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2011 1040

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2011 1040

2011 1040 Publication 901 - Main Content Table of Contents Application of Treaties Tax Exemptions Provided by TreatiesPersonal Services Income Professors, Teachers, and Researchers Students and Apprentices Wages and Pensions Paid by a Foreign Government Explanation of TablesTable 1 Table 2 Table 3 Application of Treaties The United States has income tax treaties with a number of foreign countries. 2011 1040 Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. 2011 1040 S. 2011 1040 income taxes on certain items of income they receive from sources within the United States. 2011 1040 These reduced rates and exemptions vary among countries and specific items of income. 2011 1040 If there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR. 2011 1040 Also see Publication 519. 2011 1040 Many of the individual states of the United States tax the income of their residents. 2011 1040 Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income. 2011 1040 Tax treaties reduce the U. 2011 1040 S. 2011 1040 taxes of residents of foreign countries. 2011 1040 With certain exceptions, they do not reduce the U. 2011 1040 S. 2011 1040 taxes of U. 2011 1040 S. 2011 1040 citizens or residents. 2011 1040 U. 2011 1040 S. 2011 1040 citizens and residents are subject to U. 2011 1040 S. 2011 1040 income tax on their worldwide income. 2011 1040 Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. 2011 1040 S. 2011 1040 citizen or resident who receives income from a treaty country may refer to the tables in this publication to see if a tax treaty might affect the tax to be paid to that foreign country. 2011 1040 Foreign taxing authorities sometimes require certification from the U. 2011 1040 S. 2011 1040 Government that an applicant filed an income tax return as a U. 2011 1040 S. 2011 1040 citizen or resident, as part of the proof of entitlement to the treaty benefits. 2011 1040 See Form 8802, Application for United States Residency Certification, to request a certification. 2011 1040 Disclosure of a treaty-based position that reduces your tax. 2011 1040   If you take the position that any U. 2011 1040 S. 2011 1040 tax is overruled or otherwise reduced by a U. 2011 1040 S. 2011 1040 treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. 2011 1040 If you are not required to file a return because of your treaty-based position, you must file a return anyway to report your position. 2011 1040 The filing of Form 8833 does not apply to a reduced rate of withholding tax on noneffectively connected income, such as dividends, interest, rents or royalties, or to a reduced rate of tax on pay received for services performed as an employee, including pensions, annuities, and social security. 2011 1040 For more information, see Publication 519 and the Form 8833 instructions. 2011 1040   If you fail to file Form 8833, you may have to pay a $1,000 penalty. 2011 1040 Corporations are subject to a $10,000 penalty for each failure. 2011 1040 Tax Exemptions Provided by Treaties In addition to the tables in the back of this publication, this publication contains discussions of the exemptions from tax and certain other effects of the tax treaties on the following types of income. 2011 1040 Pay for certain personal services performed in the United States. 2011 1040 Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. 2011 1040 Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. 2011 1040 Wages, salaries, and pensions paid by a foreign government. 2011 1040 Personal Services Income Pay for certain personal services performed in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if you are a resident of one of the countries discussed below, if you are in the United States for a limited number of days, and if you meet certain other conditions. 2011 1040 For this purpose, the word “day” means a day during any part of which you are physically present in the United States. 2011 1040 Terms defined. 2011 1040   Several terms appear in many of the discussions that follow. 2011 1040 The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. 2011 1040 The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. 2011 1040   The terms fixed base and permanent establishment generally mean a fixed place of business, such as a place of management, a branch, an office, a factory, a warehouse, or a mining site, through which an enterprise carries on its business. 2011 1040   The term borne by generally means having ultimate financial accounting responsibility for, or providing the monetary resources for, an expenditure or payment, even if another entity in another location actually made the expenditure or payment. 2011 1040 Australia Income that residents of Australia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Pay that residents of Australia receive for labor or personal services performed in the United States as employees (dependent personal services), including services as a director of a company, is exempt from U. 2011 1040 S. 2011 1040 income tax if: The residents are in the United States for no more than 183 days during the tax year, The pay is paid by, or on behalf of, an employer or company that is not a resident of the United States, and The pay is not deductible in determining the taxable income of the trade or business of the employer (or company) in the United States. 2011 1040 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Australia who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Austria Income that residents of Austria receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Austria who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Income received by a resident of Austria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 Bangladesh Income that residents of Bangladesh receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, or Do not have a fixed base regularly available to them in the United States for the purpose of performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to pubic entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Bangladesh who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Regardless of these limits, income of Bangladesh entertainers is exempt from U. 2011 1040 S. 2011 1040 income tax if their visit to the United States is wholly or mainly supported by public funds of Bangladesh, its political subdivisions, or local authorities. 2011 1040 Income received from employment as a member of the regular complement of a ship or an aircraft operated by a Bangladesh enterprise in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 If the ship or aircraft is operated by a U. 2011 1040 S. 2011 1040 enterprise, the income is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 If the resident of Bangladesh is a shareholder in a U. 2011 1040 S. 2011 1040 corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. 2011 1040 S. 2011 1040 corporation. 2011 1040 The amount received by the shareholder that is more than the amount paid to a director that is not a shareholder is subject to U. 2011 1040 S. 2011 1040 tax at the rate of 15%. 2011 1040 Barbados Income that residents of Barbados receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Earn net income for independent services provided to U. 2011 1040 S. 2011 1040 residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. 2011 1040 S. 2011 1040 residents), and Do not have a regular base available in the United States for performing the services. 2011 1040 If they have a regular base available in the United States but otherwise meet the conditions for exemption, they are taxed only on the income attributable to the regular base. 2011 1040 Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 tax if the residents meet four requirements. 2011 1040 They are in the United States for no more than 183 days during the calendar year. 2011 1040 The income earned in the calendar year in the United States is not more than $5,000. 2011 1040 Their income is paid by or for an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or regular base of the employer in the United States. 2011 1040 Income of a Barbadian resident from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to Barbadian resident public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $250 per day or $4,000 in the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 1040 However, the exemptions do apply regardless of these limits on gross receipts if the entertainer's visit to the United States is substantially supported by Barbadian public funds or if the entertainer's services are provided to a nonprofit organization. 