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Filing Taxes Student

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Filing Taxes Student

Filing taxes student 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. Filing taxes student Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U. Filing taxes student S. Filing taxes student income taxes on certain items of income they receive from sources within the United States. Filing taxes student These reduced rates and exemptions vary among countries and specific items of income. Filing taxes student 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. Filing taxes student Also see Publication 519. Filing taxes student Many of the individual states of the United States tax the income of their residents. Filing taxes student 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. Filing taxes student Tax treaties reduce the U. Filing taxes student S. Filing taxes student taxes of residents of foreign countries. Filing taxes student With certain exceptions, they do not reduce the U. Filing taxes student S. Filing taxes student taxes of U. Filing taxes student S. Filing taxes student citizens or residents. Filing taxes student U. Filing taxes student S. Filing taxes student citizens and residents are subject to U. Filing taxes student S. Filing taxes student income tax on their worldwide income. Filing taxes student Treaty provisions generally are reciprocal (apply to both treaty countries); therefore, a U. Filing taxes student S. Filing taxes student 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. Filing taxes student Foreign taxing authorities sometimes require certification from the U. Filing taxes student S. Filing taxes student Government that an applicant filed an income tax return as a U. Filing taxes student S. Filing taxes student citizen or resident, as part of the proof of entitlement to the treaty benefits. Filing taxes student See Form 8802, Application for United States Residency Certification, to request a certification. Filing taxes student Disclosure of a treaty-based position that reduces your tax. Filing taxes student   If you take the position that any U. Filing taxes student S. Filing taxes student tax is overruled or otherwise reduced by a U. Filing taxes student S. Filing taxes student treaty (a treaty-based position), you generally must disclose that position on Form 8833 and attach it to your return. Filing taxes student 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. Filing taxes student 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. Filing taxes student For more information, see Publication 519 and the Form 8833 instructions. Filing taxes student   If you fail to file Form 8833, you may have to pay a $1,000 penalty. Filing taxes student Corporations are subject to a $10,000 penalty for each failure. Filing taxes student 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. Filing taxes student Pay for certain personal services performed in the United States. Filing taxes student Pay of a professor, teacher, or researcher who teaches or performs research in the United States for a limited time. Filing taxes student Amounts received for maintenance and studies by a foreign student or apprentice who is here for study or experience. Filing taxes student Wages, salaries, and pensions paid by a foreign government. Filing taxes student Personal Services Income Pay for certain personal services performed in the United States is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student For this purpose, the word “day” means a day during any part of which you are physically present in the United States. Filing taxes student Terms defined. Filing taxes student   Several terms appear in many of the discussions that follow. Filing taxes student The exact meanings of the terms are determined by the particular tax treaty under discussion; thus, the meanings vary among treaties. Filing taxes student The definitions that follow are, therefore, general definitions that may not give the exact meaning intended by a particular treaty. Filing taxes student   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. Filing taxes student   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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Austria receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Bangladesh receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Bangladesh entertainers is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student If the ship or aircraft is operated by a U. Filing taxes student S. Filing taxes student enterprise, the income is subject to U. Filing taxes student S. Filing taxes student tax. Filing taxes student If the resident of Bangladesh is a shareholder in a U. Filing taxes student S. Filing taxes student corporation, these exemptions do not apply to directors' fees received as a member of the board of directors of the U. Filing taxes student S. Filing taxes student corporation. Filing taxes student 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. Filing taxes student S. Filing taxes student tax at the rate of 15%. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student S. Filing taxes student residents that is not more than $5,000 (there is no dollar limit if the contractors are not U. Filing taxes student S. Filing taxes student residents), and Do not have a regular base available in the United States for performing the services. Filing taxes student 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. Filing taxes student Income that residents of Barbados receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student tax if the residents meet four requirements. Filing taxes student They are in the United States for no more than 183 days during the calendar year. Filing taxes student The income earned in the calendar year in the United States is not more than $5,000. Filing taxes student Their income is paid by or for an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or regular base of the employer in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. Filing taxes student Income that residents of Belgium receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. Filing taxes student 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. Filing taxes student Income that residents of Bulgaria receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student company. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. Filing taxes student 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. Filing taxes student Income that residents of Canada receive for personal services performed as employees (dependent personal services) in the United States is exempt from U. Filing taxes student S. Filing taxes student tax if it is not more than $10,000 for the year. Filing taxes student 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. Filing taxes student S. Filing taxes student resident, and is not borne by a permanent establishment in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student S. Filing taxes student resident, and The pay is not borne by a permanent establishment or fixed base that the employer has in the United States. Filing taxes student These exemptions do not apply to directors' fees for service on the board of directors of a U. Filing taxes student S. Filing taxes student corporation. Filing taxes student 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). Filing taxes student However, income of athletes or public entertainers from China participating in a cultural exchange program agreed upon by the U. Filing taxes student S. Filing taxes student and Chinese governments is exempt from U. Filing taxes student S. Filing taxes student tax. Filing taxes student Commonwealth of Independent States Income that residents of a C. Filing taxes student I. Filing taxes student S. Filing taxes student member receive for performing personal services in the United States is exempt from U. Filing taxes student S. Filing taxes student income tax if those residents are in the United States for no more than 183 days during the tax year. Filing taxes student 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. Filing taxes student I. Filing taxes student S. Filing taxes student member or a resident of a C. Filing taxes student I. Filing taxes student S. Filing taxes student member is exempt from U. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available in the United States, they are taxable on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student Directors' fees received by residents of Cyprus for service on the board of directors of a U. Filing taxes student S. Filing taxes student corporation are exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on income attributable to the fixed base. Filing taxes student Income that residents of the Czech Republic receive for employment in the United States (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following three requirements are met. Filing taxes student The resident is present in the United States for no more than 183 days in any 12-month period. Filing taxes student The income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Czech entertainers and sportsmen is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student If the ship or aircraft is operated by a U. Filing taxes student S. Filing taxes student enterprise, the income is subject to U. