related dividends from sources within the United States that you receive from a mutual fund or other regulated investment company in 2013. Tax return The mutual fund will designate in writing which dividends are interest-related dividends. Tax return Certain short-term capital gain dividends. Tax return There may not be any 30% tax on certain short-term capital gain dividends from sources within the United States that you receive from a mutual fund or other regulated investment company. Tax return The mutual fund will designate in writing which dividends are short-term capital gain dividends. Tax return This tax relief will not apply to you if you are present in the United States for 183 days or more during your tax year. Tax return Services Performed for Foreign Employer If you were paid by a foreign employer, your U. Tax return S. Tax return source income may be exempt from U. Tax return S. Tax return tax, but only if you meet one of the situations discussed next. Tax return Employees of foreign persons, organizations, or offices. Tax return Income for personal services performed in the United States as a nonresident alien is not considered to be from U. Tax return S. Tax return sources and is tax exempt if you meet all three of the following conditions. Tax return You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U. Tax return S. Tax return corporation, a U. Tax return S. Tax return partnership, or a U. Tax return S. Tax return citizen or resident. Tax return You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year. Tax return Your pay for these services is not more than $3,000. Tax return If you do not meet all three conditions, your income from personal services performed in the United States is U. Tax return S. Tax return source income and is taxed according to the rules in chapter 4. Tax return If your pay for these services is more than $3,000, the entire amount is income from a trade or business within the United States. Tax return To find if your pay is more than $3,000, do not include any amounts you get from your employer for advances or reimbursements of business travel expenses, if you were required to and did account to your employer for those expenses. Tax return If the advances or reimbursements are more than your expenses, include the excess in your pay for these services. Tax return A day means a calendar day during any part of which you are physically present in the United States. Tax return Example 1. Tax return During 2013, Henry Smythe, a nonresident alien from a nontreaty country, worked for an overseas office of a U. Tax return S. Tax return partnership. Tax return Henry, who uses the calendar year as his tax year, was temporarily present in the United States for 60 days during 2013 performing personal services for the overseas office of the partnership. Tax return That office paid him a total gross salary of $2,800 for those services. Tax return During 2013, he was not engaged in a trade or business in the United States. Tax return The salary is not considered U. Tax return S. Tax return source income and is exempt from U. Tax return S. Tax return tax. Tax return Example 2. Tax return The facts are the same as in Example 1, except that Henry's total gross salary for the services performed in the United States during 2013 was $4,500. Tax return He received $2,875 in 2013, and $1,625 in 2014. Tax return During 2013, he was engaged in a trade or business in the United States because the compensation for his personal services in the United States was more than $3,000. Tax return Henry's salary is U. Tax return S. Tax return source income and is taxed under the rules in chapter 4. Tax return Crew members. Tax return Compensation for services performed by a nonresident alien in connection with the individual's temporary presence in the United States as a regular crew member of a foreign vessel (for example, a boat or ship) engaged in transportation between the United States and a foreign country or U. Tax return S. Tax return possession is not U. Tax return S. Tax return source income and is exempt from U. Tax return S. Tax return tax. Tax return This exemption does not apply to compensation for services performed on foreign aircraft. Tax return Students and exchange visitors. Tax return Nonresident alien students and exchange visitors present in the United States under “F,” “J,” or “Q” visas can exclude from gross income pay received from a foreign employer. Tax return This group includes bona fide students, scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a field of specialized knowledge or skill, or persons of similar description. Tax return It also includes the alien's spouse and minor children if they come with the alien or come later to join the alien. Tax return A nonresident alien temporarily present in the United States under a “J” visa includes an alien individual entering the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. Tax return Foreign employer. Tax return A foreign employer is: A nonresident alien individual, foreign partnership, or foreign corporation, or An office or place of business maintained in a foreign country or in a U. Tax return S. Tax return possession by a U. Tax return S. Tax return corporation, a U. Tax return S. Tax return partnership, or an individual who is a U. Tax return S. Tax return citizen or resident. Tax return The term “foreign employer” does not include a foreign government. Tax return Pay from a foreign government that is exempt from U. Tax return S. Tax return income tax is discussed in chapter 10. Tax return Income from certain annuities. Tax return Do not include in income any annuity received under a qualified annuity plan or from a qualified trust exempt from U. Tax return S. Tax return income tax if you meet both of the following conditions. Tax return You receive the annuity only because: You performed personal services outside the United States while you were a nonresident alien, or You performed personal services inside the United States while you were a nonresident alien and you met the three conditions, described earlier, under Employees of foreign persons, organizations, or offices . Tax return At the time the first amount is paid as an annuity under the plan (or by the trust), 90% or more of the employees for whom contributions or benefits