2011 1040 Belgium Income that residents of Belgium receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 1040 Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 The exemption does not apply to directors' fees and similar payments received by a resident of Belgium for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Belgium who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Income received by a resident of Belgium for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 Bulgaria Income that residents of Bulgaria receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 1040 Under Article 5 (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 1040 Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 The exemption does not apply to directors' fees and similar payments received by a resident of Bulgaria as a member of the board of directors of a U. 2011 1040 S. 2011 1040 company. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Bulgaria who earn more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Income received by a resident of Bulgaria for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 Canada Income that residents of Canada receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article VII (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 1040 Under Article V (Permanent Establishment), you may be considered to provide services through a permanent establishment in the United States even if you do not have a fixed place of business. 2011 1040 Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 tax if it is not more than $10,000 for the year. 2011 1040 If the income is more than $10,000 for the year, it is exempt only if: The residents are present in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and The income is not paid by, or on behalf of, a U. 2011 1040 S. 2011 1040 resident, and is not borne by a permanent establishment in the United States. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Canada who derive more than $15,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the calendar year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 However, this article does not apply to athletes participating in team sports in leagues with regularly scheduled games in both Canada and the United States. 2011 1040 Pay received by a resident of Canada for employment regularly done in more than one country on a ship, aircraft, motor vehicle, or train operated by a Canadian resident is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 China, People's Republic of Income that residents of the People's Republic of China receive for personal services as independent contractors or self-employed individuals (independent personal services) that they perform during the tax year in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are present in the United States for no more than 183 days in the calendar year, and Do not have a fixed base regularly available in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 1040 Pay received by residents of the People's Republic of China for services performed as employees (dependent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 tax if: The residents are present in the United States for no more than 183 days in the calendar year, The pay is paid by or for an employer who is not a U. 2011 1040 S. 2011 1040 resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees for service on the board of directors of a U. 2011 1040 S. 2011 1040 corporation. 2011 1040 These exemptions generally do not apply to income received as a public entertainer (such as a theater, motion picture, radio, or television artist, musician, or athlete). 2011 1040 However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. 2011 1040 S. 2011 1040 and Chinese governments is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 Commonwealth of Independent States Income that residents of a C. 2011 1040 I. 2011 1040 S. 2011 1040 member receive for performing personal services in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if those residents are in the United States for no more than 183 days during the tax year. 2011 1040 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated in international traffic by a C. 2011 1040 I. 2011 1040 S. 2011 1040 member or a resident of a C. 2011 1040 I. 2011 1040 S. 2011 1040 member is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 Cyprus Income that residents of Cyprus receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are present in the United States for less than 183 days in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. 2011 1040 Pay received by residents of Cyprus from services performed as employees (dependent personal services), including services as an officer of a corporation, is exempt from U. 2011 1040 S. 2011 1040 income tax if: The residents are in the United States for less than 183 days during the tax year, The pay is paid by or for an employer who is not a U. 2011 1040 S. 2011 1040 resident, and The pay is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 1040 Pay received by a Cyprus resident for performing personal services as an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of Cyprus is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to Cyprus resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes) who receive gross receipts of more than $500 per day or $5,000 for the tax year, not including reimbursed expenses, from their entertainment activities in the United States. 2011 1040 Directors' fees received by residents of Cyprus for service on the board of directors of a U. 2011 1040 S. 2011 1040 corporation are exempt from U. 2011 1040 S. 2011 1040 income tax to the extent of a reasonable fixed amount payable to all directors for each day of attendance at directors' meetings held in the United States. 2011 1040 Czech Republic Income that residents of the Czech Republic receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are present in the United States for no more than 183 days in any 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 1040 Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following three requirements are met. 2011 1040 The resident is present in the United States for no more than 183 days in any 12-month period. 2011 1040 The income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to income residents of the Czech Republic receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year. 2011 1040 Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. 2011 1040 S. 2011 1040 income tax if their visit to the United States is substantially supported by public funds of the Czech Republic, its political subdivisions, or local authorities, or the visit is made pursuant to a specific arrangement between the United States and the Czech Republic. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of the Czech Republic as a member of the board of directors of a company that is a resident of the United States. 2011 1040 Income from employment as a member of the regular complement of a ship or aircraft operated by a Czech enterprise in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 If the ship or aircraft is operated by a U. 2011 1040 S. 2011 1040 enterprise, the income is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Denmark Income that residents of Denmark receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Denmark as a member of the board of directors of a company that is a resident of the United States. 2011 1040 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, and athletes) from Denmark who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Income received by a resident of Denmark for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 Egypt Income that residents of Egypt receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if they are in the United States for no more than 89 days during the tax year. 2011 1040 Income that residents of Egypt receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet four requirements. 2011 1040 They are in the United States for no more than 89 days during the tax year. 2011 1040 They are employees of a resident of, or a permanent establishment in, Egypt. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 Their income is subject to Egyptian tax. 2011 1040 This exemption does not apply to pay received by a resident of Egypt who is an employee and member of the regular complement of a ship or an aircraft operated in international traffic by a resident of the United States. 2011 1040 These exemptions do not apply to Egyptian resident public entertainers (theater, motion picture, radio, or television artists, musicians, or athletes), who earn income for services as public entertainers if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 1040 Estonia Income that residents of Estonia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following requirements are met. 2011 1040 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Estonia as a member of the board of directors or similar body of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a United States enterprise is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to income residents of Estonia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 1040 Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. 