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Efile State Tax

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Efile State Tax

Efile state tax 1. Efile state tax   Canceled Debts Table of Contents General RulesForm 1099-C Discounts and loan modifications Sales or other dispositions (such as foreclosures and repossessions) Abandonments Stockholder debt This chapter discusses the tax treatment of canceled debts. Efile state tax General Rules Generally, if a debt for which you are personally liable is forgiven or discharged for less than the full amount owed, the debt is considered canceled in whatever amount it remained unpaid. Efile state tax There are exceptions to this rule, discussed under Exceptions , later. Efile state tax Generally, you must include the canceled debt in your income. Efile state tax However, you may be able to exclude the canceled debt. Efile state tax See Exclusions , later. Efile state tax Example. Efile state tax John owed $1,000 to Mary. Efile state tax Mary agreed to accept and John paid $400 in satisfaction of the entire debt. Efile state tax John has canceled debt of $600. Efile state tax Example. Efile state tax Margaret owed $1,000 to Henry. Efile state tax Henry and Margaret agreed that Margaret would provide Henry with services (instead of money) in full satisfaction of the debt. Efile state tax Margaret does not have canceled debt. Efile state tax Instead, she has income from services. Efile state tax A debt includes any indebtedness: For which you are liable, or Subject to which you hold property. Efile state tax Debt for which you are personally liable is recourse debt. Efile state tax All other debt is nonrecourse debt. Efile state tax If you are not personally liable for the debt, you do not have ordinary income from the cancellation of debt unless you retain the collateral and either: The lender offers a discount for the early payment of the debt, or The lender agrees to a loan modification that results in the reduction of the principal balance of the debt. Efile state tax See Discounts and loan modifications , later. Efile state tax However, upon the disposition of the property securing a nonrecourse debt, the amount realized includes the entire unpaid amount of the debt, not just the FMV of the property. Efile state tax As a result, you may realize a gain or loss if the outstanding debt immediately before the disposition is more or less than your adjusted basis in the property. Efile state tax For more details on figuring your gain or loss, see chapter 2 of this publication or see Publication 544. Efile state tax There are several exceptions and exclusions that may result in part or all of a canceled debt being nontaxable. Efile state tax See Exceptions and Exclusions, later. Efile state tax You must report any taxable canceled debt as ordinary income on: Form 1040 or Form 1040NR, line 21, if the debt is a nonbusiness debt; Schedule C (Form 1040), line 6 (or Schedule C-EZ (Form 1040), line 1), if the debt is related to a nonfarm sole proprietorship; Schedule E (Form 1040), line 3, if the debt is related to nonfarm rental of real property; Form 4835, line 6, if the debt is related to a farm rental activity for which you use Form 4835 to report farm rental income based on crops or livestock produced by a tenant; or Schedule F (Form 1040), line 8, if the debt is farm debt and you are a farmer. Efile state tax Form 1099-C If you receive a Form 1099-C, that means an applicable entity has reported an identifiable event to the IRS regarding a debt you owe. Efile state tax The identifiable event may be an actual cancellation of the debt or it may be an event the applicable entity is required, solely for purposes of reporting to the IRS, to treat as a cancellation of debt. Efile state tax For information on the reasons an applicable entity files Form 1099-C, see Identifiable event codes, later. Efile state tax Unless you meet one of the exceptions or exclusions discussed later, this canceled debt is ordinary income and must be reported on the appropriate form discussed above. Efile state tax An applicable entity includes: A federal government agency, A financial institution, A credit union, and Any organization a significant trade or business of which is lending money. Efile state tax Identifiable event codes. Efile state tax    Box 6 of Form 1099-C should indicate the reason the creditor filed this form. Efile state tax The codes shown in box 6 are explained below. Efile state tax Also see the chart after the explanation for a quick reference guide for the codes used in Box 6. Efile state tax Note. Efile state tax Codes A through G and I identify specific occurrences resulting from an actual discharge of indebtedness. Efile state tax However, Code H, Expiration of nonpayment testing period, does not necessarily identify an actual discharge of indebtedness. Efile state tax Code A — Bankruptcy. Efile state tax Code A is used to identify cancellation of debt as a result of a title 11 bankruptcy case. Efile state tax See Bankruptcy , later. Efile state tax Code B — Other judicial debt relief. Efile state tax Code B is used to identify cancellation of debt as a result of a receivership, foreclosure, or similar federal or state court proceeding other than bankruptcy. Efile state tax Code C — Statute of limitations or expiration of deficiency period. Efile state tax Code C is used to identify cancellation of debt either when the statute of limitations for collecting the debt expires or when the statutory period for filing a claim or beginning a deficiency judgment proceeding expires. Efile state tax In the case of the expiration of a statute of limitations, an identifiable event occurs only if and when your affirmative defense of the statute of limitations is upheld in a final judgment or decision in a judicial proceeding, and the period for appealing the judgment or decision has expired. Efile state tax Code D — Foreclosure election. Efile state tax Code D is used to identify cancellation of debt when the creditor elects foreclosure remedies that statutorily end or bar the creditor's right to pursue collection of the debt. Efile state tax This event applies to a mortgage lender or holder who is barred from pursuing debt collection after a power of sale in the mortgage or deed of trust is exercised. Efile state tax Code E — Debt relief from probate or similar proceeding. Efile state tax Code E is used to identify cancellation of debt as a result of a probate court or similar legal proceeding. Efile state tax Code F — By agreement. Efile state tax Code F is used to identify cancellation of debt as a result of an agreement between the creditor and the debtor to cancel the debt at less than full consideration. Efile state tax Code G — Decision or policy to discontinue collection. Efile state tax Code G is used to identify cancellation of debt as a result of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. Efile state tax For purposes of this identifiable event, a defined policy includes both a written policy and the creditor's established business practice. Efile state tax Code H — Expiration of nonpayment testing period. Efile state tax Code H is used to indicate that the creditor has not received a payment on the debt during a testing period ending on December 31, 2013. Efile state tax The testing period is a 36-month period increased by the number of months the creditor was prevented from engaging in collection activity by a stay in bankruptcy or similar bar under state or local law. Efile state tax This identifiable event applies only for a creditor that is a financial institution or credit union (and certain of their subsidiaries), the Federal Deposit Insurance Corporation (FDIC), Resolution Trust Corporation (RTC), National Credit Union Administration (NCUA), and other Federal executive agencies. Efile state tax Expiration of the nonpayment testing period does not necessarily result from an actual discharge of indebtedness. Efile state tax Code I — Other actual discharge before identifiable event. Efile state tax Code I is used to identify an actual cancellation of debt that occurs before any of the identifiable events described in codes A through H. Efile state tax Form 1099-C Reference Guide for Box 6 Identifiable Event Codes A Bankruptcy B Other judicial debt relief C Statute of limitations or expiration of deficiency period D Foreclosure election E Debt relief from probate or similar proceeding F By agreement G Decision or policy to discontinue collection H Expiration of nonpayment testing period I Other actual discharge before identifiable event Even if you did not receive a Form 1099-C, you must report canceled debt as gross income on your tax return unless one of the exceptions or exclusions described later applies. Efile state tax Amount of canceled debt. Efile state tax    The amount in box 2 of Form 1099-C may represent some or all of the debt that has been canceled or treated as canceled. Efile state tax The amount in box 2 will include principal and may include interest and other nonprincipal amounts (such as fees or penalties). Efile state tax Unless you meet one of the exceptions or exclusions discussed later, the amount of the debt that has been canceled is ordinary income and must be reported on the appropriate form as discussed earlier. Efile state tax Interest included in canceled debt. Efile state tax    If any interest is included in the amount of canceled debt in box 2, it will be shown in box 3. Efile state tax Whether the interest portion of the canceled debt must be included in your income depends on whether the interest would be deductible if you paid it. Efile state tax See Deductible Debt under Exceptions, later. Efile state tax Persons who each receive a Form 1099-C showing the full amount of debt. Efile state tax    If you and another person were jointly and severally liable for a canceled debt, each of you may get a Form 1099-C showing the entire amount of the canceled debt. Efile state tax However, you may not have to report that entire amount as income. Efile state tax The amount, if any, you must report depends on all the facts and circumstances, including: State law, The amount of debt proceeds each person received, How