are provided under the annuity plan (or under the plan of which the trust is a part) are U. Tax return S. Tax return citizens or residents. Tax return If the annuity qualifies under condition (1) but not condition (2) above, you do not have to include the amount in income if: You are a resident of a country that gives a substantially equal exclusion to U. Tax return S. Tax return citizens and residents, or You are a resident of a beneficiary developing country under Title V of the Trade Act of 1974. Tax return If you are not sure whether the annuity is from a qualified annuity plan or qualified trust, ask the person who made the payment. Tax return Income affected by treaties. Tax return Income of any kind that is exempt from U. Tax return S. Tax return tax under a treaty to which the United States is a party is excluded from your gross income. Tax return Income on which the tax is only limited by treaty, however, is included in gross income. Tax return See chapter 9. Tax return Gambling Winnings From Dog or Horse Racing You can exclude from your gross income winnings from legal wagers initiated outside the United States in a parimutuel pool with respect to a live horse or dog race in the United States. Tax return Gain From the Sale of Your Main Home If you sold your main home, you may be able to exclude up to $250,000 of the gain on the sale of your home. Tax return If you are married and file a joint return, you may be able to exclude up to $500,000. Tax return For information on the requirements for this exclusion, see Publication 523. Tax return This exclusion does not apply to nonresident aliens who are subject to the expatriation tax rules discussed in chapter 4. Tax return Scholarships and Fellowship Grants If you are a candidate for a degree, you may be able to exclude from your income part or all of the amounts you receive as a qualified scholarship. Tax return The rules discussed here apply to both resident and nonresident aliens. Tax return If a nonresident alien receives a grant that is not from U. Tax return S. Tax return sources, it is not subject to U. Tax return S. Tax return tax. Tax return See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U. Tax return S. Tax return sources. Tax return A scholarship or fellowship is excludable from income only if: You are a candidate for a degree at an eligible educational institution, and You use the scholarship or fellowship to pay qualified education expenses. Tax return Candidate for a degree. Tax return You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. Tax return Eligible educational institution. Tax return An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. Tax return Qualified education expenses. Tax return These are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. Tax return These items must be required of all students in your course of instruction. Tax return However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses. Tax return Expenses that do not qualify. Tax return Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. Tax return This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. Tax return Scholarship or fellowship amounts used to pay these costs are taxable. Tax return Amounts used to pay expenses that do not qualify. Tax return A scholarship amount used to pay any expense that does not qualify is taxable, even if the expense is a fee that must be paid to the institution as a condition of enrollment or attendance. Tax return Payment for services. Tax return You cannot exclude from income the portion of any scholarship, fellowship, or tuition reduction that represents payment for past, present, or future teaching, research, or other services. Tax return This is true even if all candidates for a degree are required to perform the services as a condition for receiving the degree. Tax return Example. Tax return On January 7, Maria Gomez is notified of a scholarship of $2,500 for the spring semester. Tax return As a condition for receiving the scholarship, Maria must serve as a part-time teaching assistant. Tax return Of the $2,500 scholarship, $1,000 represents payment for her services. Tax return Assuming that Maria meets all other conditions, she can exclude no more than $1,500 from income as a qualified scholarship. Tax return Prev Up Next Home More Online Publications
Replace Your Vital Documents
Fortunately, you can replace most important personal records. Use these links as a starting point.
- Address Change – When you move, be sure to change your address with the Post Office, IRS, and other government agencies, so that you'll continue to receive mail and any government benefits at your new location.
- Birth, Marriage, and Death Certificates – Get records based on the location of the birth, death, marriage, or divorce.
- Damaged Money – The Treasury Department will exchange mutilated or damaged U.S. currency.
- Drivers' Licenses and Vehicle Registration – Find your state's motor vehicle department to get or replace your driver's license, and register your car.
- Federal Civilian Personnel Records – Go to the National Archives website for guidance on requesting personnel records for former federal civilian employees. Current federal workers can get personnel records from their human resources office.
- Green Card Replacement – Get instructions on how to replace a lost, stolen, or damaged permanent resident card (green card).
- Medicare Card Replacement – Learn how to replace a lost, stolen, or damaged Medicare card.
- Military Service Records – Get copies of military service records, to prove military service or to research genealogy.
- Passport – Report your lost or stolen passport immediately. Contact the nearest U.S. embassy or consulate if your passport is lost or stolen overseas.
- Replace a Savings Bond – Replace lost, stolen, or destroyed paper savings bonds.
- Saving Family Treasures – The National Archives provides guidelines for the care for some of the more common materials affected by natural disasters or other emergencies.
- School Records – Contact your former school or the appropriate school district if the school has closed.
- Social Security Card Replacement – Learn how to replace your lost or stolen Social Security card.
- Tax Return – Request a copy of your federal tax return from the Internal Revenue Service (IRS).