2011 1040 S. 2011 1040 income tax if their visit to the United States is wholly or mainly supported by public funds of Estonia, its political subdivisions, or local authorities. 2011 1040 Finland Income that residents of Finland receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Finland receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are in the United States for no more than 183 days during any 12-month period. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. 2011 1040 The exemption does not apply to pay received by a resident of Finland who is an employee and member of the regular complement of a ship or aircraft operated in international traffic by a resident of the United States. 2011 1040 These exemptions do not apply to income residents of Finland receive as public entertainers or sportsmen if the gross income, including reimbursed expenses, is more than $20,000 for their personal activities in the United States during the calendar year. 2011 1040 France Income that residents of France receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of France receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 Income for services performed by a resident of France as an employee and member of the regular complement of a ship or an aircraft operated in international traffic is exempt from tax in the United States. 2011 1040 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, or musicians), or sportsmen from France who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Regardless of these limits, income of French entertainers or sportsmen is exempt from U. 2011 1040 S. 2011 1040 tax if their visit is principally supported by public funds of France. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of France as a member of the board of directors of a company that is a resident of the United States. 2011 1040 Germany Income that residents of Germany receive for personal services as independent contractors or self-employed individuals are subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 1040 Income that residents of Germany receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 tax if the residents meet three requirements. 2011 1040 They are in the United States for no more than 183 days during the calendar year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 Pay received by a resident of Germany for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 The exemption does not apply to directors' fees and other similar payments received by a resident of Germany for services performed in the United States as a member of the board of directors of a company resident in the United States. 2011 1040 Income residents of Germany receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes is subject to U. 2011 1040 S. 2011 1040 tax if their gross receipts, including reimbursed expenses, from their entertainment activities in the United States are more than $20,000 during the calendar year. 2011 1040 Income of German entertainers or athletes is exempt from U. 2011 1040 S. 2011 1040 tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. 2011 1040 Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. 2011 1040 S. 2011 1040 income tax if they are in the United States for no more than 183 days during the tax year and the pay is not more than $10,000. 2011 1040 The pay, regardless of amount, is exempt from U. 2011 1040 S. 2011 1040 income tax if it is for labor or personal services performed as employees of, or under contract with, a resident of Greece or a Greek corporation or other entity of Greece, and if the residents are in the United States for no more than 183 days during the tax year. 2011 1040 Hungary Income that residents of Hungary receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 tax if the residents: Are in the United States for no more than 183 days during the tax year, and Do not have a fixed base regularly available in the United States. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Hungary receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are in the United States for no more than 183 days during the tax year. 2011 1040 Their income is paid by or on behalf of an employer who is not a resident of the United States. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 Pay received by an employee who is a member of the regular complement of a ship or aircraft operated by a Hungarian enterprise in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 If the ship or aircraft is operated by a U. 2011 1040 S. 2011 1040 enterprise, the pay is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Iceland Income that residents of Iceland receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. 2011 1040 Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 The exemption does not apply to directors' fees and similar payments received by a resident of Iceland as a member of the board of directors of a U. 2011 1040 S. 2011 1040 company. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Iceland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Income received by a resident of Iceland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 India Income that residents of India receive for performing personal services in the United States during the tax year as independent contractors or self-employed individuals (independent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are present in the United States for no more than 89 days during the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 1040 Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are present in the United States for no more than 183 days during the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. 2011 1040 The exemption does not apply to pay received by a resident of India for services performed as an employee aboard a ship or aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 enterprise. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by an Indian resident as a member of the board of directors of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 These exemptions do not apply to income residents of India receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their net income is more than $1,500 during the tax year for their entertainment activities in the United States. 2011 1040 Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. 2011 1040 S. 2011 1040 tax if their visit to the United States is wholly or substantially supported from the public funds of the Indian Government, its political subdivisions, or local authorities. 2011 1040 Indonesia Income that residents of Indonesia receive for performing personal services as individual contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are present in the United States for no more than 119 days during any consecutive 12-month period, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 1040 Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are present in the United States no more than 119 days during any consecutive 12-month period. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne or reimbursed by a permanent establishment the employer has in the United States. 2011 1040 Pay received by an individual for services performed as an employee aboard a ship or aircraft operated by an Indonesian resident in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax if the individual is a member of the regular complement of the ship or aircraft. 2011 1040 These exemptions do not apply to income residents of Indonesia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if their gross receipts, including reimbursed expenses, are more than $2,000 during any consecutive 12-month period. 2011 1040 Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. 2011 1040 S. 2011 1040 tax if their visit to the United States is substantially supported or sponsored by the Indonesian Government and the Indonesian competent authority certifies that the entertainers or athletes qualify for this exemption. 2011 1040 Ireland Income that residents of Ireland receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Ireland as a member of the board of directors of a company that is a resident of the United States. 2011 1040 However, amounts received for attending meetings in Ireland are not subject to U. 2011 1040 S. 2011 1040 income tax. 2011 1040 Income received by a resident of Ireland for services performed as an employee and member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax. 2011 1040 These exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television entertainers, musicians, and athletes) from Ireland who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Israel Income that residents of Israel receive for performing personal services as independent contractors or as self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if they are in the United States for no more than 182 days during the tax year. 2011 1040 Income that residents of Israel receive for labor or personal services performed in the United States as employees (dependent personal services), including income for services performed by an officer of a corporation or company, is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet four requirements. 