much of any interest deduction from the debt was claimed by each person, How much of the basis of any co-owned property bought with the debt proceeds was allocated to each co-owner, and Whether the canceled debt qualifies for any of the exceptions or exclusions described in this publication. Efile state tax See Example 3 under Insolvency, later. Efile state tax Discounts and loan modifications If a lender discounts (reduces) the principal balance of a loan because you pay it off early, or agrees to a loan modification (a “workout”) that includes a reduction in the principal balance of a loan, the amount of the discount or the amount of principal reduction is canceled debt. Efile state tax However, if the debt is nonrecourse and you did not retain the collateral, you do not have cancellation of the debt income. Efile state tax The amount of the canceled debt must be included in income unless one of the exceptions or exclusions described later applies. Efile state tax For more details, see Exceptions and Exclusions, later. Efile state tax Sales or other dispositions (such as foreclosures and repossessions) Recourse debt. Efile state tax   If you owned property that was subject to a recourse debt in excess of the FMV of the property, the lender's foreclosure or repossession of the property is treated as a sale or disposition of the property by you and may result in your realization of gain or loss. Efile state tax The gain or loss on the disposition of the property is measured by the difference between the FMV of the property at the time of the disposition and your adjusted basis (usually your cost) in the property. Efile state tax The character of the gain or loss (such as ordinary or capital) is determined by the character of the property. Efile state tax If the lender forgives all or part of the amount of the debt in excess of the FMV of the property, the cancellation of the excess debt may result in ordinary income. Efile state tax The ordinary income from the cancellation of debt (the excess of the canceled debt over the FMV of the property) must be included in your gross income reported on your tax return unless one of the exceptions or exclusions described later applies. Efile state tax For more details, see Exceptions and Exclusions, later. Efile state tax Nonrecourse debt. Efile state tax   If you owned property that was subject to a nonrecourse debt in excess of the FMV of the property, the lender's foreclosure on the property does not result in ordinary income from the cancellation of debt. Efile state tax The entire amount of the nonrecourse debt is treated as an amount realized on the disposition of the property. Efile state tax The gain or loss on the disposition of the property is measured by the difference between the total amount realized (the entire amount of the nonrecourse debt plus the amount of cash and the FMV of any property received) and your adjusted basis in the property. Efile state tax The character of the gain or loss is determined by the character of the property. Efile state tax More information. Efile state tax    See Publications 523, 544, and 551, and chapter 2 of this publication for more details. Efile state tax Abandonments Recourse debt. Efile state tax   If you abandon property that secures a debt for which you are personally liable (recourse debt) and the debt is canceled, you will realize ordinary income equal to the canceled debt. Efile state tax You must report this income on your tax return unless one of the exceptions or exclusions described later applies. Efile state tax For more details, see Exceptions and Exclusions, later. Efile state tax This income is separate from any amount realized from the abandonment of the property. Efile state tax For more details, see chapter 3. Efile state tax Nonrecourse debt. Efile state tax   If you abandon property that secures a debt for which you are not personally liable (nonrecourse debt), you may realize gain or loss but will not have cancellation of indebtedness income. Efile state tax Stockholder debt If you are a stockholder in a corporation and the corporation cancels or forgives your debt to it, the canceled debt is a constructive distribution. Efile state tax For more information, see Publication 542, Corporations. Efile state tax Prev  Up  Next   Home   More Online Publications
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The Efile State Tax

Efile state tax 8. Efile state tax   Paying Tax Through Withholding or Estimated Tax Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Notification of Alien Status Withholding From CompensationWithholding on Wages Withholding on Pensions Withholding on Tip Income Independent Contractors Withholding From Other IncomeTax Withheld on Partnership Income Withholding on Scholarships and Fellowship Grants Income Entitled to Tax Treaty BenefitsStudents, teachers, and researchers. Efile state tax Tax Withheld on Real Property Sales Social Security and Medicare TaxesStudents and Exchange Visitors Agricultural Workers Self-Employment Tax International Social Security Agreements Estimated Tax Form 1040-ES (NR)Fiscal year. Efile state tax Introduction This chapter discusses how to pay your U. Efile state tax S. Efile state tax income tax as you earn or receive income during the year. Efile state tax In general, the federal income tax is a pay as you go tax. Efile state tax There are two ways to pay as you go. Efile state tax Withholding. Efile state tax If you are an employee, your employer probably withholds income tax from your pay. Efile state tax Tax may also be withheld from certain other income—including pensions, bonuses, commissions, and gambling winnings. Efile state tax In each case, the amount withheld is paid to the U. Efile state tax S. Efile state tax Treasury in your name. Efile state tax Estimated tax. Efile state tax If you do not pay your tax through withholding, or do not pay enough tax that way, you might have to pay estimated tax. Efile state tax People who are in business for themselves generally will have to pay their tax this way. Efile state tax You may have to pay estimated tax if you receive income such as dividends, interest, rent, and royalties. Efile state tax Estimated tax is used to pay not only income tax, but self-employment tax and alternative minimum tax as well. Efile state tax Topics - This chapter discusses: How to notify your employer of your alien status, Income subject to withholding of income tax, Exemptions from withholding, Social security and Medicare taxes, and Estimated tax rules. Efile state tax Useful Items - You may want to see: Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities 901 U. Efile state tax S. Efile state tax Tax Treaties Form (and Instructions) W-4 Employee's Withholding Allowance Certificate W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) W-8ECI Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States W-9 Request for Taxpayer Identification Number and Certification 1040-ES (NR) U. Efile state tax S. Efile state tax Estimated Tax for Nonresident Alien Individuals 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual 8288-B Application for Withholding Certificate for Dispositions by Foreign Persons of U. Efile state tax S. Efile state tax Real Property Interests 13930 Application for Central Withholding Agreement See chapter 12 for information about getting these publications and forms. Efile state tax Notification of Alien Status You must let your employer know whether you are a resident or a nonresident alien so your employer can withhold the correct amount of tax from your wages. Efile state tax If you are a resident alien under the rules discussed in chapter 1, you must file Form W-9 or a similar statement with your employer. Efile state tax If you are a nonresident alien under those rules, you must furnish to your employer Form 8233 or Form W-8BEN, establishing that you are a foreign person, or Form W-4, establishing that your compensation is subject to graduated withholding at the same rates as resident aliens or U. Efile state tax S. Efile state tax citizens. Efile state tax If you are a resident alien and you receive income other than wages (such as dividends and royalties) from sources within the United States, file Form W-9 or similar statement with the withholding agent (generally, the payer of the income) so the agent will not withhold tax on the income at the 30% (or lower treaty) rate. Efile state tax If you receive this type of income as a nonresident alien, file Form W-8BEN with the withholding agent so that the agent will withhold tax at the 30% (or lower treaty) rate. Efile state tax However, if the income is effectively connected with a U. Efile state tax S. Efile state tax trade or business, file Form W-8ECI instead. Efile state tax Withholding From Compensation The following discussion generally applies only to nonresident aliens. Efile state tax Tax is withheld from resident aliens in the same manner as U. Efile state tax S. Efile state tax citizens. Efile state tax Wages and other compensation paid to a nonresident alien for services performed as an employee are usually subject to graduated withholding at the same rates as resident aliens and U. Efile state tax S. Efile state tax citizens. Efile state tax Therefore, your compensation, unless it is specifically excluded from the term “wages” by law, or is exempt from tax by treaty, is subject to graduated withholding. Efile state tax Withholding on Wages If you are an employee and you receive wages subject to graduated withholding, you will be required to fill out a Form W-4. Efile state tax Also fill out Form W-4 for a scholarship or fellowship grant to the extent it represents payment for past, present, or future services and for which you are not claiming a tax treaty withholding exemption on Form 8233 (discussed later under Income Entitled to Tax Treaty Benefits). Efile state tax These are services you are required to perform as an employee and as a condition of receiving the scholarship or fellowship (or tuition reduction). Efile state tax Nonresident aliens should fill out Form W-4 using the following instructions instead of the instructions on the Form W-4. Efile state tax This is because of the restrictions on a nonresident alien's filing status, the limited number of personal exemptions a nonresident alien is allowed, and because a nonresident alien cannot claim the standard deduction. Efile state tax Enter your social security number (SSN) on line 2. Efile state tax Do not enter an individual taxpayer identification number (ITIN). Efile state tax Check only “Single” marital status on line 3 (regardless of your actual marital status). Efile state tax Claim only one allowance on line 5, unless you are a resident of Canada, Mexico, or South Korea, or a U. Efile state tax S. Efile state tax national. Efile state tax Write “Nonresident Alien” or “NRA” on the dotted line on line 6. Efile state tax You can request additional withholding on line 6 at your option. Efile state tax Do not claim “Exempt” withholding status on line 7. Efile state tax A U. Efile state tax S. Efile state tax national is an individual who, although not a U. Efile state tax S. Efile state tax citizen, owes his or her allegiance to the United States. Efile state tax U. Efile state tax S. Efile state tax nationals include American Samoans, and Northern Mariana Islanders who chose to become U. Efile state tax S. Efile state tax nationals instead of U. Efile state tax S. Efile state tax citizens. Efile state tax See Withholding on Scholarships and Fellowship Grants later, for how to fill out Form W-4 if you receive a U. Efile state tax S. Efile state tax source scholarship or fellowship grant that is not a payment for services. Efile state tax Students and business apprentices from India. Efile state tax   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you may claim an additional withholding allowance for the standard deduction. Efile state tax You can claim an additional withholding allowance for your spouse only if your spouse will have no gross income for 2013 and cannot be claimed as a dependent on another U. Efile state tax S. Efile state tax taxpayer's 2013 return. Efile state tax You may also claim an additional withholding allowance for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Efile state tax S. Efile state tax citizens. Efile state tax Household employees. Efile state tax   If you work as a household employee, your employer does not have to withhold income tax. Efile state tax However, you may agree to voluntary income tax withholding by filing a Form W-4 with your employer. Efile state tax The agreement goes into effect when your employer accepts the agreement by beginning the withholding. Efile state tax You or your employer may end the agreement by letting the other know in writing. Efile state tax Agricultural workers. Efile state tax   If you are an agricultural worker on an H-2A visa, your employer does not have to withhold income tax. Efile state tax However, your employer will withhold income tax only if you and your employer agree to withhold. Efile state tax In that case, you must provide your employer with a properly completed Form W-4. Efile state tax You can find more information about not having tax withheld at www. Efile state tax irs. Efile state tax gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Efile state tax Wages Exempt From Withholding Wages that are exempt from U. Efile state tax S. Efile state tax income tax under an income tax treaty are generally exempt from withholding. Efile state tax For information on how to claim this exemption from withholding, see Income Entitled to Tax Treaty Benefits , later. Efile state tax Wages paid to aliens who are residents of American Samoa, Canada, Mexico, Puerto Rico, or the U. Efile state tax S. Efile state tax Virgin Islands may be exempt from withholding. Efile state tax The following paragraphs explain these exemptions. Efile state tax Residents of Canada or Mexico engaged in transportation-related employment. Efile state tax   Certain residents of Canada or Mexico who enter or leave the United States at frequent intervals are not subject to withholding on their wages. Efile state tax These persons either: Perform duties in transportation service between the United States and Canada or Mexico, or Perform duties connected to the construction, maintenance, or operation of a waterway, viaduct, dam, or bridge crossed by, or crossing, the boundary between the United States and Canada or the boundary between the United States and Mexico. Efile state tax    This employment is subject to withholding of social security and Medicare taxes unless the services are performed for a railroad. Efile state tax   To qualify for the exemption from withholding during a tax year, a Canadian or Mexican resident must give the employer a statement in duplicate with name, address, and identification number, certifying that the resident: Is not a U. Efile state tax S. Efile state tax citizen or resident, Is a resident of Canada or Mexico, whichever applies, and Expects to perform duties previously described during the tax year in question. Efile state tax   The statement can be in any form, but it must be dated and signed by the employee and must include a written declaration that it is made under the penalties of perjury. Efile state tax Residents of American Samoa and Puerto Rico. Efile state tax   If you are a nonresident alien employee who is a resident of American Samoa or Puerto Rico, wages for services performed in American Samoa or Puerto Rico are generally not subject to withholding unless you are an employee of the United States or any of its agencies in American Samoa or Puerto Rico. Efile state tax Residents of the U. Efile state tax S. Efile state tax Virgin Islands. Efile state tax   Nonresident aliens who are bona fide residents of the U. Efile state tax S Virgin Islands are not subject to withholding of U. Efile state tax S. Efile state tax tax on income earned while temporarily employed in the United States. Efile state tax This is because those persons pay their income tax to the U. Efile state tax S. Efile state tax Virgin Islands. Efile state tax To avoid having tax withheld on income earned in the United States, bona fide residents of the U. Efile state tax S. Efile state tax Virgin Islands should write a letter, in duplicate, to their employers, stating that they are bona fide residents of the U. Efile state tax S. Efile state tax Virgin Islands and expect to pay tax on all income to the U. Efile state tax S. Efile state tax Virgin Islands. Efile state tax Withholding on Pensions If you receive a pension as a result of personal services performed in the United States, the pension income is subject to the 30% (or lower treaty) rate of withholding. Efile state tax You may, however, have tax withheld at graduated rates on the portion of the pension that arises from the performance of services in the United States after December 31, 1986. Efile state tax You must fill out Form W-8BEN and give it to the withholding agent or payer before the income is paid or credited to you. Efile state tax Withholding on Tip Income Tips you receive during the year for services performed in the United States are subject to U. Efile state tax S. Efile state tax income tax. Efile state tax Include them in taxable income. Efile state tax In addition, tips received while working for one employer, amounting to $20 or more in a month, are subject to graduated withholding. Efile state tax Independent Contractors If there is no employee-employer relationship between you and the person for whom you perform services, your compensation is subject to the 30% (or lower treaty) rate of withholding. Efile state tax However, if you are engaged in a trade or business in the United States during the tax year, your compensation for personal services as an independent contractor (independent personal services) may be entirely or partly exempt from withholding if you reach an agreement with the Internal Revenue Service on the amount of withholding required. Efile state tax An agreement that you reach with the IRS regarding withholding from your compensation for independent personal services is effective for payments covered by the agreement after it is agreed to by all parties. Efile state tax You must agree to timely file an income tax return for the current tax year. Efile state tax Central withholding agreements. Efile state tax   If you are a nonresident alien entertainer or athlete performing or participating in athletic events in the United States, you may be able to enter into a withholding agreement with the IRS for reduced withholding provided certain requirements are met. Efile state tax Under no circumstances will such a withholding agreement reduce taxes withheld to less than the anticipated amount of income tax liability. Efile state tax   File Form 13930 and the required attachments with the IRS to request a central withholding agreement. Efile state tax Either you or your authorized representative can file the form. Efile state tax It should be sent to the IRS at least 45 days before the tour begins or the event occurs. Efile state tax Exceptions will be considered on a case by case basis. Efile state tax   For more information on the CWA program, go to www. Efile state tax irs. Efile state tax gov/Individuals/International-Taxpayers/Central-Withholding-Agreements. Efile state tax Final payment exemption. Efile state tax   Your final payment of compensation during the tax year for independent personal services may be entirely or partly exempt from withholding. Efile state tax This exemption is available only once during your tax year and applies to a maximum of $5,000 of compensation. Efile state tax To obtain this exemption, you or your agent must give the following statements and information to the Commissioner or his delegate. Efile state tax A statement by each withholding agent from whom you have received gross income effectively connected with a trade or business in the United States during the tax year, showing the amount of income paid and the tax withheld. Efile state tax Each statement must be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Efile state tax A statement by the withholding agent from whom you expect to receive the final payment of compensation, showing the amount of the payment and the amount of tax that would be withheld if a final payment