2011 1040 They are in the United States for no more than 182 days during the tax year. 2011 1040 They are employees of a resident of, or a permanent establishment in, Israel. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 Their income is subject to Israeli tax. 2011 1040 The exemption does not apply to pay received by an employee for labor or personal services performed as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 resident. 2011 1040 These exemptions do not apply to income that residents of Israel receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes), if the gross amount of the income is more than $400 for each day they are in the United States performing the services. 2011 1040 Italy Income that residents of Italy receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Italy receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following requirements are met. 2011 1040 The residents are in the United States for no more than 183 days during the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Italy for services performed in the United States as a member of the board of directors of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. 2011 1040 S. 2011 1040 enterprise is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to income residents of Italy receive as public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) if they are present in the United States for more than 90 days during the tax year or their gross receipts, including reimbursed expenses, are more than $20,000 during the tax year for their entertainment activities in the United States. 2011 1040 Jamaica Income that residents of Jamaica receive for the performance of personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 89 days during the tax year, Do not have a fixed base regularly available to them in the United States for performing their services, and Earn net income for those services that is not more than $5,000 during the tax year if the income is from a U. 2011 1040 S. 2011 1040 contractor. 2011 1040 If they have a fixed base available in the United States, they are taxed only on the income that is attributable to the fixed base. 2011 1040 There is no dollar limit for condition (3) if the contractor is from a country other than the United States. 2011 1040 Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet four requirements. 2011 1040 They are in the United States for no more than 183 days during the tax year. 2011 1040 Their income is paid by or for an employer who is not a resident of the United States. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 Their net income received for the services is not more than $5,000 during the tax year. 2011 1040 Pay received from employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a Jamaican enterprise is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 If the ship or aircraft is operated by a U. 2011 1040 S. 2011 1040 enterprise, the pay is subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to income that residents of Jamaica receive for performing services in the United States as entertainers, such as theater, motion picture, radio, or television artists, musicians, or athletes, if the gross receipts (excluding reimbursements for expenses) from the services are more than $400 a day or $5,000 for the tax year. 2011 1040 Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. 2011 1040 S. 2011 1040 corporations are exempt from U. 2011 1040 S. 2011 1040 tax if the fees (excluding reimbursed expenses) are not more than $400 per day for each day the directors are present in the United States to perform the services. 2011 1040 Japan Income that residents of Japan receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (business profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 1040 Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 The exemption does not apply to directors' fees and similar payments received by a resident of Japan for services performed as a member of the board of directors of a company that is a resident of the United States. 2011 1040 The exemption does not apply to a resident of Japan who performs services as an employee aboard a ship or an aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Japan who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Kazakhstan Income that residents of Kazakhstan receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if: The residents are in the United States for no more than 183 days in any consecutive 12-month period, and The income is not attributable to a fixed base in the United States which is regularly available to the residents. 2011 1040 If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 1040 Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following three requirements are met. 2011 1040 The resident is in the United States for no more than 183 days in any 12-month period. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 Income derived by a resident of Kazakhstan from employment as a member of the regular complement of a ship or aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 tax. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Kazakhstan as a member of the board of directors or similar body of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Korea, South Income that residents of South Korea receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 tax if the residents: Are in the United States for no more than 182 days during the tax year, Earn income for those services that is not more than $3,000 during the tax year, and Do not maintain a fixed base in the United States for more than 182 days during the tax year. 2011 1040 If they maintain a fixed base in the United States for more than 182 days, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Korea receive for labor or personal services performed in the United States as employees (dependent personal services), including pay for services performed as an officer of a corporation, is exempt from U. 2011 1040 S. 2011 1040 tax if the residents meet four requirements. 2011 1040 They are in the United States for no more than 182 days during the tax year. 2011 1040 They are employees of a resident of Korea or of a permanent establishment maintained in Korea. 2011 1040 Their compensation is not borne by a permanent establishment that the employer has in the United States. 2011 1040 Their income for those services is not more than $3,000. 2011 1040 Pay received by employees who are members of the regular complement of a ship or aircraft operated by a resident of Korea in international traffic is exempt. 2011 1040 Latvia Income that residents of Latvia receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 1040 Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following requirements are met. 2011 1040 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 enterprise. 2011 1040 The exemptions do not apply to directors' fees and similar payments received by a resident of Latvia as a member of the board of directors or similar body of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The exemptions do not apply to income residents of Latvia receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 1040 Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. 2011 1040 S. 2011 1040 income tax if their visit to the United States is wholly or mainly supported by public funds of Latvia, its political subdivisions, or local authorities. 2011 1040 Lithuania Income that residents of Lithuania receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year, and Do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on the income attributable to the fixed base. 2011 1040 Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following requirements are met. 2011 1040 The resident is in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 The exemption does not apply to pay received for employment as a member of the regular complement of a ship or an aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 enterprise. 2011 1040 The exemptions do not apply to directors' fees and similar payments received by a resident of Lithuania as a member of the board of directors or similar body of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The exemptions do not apply to income residents of Lithuania receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or sportsmen if their gross receipts, including reimbursed expenses, are more than $20,000 for their personal activities in the United States during the tax year. 2011 1040 Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. 2011 1040 S. 2011 1040 income tax if their visit to the United States is wholly or mainly supported by public funds of Lithuania, its political subdivisions, or local authorities. 2011 1040 Luxembourg Income that residents of Luxembourg receive for personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if they do not have a fixed base regularly available to them in the United States for performing the services. 