exemption were not granted. Efile state tax This statement must also be signed by the withholding agent and verified by a declaration that it is made under penalties of perjury. Efile state tax A statement by you that you do not intend to receive any other income effectively connected with a trade or business in the United States during the current tax year. Efile state tax The amount of tax that has been withheld or paid under any other provision of the Internal Revenue Code or regulations for any income effectively connected with your trade or business in the United States during the current tax year. Efile state tax The amount of your outstanding tax liabilities, if any, including interest and penalties, from the current tax year or prior tax periods. Efile state tax Any provision of an income tax treaty under which a partial or complete exemption from withholding may be claimed, the country of your residence, and a statement of sufficient facts to justify an exemption under the treaty. Efile state tax A statement signed by you, and verified by a declaration that it is made under penalties of perjury, that all the information given is true and that to your knowledge no relevant information has been omitted. Efile state tax   If satisfied with the information, the IRS will determine the amount of your tentative income tax for the tax year on gross income effectively connected with your trade or business in the United States. Efile state tax Ordinary and necessary business expenses can be taken into account if proven to the satisfaction of the Commissioner or his delegate. Efile state tax   The Commissioner or his delegate will send you a letter, directed to the withholding agent, showing the amount of the final payment of compensation that is exempt from withholding and the amount that can be paid to you because of the exemption. Efile state tax You must give two copies of the letter to the withholding agent and must also attach a copy of the letter to your income tax return for the tax year for which the exemption is effective. Efile state tax Allowance for Personal Exemption Withholding on payments for independent personal services is generally based on the amount of your compensation payment minus the value of one exemption ($3,950 for 2014). Efile state tax To determine the income for independent personal services performed in the United States to which the 30% (or lower treaty) rate will apply, you are allowed one personal exemption if you are not a U. Efile state tax S. Efile state tax national and are not a resident of Canada, Mexico, or South Korea. Efile state tax For purposes of 30% withholding, the exemption is prorated at $10. Efile state tax 82 a day in 2014 for the period that labor or personal services are performed in the United States. Efile state tax To claim an exemption from withholding on the personal exemption amount, fill out the applicable parts of Form 8233 and give it to the withholding agent. Efile state tax Example. Efile state tax Eric Johannsen, who is a resident of Country X worked under a contract with a U. Efile state tax S. Efile state tax firm (not as an employee) in the United States for 100 days during 2014 before returning to his country. Efile state tax He earned $6,000 for the services performed (not considered wages) in the United States. Efile state tax Eric is married and has three dependent children. Efile state tax His wife is not employed and has no income subject to U. Efile state tax S. Efile state tax tax. Efile state tax The amount of the personal exemption to be allowed against the income for his personal services performed within the United States in 2014 is $1,082 (100 days × $10. Efile state tax 82), and withholding at 30% is applied against the balance. Efile state tax Thus, $1,475. Efile state tax 40 in tax is withheld from Eric's earnings (30% of $4,918 ($6,000 − $1,082). Efile state tax U. Efile state tax S. Efile state tax nationals or residents of Canada, Mexico, or South Korea. Efile state tax   If you are a nonresident alien who is a resident of Canada, Mexico, or South Korea, or who is a national of the United States, you are subject to the same 30% withholding on your compensation for independent personal services performed in the United States. Efile state tax However, if you are a U. Efile state tax S. Efile state tax national or a resident of Canada or Mexico, you are allowed the same personal exemptions as U. Efile state tax S. Efile state tax citizens. Efile state tax For the 30% (or lower treaty) rate withholding, you can take $10. Efile state tax 82 per day for each allowable exemption in 2014. Efile state tax If you are a resident of South Korea, you are allowed personal exemptions for yourself and for your spouse and children who live with you in the United States at any time during the tax year. Efile state tax However, the additional exemptions for your spouse and children must be further prorated as explained in chapter 5 under Exemptions . Efile state tax Students and business apprentices from India. Efile state tax   If you are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you are allowed an exemption for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Efile state tax S. Efile state tax taxpayer's 2014 return. Efile state tax You are also allowed an exemption for each dependent not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Efile state tax S. Efile state tax citizens. Efile state tax For the 30% (or lower treaty rate) withholding on compensation for independent personal services performed in the United States, you are allowed $10. Efile state tax 82 per day for each allowable exemption in 2014. Efile state tax Refund of Taxes Withheld in Error Multi-level marketing. Efile state tax   If you are a distributor for a multi-level marketing company who had taxes withheld in error, file a U. Efile state tax S. Efile state tax income tax return (Form 1040NR, Form 1040NR-EZ, or Form 1120-F) or, if a tax return has already been filed, a claim for refund (Form 1040X or amended Form 1120-F) to recover the amount withheld in error. Efile state tax You must also attach to the U. Efile state tax S. Efile state tax income tax return or claim for refund supporting information that includes, but is not limited to, the following items. Efile state tax A copy of your Form W-2, Form 1042-S, or Form 1099 to prove the amount of taxes withheld. Efile state tax A statement explaining why income reported on your Form W-2, Form 1042-S, or Form 1099 is not subject to U. Efile state tax S. Efile state tax taxation. Efile state tax A statement listing all the dates you entered and left the United States during the taxable year. Efile state tax If the compensation is multi-year compensation, the statement must list all the dates you entered and left the United States during each of the taxable years to which the compensation is attributable. Efile state tax A copy of any documents or records that show the number of days you actually were present in the United States during the years listed. Efile state tax A statement providing: (a) the number of days (or unit of time less than a day, if appropriate) that personal services were performed in the United States in connection with recruiting, training, and supporting your lower-tier distributors; and (b) the total number of days (or unit of time less than a day, if appropriate) that personal services were performed globally in connection with recruiting, training, and supporting your lower-tier distributors. Efile state tax Any further relevant document or record supporting your claim that the taxes were withheld in error. Efile state tax Withholding From Other Income Other income subject to 30% withholding generally includes fixed or determinable income such as interest (other than portfolio interest), dividends, pensions and annuities, and gains from certain sales and exchanges, discussed in chapter 4. Efile state tax It also includes 85% of social security benefits paid to nonresident aliens. Efile state tax Refund of taxes withheld in error on social security benefits paid to resident aliens. Efile state tax   Social security benefits paid to a lawful permanent resident (green card holder) are not subject to 30% withholding. Efile state tax For U. Efile state tax S. Efile state tax income tax purposes, green card holders continue to be resident aliens until their lawful permanent resident status under immigration laws is either taken away or is administratively or judicially determined to have been abandoned. Efile state tax See Green Card Test in chapter 1. Efile state tax If you are a green card holder and tax was withheld in error on your social security benefits because you have a foreign address, the withholding tax is refundable by the Social Security Administration (SSA) or the IRS. Efile state tax SSA will refund taxes erroneously withheld if the refund can be processed during the same calendar year in which the tax was withheld. Efile state tax If SSA cannot refund the taxes withheld, you must file a Form 1040 or 1040A with the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301 to determine if you are entitled to a refund. Efile state tax You must also attach the following to your Form 1040 or 1040A. Efile state tax A copy of Form SSA-1042S, Social Security Benefit Statement. Efile state tax A copy of the “green card. Efile state tax ” A signed declaration that includes the following statements: The SSA should not have withheld income tax from my social security benefits because I am a U. Efile state tax S. Efile state tax lawful permanent resident and my green card has been neither revoked nor administratively or judicially determined to have been abandoned. Efile state tax I am filing a U. Efile state tax S. Efile state tax income tax return for the tax year as a resident alien reporting all of my worldwide income. Efile state tax I have not claimed benefits for the tax year under an income tax treaty as the resident of a country other than the United States. Efile state tax Other income not subject to withholding of 30% (or lower treaty) rate. Efile state tax   The following income is not subject to withholding at the 30% (or lower treaty) rate if you file Form W-8ECI with the payer of the income. Efile state tax Income (other than compensation) that is effectively connected with your U. Efile state tax S. Efile state tax trade or business. Efile state tax Income from real property that you choose to treat as effectively connected with a U. Efile state tax S. Efile state tax trade or business. Efile state tax See Income From Real Property in chapter 4 for details about this choice. Efile state tax   Special rules for withholding on partnership income, scholarships, and fellowships are explained next. Efile state tax Tax Withheld on Partnership Income If you are a foreign partner in a U. Efile state tax S. Efile state tax or foreign partnership, the partnership will withhold tax on your share of effectively connected taxable income (ECTI) from the partnership. Efile state tax You may be able to reduce your ECTI subject to withholding by certain partner-level deductions. Efile state tax Generally, you must use Form 8804-C for this purpose. Efile state tax See the Instructions for Form 8804-C for more information. Efile state tax The withholding rate on your share of effectively connected income is generally the highest rate of tax specified under section 1 of the Code (39. Efile state tax 6% for 2014). Efile state tax However, the partnership may withhold at the highest rate that applies to a particular type of income allocable to you if you gave the partnership the appropriate documentation. Efile state tax Long-term capital gain is an example of a particular type of income to which the highest tax rate applies. Efile state tax Claim the tax withheld as a credit on your 2014 Form 1040NR. Efile state tax The partnership will give you a statement on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, showing the tax withheld. Efile state tax A partnership that is publicly traded will withhold tax on your actual distributions of effectively connected income. Efile state tax In this case the partnership will give you a statement on Form 1042-S, Foreign Person's U. Efile state tax S. Efile state tax Source Income Subject to Withholding. Efile state tax Withholding on Scholarships and Fellowship Grants There is no withholding on a qualified scholarship received by a candidate for a degree. Efile state tax See chapter 3. Efile state tax If you are a nonresident alien student or grantee with an “F,” “J,” “M,” or “Q” visa and you receive a U. Efile state tax S. Efile state tax source grant or scholarship that is not fully exempt, the withholding agent (usually the payer of the scholarship) withholds tax at 14% (or lower treaty rate) of the taxable part of the grant or scholarship that is not a payment for services. Efile state tax However, if you are not a candidate for a degree and the grant does not meet certain requirements, tax will be withheld at the 30% (or lower treaty) rate. Efile state tax Any part of a scholarship or fellowship grant that is a payment for services is subject to graduated withholding as discussed earlier under Withholding on Wages. Efile state tax Alternate Withholding Procedure Your withholding agent may choose to use an alternate procedure by asking you to fill out Form W-4 and the Personal Allowances Worksheet (attached to Form W-4). Efile state tax Use the following instructions instead of the Form W-4 instructions to complete the worksheet. Efile state tax Line A. Efile state tax   Enter the total of the following amounts on line A. Efile state tax Personal exemption. Efile state tax   Include the prorated part of your allowable personal exemption. Efile state tax Figure the amount by multiplying the number of days you expect to be in the United States in 2014 by the daily exemption amount ($10. Efile state tax 82). Efile state tax Expenses. Efile state tax   Include expenses that will be deductible on your return. Efile state tax These include away-from-home expenses (meals, lodging, and transportation), certain state and local income taxes, charitable contributions, and casualty losses, discussed earlier under Itemized Deductions in chapter 5. Efile state tax They also include business expenses, moving expenses, and the IRA deduction discussed under Deductions in chapter 5. Efile state tax Nontaxable grant or scholarship. Efile state tax   Include the part of your grant or scholarship that is not taxable under U. Efile state tax S. Efile state tax law or under a tax treaty. Efile state tax Line B. Efile state tax   Enter -0- unless the following paragraph applies to you. Efile state tax   If you are a student who qualifies under Article 21(2) of the United States-India Income Tax Treaty, and you are not claiming deductions for away-from-home expenses or other itemized deductions (discussed earlier), enter the standard deduction on line B. Efile state tax The standard deduction amount for 2013 is $6,100. Efile state tax Lines C and D. Efile state tax   Enter -0- on both lines unless the following paragraphs apply to you. Efile state tax   If you are a resident of Canada, Mexico, South Korea, or a U. Efile state tax S. Efile state tax national, an additional daily exemption amount may be allowed for your spouse and each of your dependents. Efile state tax   If you are a resident of India who is eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty, you can claim an additional daily exemption amount for your spouse only if your spouse will have no gross income for 2014 and cannot be claimed as a dependent on another U. Efile state tax S. Efile state tax taxpayer's 2014 return. Efile state tax You can also claim an additional amount for each of your dependents not admitted to the United States on “F-2,” “J-2,” or “M-2” visas if they meet the same rules that apply to U. Efile state tax S. Efile state tax citizens. Efile state tax   Enter any additional amount for your spouse on line C. Efile state tax Enter any additional amount for your dependents on line D. Efile state tax Lines E, F, and G. Efile state tax   No entries should be made on lines E, F, and G. Efile state tax Line H. Efile state tax   Add the amounts on lines A through D and enter the total on line H. Efile state tax Form W-4. Efile state tax   Complete lines 1 through 4 of Form W-4. Efile state tax Sign and date the form and give it with the Personal Allowances Worksheet to your withholding agent. Efile state tax   If you file a Form W-4 to reduce or eliminate the withholding on your scholarship or grant, you must file an annual U. Efile state tax S. Efile state tax income tax return to be allowed the exemptions and deductions you claimed on that form. Efile state tax If you are in the United States during more than one tax year, you must attach a statement to your yearly Form W-4 indicating that you have filed a U. Efile state tax S. Efile state tax income tax return for the previous year. Efile state tax If you have not been in the United States long enough to be required to file a return, you must attach a statement to your Form W-4 saying you will file a U. Efile state tax S. Efile state tax income tax return when required. Efile state tax After the withholding agent has accepted your Form W-4, tax will be withheld on your scholarship or grant at the graduated rates that apply to wages. Efile state tax The gross amount of the income is reduced by the amount on line H of the worksheet and the withholding tax is figured on the remainder. Efile state tax You will receive a Form 1042-S from the withholding agent (usually the payer of your grant) showing the gross amount of your taxable scholarship or fellowship grant less the withholding allowance amount, the tax rate, and the amount of tax withheld. Efile state tax Use this form to prepare your annual U. Efile state tax S. Efile state tax income tax return. Efile state tax Income Entitled to Tax Treaty Benefits If a tax treaty between the United States and your country provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payor of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption. Efile state tax Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent. Efile state tax File Form W-8BEN for income that is not personal services income. Efile state tax File Form 8233 for personal services income as discussed next. Efile state tax Employees and independent contractors. Efile state tax   If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal service income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received. Efile state tax   Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. Efile state tax This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. Efile state tax In this case, you must file Form 1040NR (or Form 1040NR-EZ if you qualify) to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption. Efile state tax Students, teachers, and researchers. Efile state tax   Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. Efile state tax For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties. Efile state tax   If you received a scholarship or fellowship and personal services income from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income. Efile state tax Special events and promotions. Efile state tax   Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from rock music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. Efile state tax Form 13930 is used to request a reduction in withholding. Efile state tax Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. Efile state tax One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year. Efile state tax You will be required to pay U. Efile state tax S. Efile state tax tax, at the time of your departure from the United States, on any income for which you incorrectly claimed a treaty exemption. Efile state tax For more details on treaty provisions that apply to compensation, see Publication 901. Efile state tax Tax Withheld on Real Property Sales If you are a nonresident alien and you dispose of a U. Efile state tax S. Efile state tax real property interest, the transferee (buyer) of the property generally must withhold a tax equal to 10% of the amount realized on the disposition. Efile state tax A distribution by a qualified investment entity to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U. Efile state tax S. Efile