2011 1040 If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. 2011 1040 Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. 2011 1040 The exemption does not apply to pay received for employment exercised continuously or predominantly aboard a ship or aircraft operated in international traffic by a U. 2011 1040 S. 2011 1040 enterprise. 2011 1040 The exemptions do not apply to directors' fees and similar payments received by a resident of Luxembourg for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 1040 The exemptions do not apply to public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Luxembourg who earn more than $10,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year. 2011 1040 Malta Income that residents of Malta receive for personal services as independent contractors or self-employed individuals is subject to the provisions of Article 7 (Business Profits) of the treaty. 2011 1040 Under that provision, business profits are exempt from U. 2011 1040 S. 2011 1040 income tax unless the individual has a permanent establishment in the United States. 2011 1040 If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. 2011 1040 Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet the following requirements. 2011 1040 They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. 2011 1040 Their income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 The exemption does not apply to directors' fees and similar payments received by a resident of Malta for services performed in the United States as a member of the board of directors of a company that is a resident of the United States. 2011 1040 Public entertainers (such as theater, motion picture, radio, or television artists, musicians, or athletes) from Malta who earn more than $20,000 in gross receipts, including reimbursed expenses, from their entertainment activities in the United States during the tax year are subject to U. 2011 1040 S. 2011 1040 tax. 2011 1040 Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. 2011 1040 S. 2011 1040 income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 1040 Mexico Income that residents of Mexico receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 182 days in a 12-month period, and Do not have a fixed base that they regularly use for performing the services. 2011 1040 If they have a fixed base available, they are taxed only on income attributable to the fixed base. 2011 1040 Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 tax if the following three requirements are met. 2011 1040 The resident is present in the United States for no more than 183 days in a 12-month period. 2011 1040 The income is paid by, or on behalf of, an employer who is not a resident of the United States. 2011 1040 The income is not borne by a permanent establishment or fixed base that the employer has in the United States. 2011 1040 These exemptions do not apply to directors' fees and similar payments received by a resident of Mexico for services performed outside Mexico as a director or overseer of a company that is a U. 2011 1040 S. 2011 1040 resident. 2011 1040 These exemptions do not apply to income residents of Mexico receive as public entertainers (such as theater, motion picture, radio, or television artists, or musicians) or athletes if the income, including reimbursed expenses, is more than $3,000 during the tax year for their entertainment activities in the United States. 2011 1040 This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. 2011 1040 Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. 2011 1040 S. 2011 1040 tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. 2011 1040 Morocco Income that residents of Morocco receive for performing personal services as independent contractors or as self-employed persons (independent personal services) in the United States during the tax year is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents: Are in the United States for no more than 182 days during the tax year, Do not maintain a fixed base in the United States for more than 89 days during the tax year, and Earn total income for those services that is not more than $5,000. 2011 1040 If they have a fixed base in the United States for more than 89 days, they are taxed only on the income attributable to the fixed base. 2011 1040 Income that residents of Morocco receive for labor or personal services performed in the United States as employees (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the residents meet three requirements. 2011 1040 They are in the United States for less than 183 days during the tax year. 2011 1040 They are employees of a resident of Morocco or of a permanent establishment of a resident of a country other than Morocco if the permanent establishment is located in Morocco. 2011 1040 Their income is not borne by a permanent establishment that the employer has in the United States. 2011 1040 Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. 2011 1040 Income received by an individual for performing labor or personal services as an employee aboard a ship or an aircraft operated in international traffic by a Moroccan resident is exempt from U. 2011 1040 S. 2011 1040 income tax if the individual is a member of the regular complement of the ship or aircraft. 2011 1040 These exemptions do not apply to income received for services performed in the United States by professional entertainers, including theater, film, radio, and television performers, musicians, and athletes, unless the services are performed by, or for the account of, a Moroccan nonprofit organization. 2011 1040 Netherlands Income that residents of the Netherlands receive for performing personal services as independent contractors or self-employed individuals (independent personal services) in the United States is exempt from U. 2011 1040 S. 2011 1040 income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. 2011 1040 Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. 2011 1040 S. 2011 1040 income tax if the following three requirements are met. 2011 1040 The resident is in the United States for no more than 183 days during the tax year. 2011 1040 The income is paid by, or on behalf of, an employer who is not a U. 2011 1040 S. 2011 1040 resident. 2011 1040 The income is not borne by a permanent establishment or fixed base the employer has in the United States. 2011 1040 Income received by a Netherlands resident for employment as a member of the regular complement of a ship or
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The 2011 1040

2011 1040 4. 2011 1040   Student Loan Interest Deduction Table of Contents Introduction Student Loan Interest DefinedQualified Student Loan Qualified Education Expenses Include As Interest Do Not Include As Interest When Must Interest Be Paid Can You Claim the DeductionNo Double Benefit Allowed Figuring the DeductionEffect of the Amount of Your Income on the Amount of Your Deduction Which Worksheet To Use Claiming the Deduction Introduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. 2011 1040 However, if your modified adjusted gross income (MAGI) is less than $75,000 ($155,000 if filing a joint return) there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher education. 2011 1040 For most taxpayers, MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. 2011 1040 This deduction can reduce the amount of your income subject to tax by up to $2,500 in 2013. 2011 1040 The student loan interest deduction is taken as an adjustment to income. 2011 1040 This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). 2011 1040 This chapter explains: What type of loan interest you can deduct, Whether you can claim the deduction, What expenses you must have paid with the student loan, Who is an eligible student, How to figure the deduction, and How to claim the deduction. 2011 1040 Table 4-1. 2011 1040 Student Loan Interest Deduction at a Glance This table summarizes the features of the student loan interest deduction. 2011 1040 Do not rely on this table alone. 2011 1040 Refer to the text for complete details. 2011 1040 Feature   Description Maximum benefit   You can reduce your income subject to tax by up to $2,500. 2011 1040 Loan qualifications   Your student loan: •must have been taken out solely to pay qualified education expenses, and •cannot be from a related person or made under a qualified employer plan. 2011 1040 Student qualifications   The student must be: •you, your spouse, or your dependent, and  •enrolled at least half-time in a degree program. 2011 1040 Time limit on deduction   You can deduct interest paid during the remaining period of your student loan. 2011 1040 Limit on modified adjusted gross income (MAGI)   $155,000 if married filing a joint return; $75,000 if single, head of household, or qualifying widow(er). 2011 1040 Student Loan Interest Defined Student loan interest is interest you paid during the year on a qualified student loan. 2011 1040 It includes both required and voluntary interest payments. 2011 1040 Qualified Student Loan This is a loan you took out solely to pay qualified education expenses (defined later) that were: For you, your spouse, or a person who was your dependent when you took out the loan, Paid or incurred within a reasonable period of time before or after you took out the loan, and For education provided during an academic period for an eligible student. 2011 1040 Loans from the following sources are not qualified student loans. 2011 1040 A related person. 2011 1040 A qualified employer plan. 2011 1040 Your dependent. 2011 1040   Generally, your dependent is someone who is either a: Qualifying child, or Qualifying relative. 2011 1040 You can find more information about dependents in Publication 501. 2011 1040 Exceptions. 2011 1040   For purposes of the student loan interest deduction, there are the following exceptions to the general rules for dependents. 2011 1040 An individual can be your dependent even if you are the dependent of another taxpayer. 2011 1040 An individual can be your dependent even if the individual files a joint return with a spouse. 2011 1040 An individual can be your dependent even if the individual had gross income for the year that was equal to or more than the exemption amount for the year ($3,900 for 2013). 2011 1040 Reasonable period of time. 2011 1040   Qualified education expenses are treated as paid or incurred within a reasonable period of time before or after you take out the loan if they are paid with the proceeds of student loans that are part of a federal postsecondary education loan program. 2011 1040   Even if not paid with the proceeds of that type of loan, the expenses are treated as paid or incurred within a reasonable period of time if both of the following requirements are met. 2011 1040 The expenses relate to a specific academic period, and The loan proceeds are disbursed within a period that begins 90 days before the start of that academic period and ends 90 days after the end of that academic period. 2011 1040   If neither of the above situations applies, the reasonable period of time usually is determined based on all the relevant facts and circumstances. 2011 1040 Academic period. 2011 1040   An academic period includes a semester, trimester, quarter, or other period of study (such as a summer school session) as reasonably determined by an educational institution. 2011 1040 In the case of an educational institution that uses credit hours or clock hours and does not have academic terms, each payment period can be treated as an academic period. 2011 1040 Eligible student. 2011 1040   This is a student who was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential. 2011 1040 Enrolled at least half-time. 2011 1040   A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study. 2011 1040   The standard for what is half of the normal full-time work load is determined by each eligible educational institution. 2011 1040 However, the standard may not be lower than any of those established by the U. 2011 1040 S. 2011 1040 Department of Education under the Higher Education Act of 1965. 2011 1040 Related person. 2011 1040   You cannot deduct interest on a loan you get from a related person. 2011 1040 Related persons include: Your spouse, Your brothers and sisters, Your half brothers and half sisters, Your ancestors (parents, grandparents, etc. 2011 1040 ), Your lineal descendants (children, grandchildren, etc. 2011 1040 ), and Certain corporations, partnerships, trusts, and exempt organizations. 2011 1040 Qualified employer plan. 2011 1040   You cannot deduct interest on a loan made under a qualified employer plan or under a contract purchased under such a plan. 2011 1040 Qualified Education Expenses For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school. 2011 1040 They include amounts paid for the following items. 2011 1040 Tuition and fees. 2011 1040 Room and board. 2011 1040 Books, supplies, and equipment. 2011 1040 Other necessary expenses (such as transportation). 2011 1040 The cost of room and board qualifies only to the extent that it is not more than the greater of: The allowance for room and board, as determined by the eligible educational institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student, or The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution. 2011 1040 Eligible educational institution. 2011 1040   An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U. 2011 1040 S. 2011 1040 Department of Education. 2011 1040 It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. 2011 1040   Certain educational institutions located outside the United States also participate in the U. 2011 1040 S. 2011 1040 Department of Education's Federal Student Aid (FSA) programs. 2011 1040   For purposes of the student loan interest deduction, an eligible educational institution also includes an institution conducting an internship or residency program leading to a degree or certificate from an institution of higher education, a hospital, or a health care facility that offers postgraduate training. 2011 1040   An educational institution must meet the above criteria only during the academic period(s) for which the student loan was incurred. 2011 1040 The deductibility of interest on the loan is not affected by the institution's subsequent loss of eligibility. 2011 1040    The educational institution should be able to tell you if it is an eligible educational institution. 2011 1040 Adjustments to Qualified Education Expenses You must reduce your qualified education expenses by the total amount paid for them with the following tax-free items. 2011 1040 Employer-provided educational assistance. 2011 1040 See chapter 11, Employer-Provided Educational Assistance . 2011 1040 Tax-free distribution of earnings from a Coverdell education savings account (ESA). 2011 1040 See Tax-Free Distributions in chapter 7, Coverdell Education Savings Account. 2011 1040 Tax-free distribution of earnings from a qualified tuition program (QTP). 2011 1040 See Figuring the Taxable Portion of a Distribution in chapter 8, Qualified Tuition Program. 2011 1040 U. 2011 1040 S. 2011 1040 savings bond interest that you exclude from income because it is used to pay qualified education expenses. 2011 1040 See chapter 10, Education Savings Bond Program . 2011 1040 The tax-free part of scholarships and fellowships. 2011 1040 See Tax-Free Scholarships and Fellowships in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2011 1040 Veterans' educational assistance. 2011 1040 See Veterans' Benefits in chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions. 2011 1040 Any other nontaxable (tax-free) payments (other than gifts or inheritances) received as educational assistance. 2011 1040 Include As Interest In addition to simple interest on the loan, if all other requirements are met, the items discussed below can be student loan interest. 2011 1040 Loan origination fee. 2011 1040   In general, this is a one-time fee charged by the lender when a loan is made. 2011 1040 To be deductible as interest, a loan origination fee must be for the use of money rather than for property or services (such as commitment fees or processing costs) provided by the lender. 2011 1040 A loan origination fee treated as interest accrues over the term of the loan. 2011 1040   Loan origination fees were not required to be reported on Form 1098-E, Student Loan Interest Statement, for loans made before September 1, 2004. 2011 1040 If loan origination fees are not included in the amount reported on your Form 1098-E, you can use any reasonable method to allocate the loan origination fees over the term of the loan. 2011 1040 The method shown in the example below allocates equal portions of the loan origination fee to each payment required under the terms of the loan. 2011 1040 A method that results in the double deduction of the same portion of a loan origination fee would not be reasonable. 2011 1040 Example. 2011 1040 In August 2004, Bill took out a student loan for $16,000 to pay the tuition for his senior year of college. 2011 1040 The lender charged a 3% loan origination fee ($480) that was withheld from the funds Bill received. 2011 1040 Bill began making payments on his student loan in 2013. 2011 1040 Because the loan origination fee was not included in his 2013 Form 1098-E, Bill can use any reasonable method to allocate that fee over the term of the loan. 2011 1040 Bill's loan is payable in 120 equal monthly payments. 2011 1040 He allocates the $480 fee equally over the total number of payments ($480 ÷ 120 months = $4 per month). 2011 1040 Bill made 7 payments in 2013, so he paid $28 ($4 × 7) of interest attributable to the loan origination fee. 2011 1040 To determine his student loan interest deduction, he will add the $28 to the amount of other interest reported to him on Form 1098-E. 2011 1040 Capitalized interest. 