state tax real property interest by the shareholder is subject to withholding at 35%. Efile state tax Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. Efile state tax These rules are covered in Publication 515. Efile state tax For information on the tax treatment of dispositions of U. Efile state tax S. Efile state tax real property interests, see Real Property Gain or Loss in chapter 4. Efile state tax If you are a partner in a domestic partnership, and the partnership disposes of a U. Efile state tax S. Efile state tax real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. Efile state tax Your share of the income and tax withheld will be reported to you on Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U. Efile state tax S. Efile state tax Source Income Subject to Withholding (in the case of a publicly traded partnership). Efile state tax Withholding is not required in the following situations. Efile state tax The property is acquired by the buyer for use as a residence and the amount realized (sales price) is not more than $300,000. Efile state tax The property disposed of is an interest in a domestic corporation if any class of stock of the corporation is regularly traded on an established securities market. Efile state tax However, this exception does not apply to certain dispositions of substantial amounts of non-publicly traded interests in publicly traded corporations. Efile state tax The property disposed of is an interest in a U. Efile state tax S. Efile state tax corporation that is not regularly traded on an established market and you (the seller) give the buyer a copy of a statement issued by the corporation certifying that the interest is not a U. Efile state tax S. Efile state tax real property interest. Efile state tax You (the seller) give the buyer a certification stating, under penalties of perjury, that you are not a foreign person, and containing your name, U. Efile state tax S. Efile state tax taxpayer identification number, and home address. Efile state tax You can give the certification to a qualified substitute. Efile state tax The qualified substitute gives the buyer a statement, under penalties of perjury, that the certification is in the possession of the qualified substitute. Efile state tax For this purpose, a qualified substitute is (a) the person (including any attorney or title company) responsible for closing the transaction, other than your agent, and (b) the buyer's agent. Efile state tax The buyer receives a withholding certificate from the Internal Revenue Service. Efile state tax You give the buyer written notice that you are not required to recognize any gain or loss on the transfer because of a nonrecognition provision in the Internal Revenue Code or a provision in a U. Efile state tax S. Efile state tax tax treaty. Efile state tax The buyer must file a copy of the notice with the Ogden Service Center, P. Efile state tax O. Efile state tax Box 409101, Ogden, UT 84409. Efile state tax You must verify the notice as true and sign it under penalties of perjury. Efile state tax The notice must contain the following information. Efile state tax A statement that the notice is a notice of nonrecognition under regulation section 1. Efile state tax 1445-2(d)(2). Efile state tax Your name, taxpayer identification number, and home address. Efile state tax A statement that you are not required to recognize any gain or loss on the transfer. Efile state tax A brief description of the transfer. Efile state tax A brief summary of the law and facts supporting your claim that recognition of gain or loss is not required. Efile state tax You may not give the buyer a written notice for any of the following transfers: the sale of your main home on which you exclude gain, a like-kind exchange that does not qualify for nonrecognition treatment in its entirety, or a deferred like-kind exchange that has not been completed at the time the buyer must file Form 8288. Efile state tax Instead, a withholding certificate (described next) must be obtained. Efile state tax The amount you realize on the transfer of a U. Efile state tax S. Efile state tax real property interest is zero. Efile state tax The property is acquired by the United States, a U. Efile state tax S. Efile state tax state or possession, a political subdivision, or the District of Columbia. Efile state tax The distribution is from a domestically controlled qualified investment entity (QIE) and is treated as a distribution of a U. Efile state tax S. Efile state tax real property interest only because an interest in the entity was disposed of in an applicable wash sale transaction. Efile state tax For the definition of a QIE, see Qualified investment entities under Real Property Gain or Loss, earlier. Efile state tax See Wash sale under Real Property Gain or Loss in chapter 4. Efile state tax The certifications in (3) and (4) must be disregarded by the buyer if the buyer or qualified substitute has actual knowledge, or receives notice from a seller's or buyer's agent (or substitute), that they are false. Efile state tax This also applies to the qualified substitute's statement under (4). Efile state tax Withholding certificates. Efile state tax   The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. Efile state tax Either you or the buyer can request a withholding certificate. Efile state tax   A withholding certificate can be issued due to any of the following. Efile state tax The IRS determines that reduced withholding is appropriate because either: The amount required to be withheld would be more than your maximum tax liability, or Withholding of the reduced amount would not jeopardize collection of the tax. Efile state tax All of your realized gain is exempt from U. Efile state tax S. Efile state tax tax. Efile state tax You or the buyer enters into an agreement for the payment of tax providing security for the tax liability. Efile state tax   Get Publication 515 and Form 8288-B for information on procedures to request a withholding certificate. Efile state tax Credit for tax withheld. Efile state tax   The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288, U. Efile state tax S. Efile state tax Withholding Tax Return for Dispositions by Foreign Persons of U. Efile state tax S. Efile state tax Real Property Interests. Efile state tax This form is filed with the IRS with copies A and B of Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U. Efile state tax S. Efile state tax Real Property Interests. Efile state tax Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your taxpayer identification number (TIN). Efile state tax You must file Copy B with your tax return to take credit for the tax withheld. Efile state tax   A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. Efile state tax The IRS will send you a letter requesting the TIN and providing instructions for how to get a TIN. Efile state tax When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A. Efile state tax Social Security and Medicare Taxes If you work as an employee in the United States, you must pay social security and Medicare taxes in most cases. Efile state tax Your payments of these taxes contribute to your coverage under the U. Efile state tax S. Efile state tax social security system. Efile state tax Social security coverage provides retirement benefits, survivors and disability benefits, and medical insurance (Medicare) benefits to individuals who meet certain eligibility requirements. Efile state tax In most cases, the first $113,700 of taxable wages received in 2013 for services performed in the United States is subject to social security tax. Efile state tax All taxable wages are subject to Medicare tax. Efile state tax Your employer deducts these taxes from each wage payment. Efile state tax Your employer must deduct these taxes even if you do not expect to qualify for social security or Medicare benefits. Efile state tax You can claim a credit for excess social security tax on your income tax return if you have more than one employer and the amount deducted from your combined wages for 2013 is more than $7,049. Efile state tax 40. Efile state tax Use the appropriate worksheet in chapter 3 of Publication 505, Tax Withholding and Estimated Tax, to figure your credit. Efile state tax If any one employer deducted more than $7,049. Efile state tax 40, you cannot claim a credit for that amount. Efile state tax Ask your employer to refund the excess. Efile state tax If your employer does not refund the excess, you can file a claim for refund using Form 843. Efile state tax In general, U. Efile state tax S. Efile state tax social security and Medicare taxes apply to payments of wages for services performed as an employee in the United States, regardless of the citizenship or residence of either the employee or the employer. Efile state tax In limited situations, these taxes apply to wages for services performed outside the United States. Efile state tax Your employer should be able to tell you if social security and Medicare taxes apply to your wages. Efile state tax You cannot make voluntary payments if no taxes are due. Efile state tax Additional Medicare Tax. Efile state tax   Beginning in 2013, in addition to the Medicare tax, a 0. Efile state tax 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $250,000 if married filing jointly, $125,000 if married filing separately, or $200,000 for any other filing status. Efile state tax   There are no special rules for nonresident aliens for purposes of Additional Medicare Tax. Efile state tax Wages, RRTA compensation, and self-employment income that are subject to Medicare tax will also be subject to Additional Medicare Tax if in excess of the applicable threshold. Efile state tax   Your employer is responsible for withholding the 0. Efile state tax 9% Additional Medicare Tax on Medicare wages or RRTA compensation it pays to you in excess of $200,000 in the calendar year. Efile state tax If you intend to file a joint return and you anticipate that you and your spouse's individual wages are not going to be more than $200,000 but your combined wages and self-employment income are going to be more than $250,000, you may want to request additional withholding on Form W-4 and/or