2011 1040   This is unpaid interest on a student loan that is added by the lender to the outstanding principal balance of the loan. 2011 1040 Capitalized interest is treated as interest for tax purposes and is deductible as payments of principal are made on the loan. 2011 1040 No deduction for capitalized interest is allowed in a year in which no loan payments were made. 2011 1040 Interest on revolving lines of credit. 2011 1040   This interest, which includes interest on credit card debt, is student loan interest if the borrower uses the line of credit (credit card) only to pay qualified education expenses. 2011 1040 See Qualified Education Expenses , earlier. 2011 1040 Interest on refinanced student loans. 2011 1040   This includes interest on both: Consolidated loans—loans used to refinance more than one student loan of the same borrower, and Collapsed loans—two or more loans of the same borrower that are treated by both the lender and the borrower as one loan. 2011 1040    If you refinance a qualified student loan for more than your original loan and you use the additional amount for any purpose other than qualified education expenses, you cannot deduct any interest paid on the refinanced loan. 2011 1040 Voluntary interest payments. 2011 1040   These are payments made on a qualified student loan during a period when interest payments are not required, such as when the borrower has been granted a deferment or the loan has not yet entered repayment status. 2011 1040 Example. 2011 1040 The payments on Roger's student loan were scheduled to begin in June 2012, 6 months after he graduated from college. 2011 1040 He began making payments as required. 2011 1040 In September 2013, Roger enrolled in graduate school on a full-time basis. 2011 1040 He applied for and was granted deferment of his loan payments while in graduate school. 2011 1040 Wanting to pay down his student loan as much as possible, he made loan payments in October and November 2013. 2011 1040 Even though these were voluntary (not required) payments, Roger can deduct the interest paid in October and November. 2011 1040 Allocating Payments Between Interest and Principal The allocation of payments between interest and principal for tax purposes might not be the same as the allocation shown on the Form 1098-E or other statement you receive from the lender or loan servicer. 2011 1040 To make the allocation for tax purposes, a payment generally applies first to stated interest that remains unpaid as of the date the payment is due, second to any loan origination fees allocable to the payment, third to any capitalized interest that remains unpaid as of the date the payment is due, and fourth to the outstanding principal. 2011 1040 Example. 2011 1040 In August 2012, Peg took out a $10,000 student loan to pay the tuition for her senior year of college. 2011 1040 The lender charged a 3% loan origination fee ($300) that was withheld from the funds Peg received. 2011 1040 The interest (5% simple) on this loan accrued while she completed her senior year and for 6 months after she graduated. 2011 1040 At the end of that period, the lender determined the amount to be repaid by capitalizing all accrued but unpaid interest ($625 interest accrued from August 2012 through October 2013) and adding it to the outstanding principal balance of the loan. 2011 1040 The loan is payable over 60 months, with a payment of $200. 2011 1040 51 due on the first of each month, beginning November 2013. 2011 1040 Peg did not receive a Form 1098-E for 2013 from her lender because the amount of interest she paid did not require the lender to issue an information return. 2011 1040 However, she did receive an account statement from the lender that showed the following 2013 payments on her outstanding loan of $10,625 ($10,000 principal + $625 accrued but unpaid interest). 2011 1040 Payment Date   Payment   Stated Interest   Principal November 2013   $200. 2011 1040 51   $44. 2011 1040 27   $156. 2011 1040 24 December 2013   $200. 2011 1040 51   $43. 2011 1040 62   $156. 2011 1040 89 Totals   $401. 2011 1040 02   $87. 2011 1040 89   $313. 2011 1040 13 To determine the amount of interest that could be deducted on the loan for 2013, Peg starts with the total amount of stated interest she paid, $87. 2011 1040 89. 2011 1040 Next, she allocates the loan origination fee over the term of the loan ($300 ÷ 60 months = $5 per month). 2011 1040 A total of $10 ($5 of each of the two principal payments) should be treated as interest for tax purposes. 2011 1040 Peg then applies the unpaid capitalized interest ($625) to the two principal payments in the order in which they were made, and determines that the remaining amount of principal of both payments is treated as interest for tax purposes. 2011 1040 Assuming that Peg qualifies to take the student loan interest deduction, she can deduct $401. 2011 1040 02 ($87. 2011 1040 89 + $10 + $303. 2011 1040 13). 2011 1040 For 2014, Peg will continue to allocate $5 of the loan origination fee to the principal portion of each monthly payment she makes and treat that amount as interest for tax purposes. 2011 1040 She also will apply the remaining amount of capitalized interest ($625 − $303. 2011 1040 13 = $321. 2011 1040 87) to the principal payments in the order in which they are made until the balance is zero, and treat those amounts as interest for tax purposes. 2011 1040 Do Not Include As Interest You cannot claim a student loan interest deduction for any of the following items. 2011 1040 Interest you paid on a loan if, under the terms of the loan, you are not legally obligated to make interest payments. 2011 1040 Loan origination fees that are payments for property or services provided by the lender, such as commitment fees or processing costs. 2011 1040 Interest you paid on a loan to the extent payments were made through your participation in the National Health Service Corps Loan Repayment Program (the “NHSC Loan Repayment Program”) or certain other loan repayment assistance programs. 2011 1040 For more information, see Student Loan Repayment Assistance in chapter 5, Student Loan Cancellations and Repayment Assistance. 2011 1040 When Must Interest Be Paid You can deduct all interest you paid during the year on your student loan, including voluntary payments, until the loan is paid off. 2011 1040 Can You Claim the Deduction Generally, you can claim the deduction if all of the following requirements are met. 2011 1040 Your filing status is any filing status except married filing separately. 2011 1040 No one else is claiming an exemption for you on his or her tax return. 2011 1040 You are legally obligated to pay interest on a qualified student loan. 2011 1040 You paid interest on a qualified student loan. 2011 1040 Claiming an exemption for you. 2011 1040   Another taxpayer is claiming an exemption for you if he or she lists your name and other required information on his or her Form 1040 (or Form 1040A), line 6c, or Form 1040NR, line 7c. 2011 1040 Example 1. 2011 1040 During 2013, Josh paid $600 interest on his qualified student loan. 2011 1040 Only he is legally obligated to make the payments. 2011 1040 No one claimed an exemption for Josh for 2013. 2011 1040 Assuming all other requirements are met, Josh can deduct the $600 of interest he paid on his 2013 Form 1040 or 1040A. 2011 1040 Example 2. 2011 1040 During 2013, Jo paid $1,100 interest on her qualified student loan. 2011 1040 Only she is legally obligated to make the payments. 2011 1040 Jo's parents claimed an exemption for her on their 2013 tax return. 2011 1040 In this case, neither Jo nor her parents may deduct the student loan interest Jo paid in 2013. 2011 1040 Interest paid by others. 2011 1040   If you are the person legally obligated to make interest payments and someone else makes a payment of interest on your behalf, you are treated as receiving the payments from the other person and, in turn, paying the interest. 2011 1040 Example 1. 2011 1040 Darla obtained a qualified student loan to attend college. 2011 1040 After Darla's graduation from college, she worked as an intern for a nonprofit organization. 2011 1040 As part of the internship program, the nonprofit organization made an interest payment on behalf of Darla. 2011 1040 This payment was treated as additional compensation and reported in box 1 of her Form W-2. 2011 1040 Assuming all other qualifications are met, Darla can deduct this payment of interest on her tax return. 2011 1040 Example 2. 2011 1040 Ethan obtained a qualified student loan to attend college. 2011 1040 After graduating from college, the first monthly payment on his loan was due in December. 2011 1040 As a gift, Ethan's mother made this payment for him. 2011 1040 No one is claiming a dependency exemption for Ethan on his or her tax return. 2011 1040 Assuming all other qualifications are met, Ethan can deduct this payment of interest on his tax return. 2011 1040 No Double Benefit Allowed You cannot deduct as interest on a student loan any amount that is an allowable deduction under any other provision of the tax law (for example, as home mortgage interest). 2011 1040 Figuring the Deduction Your student loan interest deduction for 2013 is generally the smaller of: $2,500, or The interest you paid in 2013. 2011 1040 However, the amount determined above may be gradually reduced (phased out) or eliminated based on your filing status and MAGI as explained below. 2011 1040 You can use Worksheet 4-1. 2011 1040 Student Loan Interest Deduction Worksheet (at the end of this chapter) to figure both your MAGI and your deduction. 2011 1040 Form 1098-E. 2011 1040   To help you figure your student loan interest deduction, you should receive Form 1098-E. 2011 1040 Generally, an institution (such as a bank or governmental agency) that received interest payments of $600 or more during 2013 on one or more qualified student loans must send Form 1098-E (or acceptable substitute) to each borrower by January 31, 2014. 2011 1040   For qualified student loans taken out before September 1, 2004, the institution is required to include on Form 1098-E only payments of stated interest. 2011 1040 Other interest payments, such as certain loan origination fees and capitalized interest, may not appear on the form you receive. 2011 1040 However, if you pay qualifying interest that is not included on Form 1098-E, you can also deduct those amounts. 2011 1040 See Allocating Payments Between Interest and Principal , earlier. 2011 1040    The lender may ask for a completed Form W-9S, or similar statement to obtain the borrower's name, address, and taxpayer identification number. 2011 1040 The form may also be used by the borrower to certify that the student loan was incurred solely to pay for qualified education expenses. 2011 1040 Effect of the Amount of Your Income on the Amount of Your Deduction The amount of your student loan interest deduction is phased out (gradually reduced) if your MAGI is between $60,000 and $75,000 ($125,000 and $155,000 if you file a joint return). 2011 1040 You cannot take a student loan interest deduction if your MAGI is $75,000 or more ($155,000 or more if you file a joint return). 2011 1040 Modified adjusted gross income (MAGI). 2011 1040   For most taxpayers, MAGI is adjusted gross income (AGI) as figured on their federal income tax return before subtracting any deduction for student loan interest. 2011 1040 However, as discussed below, there may be other modifications. 2011 1040 Table 4-2 shows how the amount of your MAGI can affect your student loan interest deduction. 2011 1040 Table 4-2. 2011 1040 Effect of MAGI on Student Loan Interest Deduction IF your filing status is. 2011 1040 . 2011 1040 . 2011 1040 AND your MAGI is. 2011 1040 . 2011 1040 . 2011 1040 THEN your student loan interest deduction is. 2011 1040 . 2011 1040 . 2011 1040 single,  head of household, or qualifying widow(er) not more than $60,000 not affected by the phaseout. 2011 1040 more than $60,000  but less than $75,000 reduced because of the phaseout. 2011 1040 $75,000 or more eliminated by the phaseout. 2011 1040 married filing joint return not more than $125,000 not affected by the phaseout. 2011 1040 more than $125,000 but less than $155,000 reduced because of the phaseout. 2011 1040 $155,000 or more eliminated by the phaseout. 2011 1040 MAGI when using Form 1040A. 2011 1040   If you file Form 1040A, your MAGI is the AGI on line 22 of that form figured without taking into account any amount on line 18 (student loan interest deduction) and line 19 (tuition and fees deduction). 2011 1040 MAGI when using Form 1040. 2011 1040   If you file Form 1040, your MAGI is the AGI on line 38 of that form figured without taking into account any amount on line 33 (student loan interest deduction), line 34 (tuition and fees deduction), or line 35 (domestic production activities deduction), and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion, Foreign housing deduction, Exclusion of income by bona fide residents of American Samoa, and Exclusion of income by bona fide residents of Puerto Rico. 2011 1040 MAGI when using Form 1040NR. 2011 1040   If you file Form 1040NR, your MAGI is the AGI on line 36 of that form figured without taking into account any amount on line 33 (student loan interest deduction) and line 34 (domestic production activities deduction). 2011 1040 MAGI when using Form 1040NR-EZ. 2011 1040   If you file Form 1040NR-EZ, your MAGI is the AGI on line 10 of that form figured without taking into account any amount on line 9 (student loan interest deduction). 2011 1040 Phaseout. 2011 1040   If your MAGI is within the range of incomes where the credit must be reduced, you must figure your reduced deduction. 2011 1040 To figure the phaseout, multiply your interest deduction (before the phaseout) by a fraction. 2011 1040 The numerator is your MAGI minus $60,000 ($125,000 in the case of a joint return). 2011 1040 The denominator is $15,000 ($30,000 in the case of a joint return). 2011 1040 Subtract the result from your deduction (before the phaseout) to give you the amount you can deduct. 2011 1040 Example 1. 2011 1040 During 2013 you paid $800 interest on a qualified student loan. 2011 1040 Your 2013 MAGI is $145,000 and you are filing a joint return. 2011 1040 You must reduce your deduction by $533, figured as follows. 2011 1040   $800 × $145,000 − $125,000  $30,000 = $533   Your reduced student loan interest deduction is $267 ($800 − $533). 2011 1040 Example 2. 2011 1040 The facts are the same as in Example 1 except that you paid $2,750 interest. 2011 1040 Your maximum deduction for 2013 is $2,500. 2011 1040 You must reduce your maximum deduction by $1,667, figured as follows. 2011 1040   $2,500 × $145,000 − $125,000  $30,000 = $1,667   In this example, your reduced student loan interest deduction is $833 ($2,500 − $1,667). 2011 1040 Which Worksheet To Use Generally, you figure the deduction using the Student Loan Interest Deduction Worksheet in the instructions for Form 1040, Form 1040A, or Form 1040NR. 2011 1040 However, if you are filing Form 2555, Foreign Earned Income, Form 2555-EZ, Foreign Earned Income Exclusion, or Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa, or you are excluding income from sources within Puerto Rico, you must complete Worksheet 4-1. 2011 1040 Student Loan Interest Deduction Worksheet at the end of this chapter. 2011 1040 Claiming the Deduction The student loan interest deduction is an adjustment to income. 2011 1040 To claim the deduction, enter the allowable amount on line 33 (Form 1040), line 18 (Form 1040A), line 33 (Form 1040NR), or line 9 (Form 1040NR-EZ). 2011 1040 Worksheet 4-1. 2011 1040 Student Loan Interest Deduction Worksheet Use this worksheet instead of the worksheet in the Form 1040 instructions if you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from sources within Puerto Rico. 2011 1040 Before using this worksheet, you must complete Form 1040, lines 7 through 32, plus any amount to be entered on the dotted line next to line 36. 2011 1040 1. 2011 1040 Enter the total interest you paid in 2013 on qualified student loans. 2011 1040 Do not enter  more than $2,500 1. 2011 1040   2. 2011 1040 Enter the amount from Form 1040, line 22 2. 2011 1040       3. 2011 1040 Enter the total of the amounts from Form 1040,  lines 23 through 32 3. 2011 1040           4. 2011 1040 Enter the total of any amounts entered on the dotted line next to Form 1040, line 36 4. 2011 1040           5. 2011 1040 Add lines 3 and 4 5. 2011 1040       6. 2011 1040 Subtract line 5 from line 2 6. 2011 1040       7. 2011 1040 Enter any foreign earned income exclusion and/or housing  exclusion (Form 2555, line 45, or Form 2555-EZ, line 18) 7. 2011 1040       8. 2011 1040 Enter any foreign housing deduction (Form 2555, line 50) 8. 2011 1040       9. 2011 1040 Enter the amount of income from Puerto Rico you are excluding 9. 2011 1040       10. 2011 1040 Enter the amount of income from American Samoa  you are excluding (Form 4563, line 15) 10. 2011 1040       11. 2011 1040 Add lines 6 through 10. 2011 1040 This is your modified adjusted gross income 11. 2011 1040   12. 2011 1040 Enter the amount shown below for your filing status 12. 2011 1040     •Single, head of household, or qualifying widow(er)—$60,000       •Married filing jointly—$125,000     13. 2011 1040 Is the amount on line 11 more than the amount on line 12?       □ No. 2011 1040 Skip lines 13 and 14, enter -0- on line 15, and go to line 16. 2011 1040       □ Yes. 2011 1040 Subtract line 12 from line 11 13. 2011 1040   14. 2011 1040 Divide line 13 by $15,000 ($30,000 if married filing jointly). 2011 1040 Enter the result as a decimal  (rounded to at least three places). 2011 1040 If the result is 1. 2011 1040 000 or more, enter 1. 2011 1040 000 14. 2011 1040 . 2011 1040 15. 2011 1040 Multiply line 1 by line 14 15. 2011 1040   16. 2011 1040 Student loan interest deduction. 2011 1040 Subtract line 15 from line 1. 2011 1040 Enter the result here  and on Form 1040, line 33. 2011 1040 Do not include this amount in figuring any other  deduction on your return (such as on Schedule A, C, E, etc. 2011 1040 ) 16. 2011 1040   Prev  Up  Next   Home   More Online Publications