make estimated tax payments. Efile state tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Efile state tax    See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Efile state tax For more information on Additional Medicare Tax, go to IRS. Efile state tax gov and enter “Additional Medicare Tax” in the search box. Efile state tax   Self-employed individuals may also be required to pay Additional Medicare Tax. Efile state tax See Self-Employment Tax , later. Efile state tax Students and Exchange Visitors Generally, services performed by you as a nonresident alien temporarily in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. Efile state tax This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. Efile state tax These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment. Efile state tax Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien as discussed in chapter 1, even though your nonimmigrant classification (“F,” “J,” “M,” or “Q”) remains the same. Efile state tax Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security. Efile state tax Nonresident Alien Students If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. Efile state tax In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. Efile state tax Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien. Efile state tax Any student who is enrolled and regularly attending classes at a school may be exempt from social security and Medicare taxes on pay for services performed for that school. Efile state tax The U. Efile state tax S. Efile state tax Citizenship and Immigration Services (USCIS) permits on-campus work for students in “F-1” status if it does not displace a U. Efile state tax S. Efile state tax resident. Efile state tax On-campus work means work performed on the school's premises. Efile state tax On-campus work includes work performed at an off-campus location that is educationally affiliated with the school. Efile state tax On-campus work under the terms of a scholarship, fellowship, or assistantship is considered part of the academic program of a student taking a full course of study and is permitted by the USCIS. Efile state tax Social security and Medicare taxes are not withheld from pay for this work unless the student is considered a resident alien. Efile state tax If services performed by a nonresident alien student are not considered as performed to carry out the purpose for which the student was admitted to the United States, social security and Medicare taxes will be withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Efile state tax Exchange Visitors Exchange visitors are temporarily admitted to the United States under section 101(a)(15)(J) of the Immigration and Nationality Act. Efile state tax Social security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien. Efile state tax If services performed by an exchange visitor are not considered as performed to carry out the purpose for which the visitor was admitted to the United States, social security and Medicare taxes are withheld from pay for the services unless the pay is exempt under the Internal Revenue Code. Efile state tax Nonresident aliens temporarily admitted to the United States as participants in international cultural exchange programs under section 101(a)(15)(Q) of the Immigration and Nationality Act may be exempt from social security and Medicare taxes. Efile state tax The employer must be the petitioner through whom the alien obtained the “Q” visa. Efile state tax Social security and Medicare taxes are not withheld from pay for this work unless the alien is considered a resident alien. Efile state tax Refund of Taxes Withheld in Error If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. Efile state tax If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Efile state tax Attach the following items to Form 843. Efile state tax A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld. Efile state tax A copy of your visa. Efile state tax Form I-94 (or other documentation showing your dates of arrival or departure). Efile state tax If you have an F-1 visa, documentation showing permission to work in the U. Efile state tax S. Efile state tax If you have a J-1 visa, documentation showing permission to work in the U. Efile state tax S. Efile state tax If you are engaged in optional practical training or employment due to severe economic necessity, documentation showing permission to work in the U. Efile state tax S. Efile state tax A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. Efile state tax If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer or on Form 8316 claiming your employer will not issue the refund. Efile state tax If you were exempt from social security and Medicare tax for only part of the year, pay statements showing the tax paid during the period you were exempt. Efile state tax File Form 843 (with attachments) with the Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201-0038. Efile state tax Do not use Form 843 to request a refund of Additional Medicare Tax. Efile state tax If Additional Medicare Tax was withheld from your pay in error, you can claim a credit for any withheld Additional Medicare Tax against the total tax liability shown on your tax return by filing Form 8959 with Form 1040 or 1040NR. Efile state tax If Additional Medicare Tax was withheld in error in a prior year for which you already filed Form 1040 or 1040NR, you must file Form 1040X, Amended U. Efile state tax S. Efile state tax Individual Income Tax Return, for the prior year in which the wages or compensation were originally received to recover the Additional Medicare Tax withheld in error. Efile state tax See the Instructions for Form 1040X. Efile state tax Agricultural Workers Agricultural workers temporarily admitted into the United States on H-2A visas are exempt from social security and Medicare taxes on compensation paid to them for services performed in connection with the H-2A visa. Efile state tax You can find more information about not having tax withheld at www. Efile state tax irs. Efile state tax gov/Individuals/International-Taxpayers/Foreign-Agricultural-Workers. Efile state tax Self-Employment Tax Self-employment tax is the social security and Medicare taxes for individuals who are self-employed. Efile state tax Nonresident aliens are not subject to self-employment tax unless an international social security agreement in effect determines that they are covered under the U. Efile state tax S. Efile state tax social security system. Efile state tax Residents of the U. Efile state tax S. Efile state tax Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are considered U. Efile state tax S. Efile state tax residents for this purpose and are subject to the self-employment tax. Efile state tax Resident aliens must pay self-employment tax under the same rules that apply to U. Efile state tax S. Efile state tax citizens. Efile state tax However, a resident alien employed by an international organization, a foreign government, or a wholly-owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States. Efile state tax Self-employment income you receive while you are a resident alien is subject to self-employment tax even if it was paid for services you performed as a nonresident alien. Efile state tax Example. Efile state tax Bill Jones is an author engaged in the business of writing books. Efile state tax Bill had several books published in a foreign country while he was a citizen and resident of that country. Efile state tax During 2013, Bill entered the United States as a resident alien. Efile state tax After becoming a U. Efile state tax S. Efile state tax resident, he continued to receive royalties from his foreign publisher. Efile state tax Bill reports his income and expenses on the cash basis (he reports income on his tax return when received and deducts expenses when paid). Efile state tax Bill's 2013 self-employment income includes the royalties received after he became a U. Efile state tax S. Efile state tax resident even though the books were published while he was a nonresident alien. Efile state tax This royalty income is subject to self-employment tax. Efile state tax Reporting self-employment tax. Efile state tax   Use Schedule SE (Form 1040) to report and figure your self-employment tax. Efile state tax Then enter the tax on Form 1040, line 56, or Form 1040NR, line 54. Efile state tax Attach Schedule SE to Form 1040 or Form 1040NR. Efile state tax Additional Medicare Tax. Efile state tax   Self-employed individuals must pay a 0. Efile state tax 9% Additional Medicare Tax on self-employment income that exceeds one of the following threshold amounts (based on your filing status): Married filing jointly — $250,000; Married filing separately — $125,000; Single, Head of household, or Qualifying widow(er) — $200,000. Efile state tax   If you have both wages and self-employment income, the threshold amount for applying the Additional Medicare Tax on the self-employment income is reduced (but not below zero) by the amount of wages subject to Additional Medicare Tax. Efile state tax A self-employment loss should not be considered for purposes of this tax   If you file Form 1040NR, you must pay Additional Medicare Tax if the total of your wages and your self-employment income was more than $125,000 if married (Box 3, 4, or 5 on page 1 of Form 1040NR), or $200,000 if single or qualifying widow(er) (Box 1, 2, or 6 on page 1 of Form 1040NR). Efile state tax   See Form 8959, Additional Medicare Tax, and the Instructions for Form 8959 to determine whether you are required to pay Additional Medicare Tax. Efile state tax For more information on Additional Medicare Tax, go to IRS. Efile state tax gov and enter “Additional Medicare Tax” in the search box. Efile state tax Deduction for employer-equivalent portion of self-employment tax. Efile state tax   If you must pay self-employment tax, you can deduct a portion of the self-employment tax paid in figuring your adjusted gross income. Efile state tax This deduction is figured on Schedule SE (Form 1040). Efile state tax Note. Efile state tax No portion of the Additional Medicare Tax is deductible for self-employment tax. Efile state tax More information. Efile state tax   Get Publication 334, Tax Guide for Small Business, for more information about self-employment tax. Efile state tax International Social Security Agreements The United States has entered into social security agreements with foreign countries to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries. Efile state tax These agreements are commonly referred to as totalization agreements. Efile state tax Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. Efile state tax The agreements generally make sure that social security taxes (including self-employment tax) are paid only to one country. Efile state tax Agreements are in effect with the following countries. Efile state tax Australia. Efile state tax Austria. Efile state tax Belgium. Efile state tax Canada. Efile state tax Chile. Efile state tax Czech Republic. Efile state tax Denmark. Efile state tax Finland. Efile state tax France. Efile state tax Germany. Efile state tax Greece. Efile state tax Ireland. Efile state tax Italy. Efile state tax Japan. Efile state tax Korea, South. Efile state tax Luxembourg. Efile state tax The Netherlands. Efile state tax Norway. Efile state tax Poland. Efile state tax Portugal. Efile state tax Spain. Efile state tax Sweden. Efile state tax Switzerland. Efile state tax The United Kingdom. Efile state tax Agreements with other countries are expected to enter into force in the future. Efile state tax Employees. Efile state tax   Generally, under these agreements, you are subject to social security taxes only in the country where you are working. Efile state tax However, if you are temporarily sent to work for the same employer in the United States and your pay would normally be subject to social security taxes in both countries, most agreements provide that you remain covered only by the social security system of the country from which you were sent. Efile state tax You can get more information on any agreement by contacting the U. Efile state tax S. Efile state tax Social Security Administration at the address given later. Efile state tax If you have access to the Internet, you can get more information at www. Efile state tax socialsecurity. Efile state tax gov/international. Efile state tax   To establish that your pay is subject only to foreign social security taxes and is exempt from U. Efile state tax S. Efile state tax social security taxes (including the Medicare tax) under an agreement, you or your employer should request a certificate of coverage from the appropriate agency of the foreign country. Efile state tax This will usually be the same agency to which you or your employer pays your foreign social security taxes. Efile state tax The foreign agency will be able to tell you what information is needed for them to issue the certificate. Efile state tax Your employer should keep a copy of the certificate because it may be needed to show why you are exempt from U. Efile state tax S. Efile state tax social security taxes. Efile state tax Only wages paid on or after the effective date of the agreement can be exempt from U. Efile state tax S. Efile state tax social security taxes. Efile state tax    Some of the countries with which the United States has agreements will not issue certificates of coverage. Efile state tax In this case, either you or your employer should request a statement that your wages are not covered by the U. Efile state tax S. Efile state tax social security system. Efile state tax Request the statement from the following address. Efile state tax U. Efile state tax S. Efile state tax Social Security Administration Office of International Programs P. Efile state tax O. Efile state tax Box 17741 Baltimore, MD 21235-7741 Self-employed individuals. Efile state tax   Under most agreements, self-employed individuals are covered by the social security system of the country where they reside. Efile state tax However, under some agreements, you may be exempt from U. Efile state tax S. Efile state tax self-employment tax if you temporarily transfer your business activity to or from the United States. Efile state tax   If you believe that your self-employment income is subject only to U. Efile state tax S. Efile state tax self-employment tax and is exempt from foreign social security taxes, request a certificate of coverage from the U. Efile state tax S. Efile state tax Social Security Administration at the address given earlier. Efile state tax This certificate will establish your exemption from foreign social security taxes. Efile state tax   To establish that your self-employment income is subject only to foreign social security taxes and is exempt from U. Efile state tax S. Efile state tax self-employment tax, request a certificate of coverage from the appropriate agency of the foreign country. Efile state tax If the foreign country will not issue the certificate, you should request a statement that your income is not covered by the U. Efile state tax S. Efile state tax social security system. Efile state tax Request it from the U. Efile state tax S. Efile state tax Social Security Administration at the address given earlier. Efile state tax Attach a photocopy of either statement to Form 1040 each year you are exempt. Efile state tax Also print “Exempt, see attached statement” on the line for self-employment tax. Efile state tax Estimated Tax Form 1040-ES (NR) You may have income from which no U. Efile state tax S. Efile state tax income tax is withheld. Efile state tax Or the amount of tax withheld may be less than the income tax you estimate you will owe at the end of the year. Efile state tax If so, you may have to pay estimated tax. Efile state tax Generally, you must make estimated tax payments for 2014 if you expect to owe at least $1,000 in tax and you expect your withholding and certain refundable credits to be less than the smaller of: 90% of the tax to be shown on your 2014 income tax return, or 100% of the tax shown on your 2013 income tax return (if your 2013 return covered all 12 months of the year). Efile state tax If your adjusted gross income for 2013 was more than $150,000 ($75,000 if your filing status for 2014 is married filing separately), substitute 110% for 100% in (2) above if you are not a farmer or fisherman. Efile state tax Item (2) does not apply if you did not file a 2013 return. Efile state tax A nonresident alien should use Form 1040-ES (NR) to figure and pay estimated tax. Efile state tax If you pay by check, make it payable to the "United States Treasury. Efile state tax " How to estimate your tax for 2014. Efile state tax   If you filed a 2013 return on Form 1040NR or Form 1040NR-EZ and expect your income, number of exemptions, and total deductions for 2014 to be nearly the same, you should use your 2013 return as a guide to complete the Estimated Tax Worksheet in the Form 1040-ES (NR) instructions. Efile state tax If you did not file a return for 2013, or if your income, exemptions, deductions, or credits will be different for 2014, you must estimate these amounts. Efile state tax Figure your estimated tax liability using the Tax Rate Schedule in the 2014 Form 1040-ES (NR) instructions for your filing status. Efile state tax Note. Efile state tax If you expect to be a resident of Puerto Rico during the entire year, use Form 1040-ES or Formulario 1040-ES (PR). Efile state tax When to pay estimated tax. Efile state tax   Make your first estimated tax payment by the due date for filing the previous year's Form 1040NR or Form 1040NR-EZ. Efile state tax If you have wages subject to the same withholding rules that apply to U. Efile state tax S. Efile state tax citizens, you must file Form 1040NR or Form 1040NR-EZ and make your first estimated tax payment by April 15, 2014. Efile state tax If you do not have wages subject to withholding, file your income tax return and make your first estimated tax payment by June 16, 2014. Efile state tax   If your first estimated tax payment is due April 15, 2014, you can pay your estimated tax in full at that time or in four equal installments by the dates shown next. Efile state tax 1st installment April 15, 2014 2nd installment June 16, 2014 3rd installment Sept. Efile state tax 15, 2014 4th installment Jan. Efile state tax 15, 2015 If your first payment is not due until June 16, 2014, you can pay your estimated tax in full at that time or: ½ of your estimated tax by June 16, 2014, 1/4 of the tax by September 15, 2014, and 1/4 by January 15, 2015. Efile state tax    You do not have to make the payment due January 15, 2015, if you file your 2014 Form 1040NR or 1040NR-EZ by February 2, 2015, and pay the entire balance due with your return. Efile state tax Fiscal year. Efile state tax   If your return is not on a calendar year basis, your due dates are the 15th day of the 4th, 6th, and 9th months of your fiscal year, and the 1st month of the following fiscal year. Efile state tax If any date falls on a Saturday, Sunday, or legal holiday, use the next day that is not a Saturday, Sunday, or legal holiday. Efile state tax Changes in income, deductions, or exemptions. Efile state tax   Even if you are not required to make an estimated tax payment in April or June, your circumstances may change so that you will have to make estimated tax payments later. Efile state tax This can happen if you receive additional income or if any of your deductions are reduced or eliminated. Efile state tax If so, see the instructions for Form 1040-ES (NR) and Publication 505 for information on figuring your estimated tax. Efile state tax Amended estimated tax. Efile state tax   If, after you have made estimated tax payments, you find your estimated tax is substantially increased or decreased because of a change in your income or exemptions, you should adjust your remaining estimated tax payments. Efile state tax To do this, see the instructions for Form 1040-ES (NR) and Publication 505. Efile state tax Penalty for failure to pay estimated income tax. Efile state tax   You will be subject to a penalty for underpayment of installments of estimated tax except in certain situations. Efile state tax These situations are explained on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Efile state tax Prev  Up  Next   Home   More Online Publications