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Denmark receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they are in the United States for no more than 89 days during the tax year. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet four requirements. Filing taxes student They are in the United States for no more than 89 days during the tax year. Filing taxes student They are employees of a resident of, or a permanent establishment in, Egypt. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student Their income is subject to Egyptian tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Estonia receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following requirements are met. Filing taxes student 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. Filing taxes student The income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Estonian entertainers or athletes is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are in the United States for no more than 183 days during any 12-month period. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student Their income is not borne by a permanent establishment, fixed base, or trade or business that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student Regardless of these limits, income of French entertainers or sportsmen is exempt from U. Filing taxes student S. Filing taxes student tax if their visit is principally supported by public funds of France. Filing taxes student 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. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. Filing taxes student 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. Filing taxes student S. Filing taxes student tax if the residents meet three requirements. Filing taxes student They are in the United States for no more than 183 days during the calendar year. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student Income of German entertainers or athletes is exempt from U. Filing taxes student S. Filing taxes student tax if their visit to the United States is substantially supported by public funds of Germany, its political subdivisions, or local authorities. Filing taxes student Greece Income that residents of Greece receive for labor or personal services (including practicing liberal and artistic professions) is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student The pay, regardless of amount, is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are in the United States for no more than 183 days during the tax year. Filing taxes student Their income is paid by or on behalf of an employer who is not a resident of the United States. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student If the ship or aircraft is operated by a U. Filing taxes student S. Filing taxes student enterprise, the pay is subject to U. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profit attributable to the permanent establishment. Filing taxes student Income that residents of Iceland receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student company. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on income attributable to the fixed base. Filing taxes student Income that residents of India receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are present in the United States for no more than 183 days during the tax year. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne by a permanent establishment, fixed base, or trade or business the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student enterprise. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student Regardless of this limit, the income of Indian entertainers and athletes is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on the income attributable to the fixed base. Filing taxes student Income that residents of Indonesia receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are present in the United States no more than 119 days during any consecutive 12-month period. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne or reimbursed by a permanent establishment the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax if the individual is a member of the regular complement of the ship or aircraft. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Indonesian entertainers and athletes is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Ireland receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student However, amounts received for attending meetings in Ireland are not subject to U. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they are in the United States for no more than 182 days during the tax year. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet four requirements. Filing taxes student They are in the United States for no more than 182 days during the tax year. Filing taxes student They are employees of a resident of, or a permanent establishment in, Israel. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student Their income is subject to Israeli tax. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the following requirements are met. Filing taxes student The residents are in the United States for no more than 183 days during the tax year. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student Pay received for employment regularly exercised aboard a ship or aircraft operated by a U. Filing taxes student S. Filing taxes student enterprise is subject to U. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student S. Filing taxes student contractor. Filing taxes student 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. Filing taxes student There is no dollar limit for condition (3) if the contractor is from a country other than the United States. Filing taxes student Income that residents of Jamaica receive for personal services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet four requirements. Filing taxes student They are in the United States for no more than 183 days during the tax year. Filing taxes student Their income is paid by or for an employer who is not a resident of the United States. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student Their net income received for the services is not more than $5,000 during the tax year. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student If the ship or aircraft is operated by a U. Filing taxes student S. Filing taxes student enterprise, the pay is subject to U. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student Directors' fees received by residents of Jamaica for services performed in the United States as members of boards of directors of U. Filing taxes student S. Filing taxes student corporations are exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. Filing taxes student Income that residents of Japan receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If the residents have a fixed base available, they are taxed only on the income attributable to the fixed base. Filing taxes student Income that residents of Kazakhstan receive for employment in the United States (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following three requirements are met. Filing taxes student The resident is in the United States for no more than 183 days in any 12-month period. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax if the residents meet four requirements. Filing taxes student They are in the United States for no more than 182 days during the tax year. Filing taxes student They are employees of a resident of Korea or of a permanent establishment maintained in Korea. Filing taxes student Their compensation is not borne by a permanent establishment that the employer has in the United States. Filing taxes student Their income for those services is not more than $3,000. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on the income attributable to the fixed base. Filing taxes student Income that residents of Latvia receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following requirements are met. Filing taxes student 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. Filing taxes student The income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student enterprise. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Latvian entertainers or athletes is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on the income attributable to the fixed base. Filing taxes student Income that residents of Lithuania receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following requirements are met. Filing taxes student 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. Filing taxes student The income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student enterprise. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student Regardless of these limits, income of Lithuanian entertainers or athletes is exempt from U. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if they do not have a fixed base regularly available to them in the United States for performing the services. Filing taxes student If they have a fixed base available in the United States, they are taxed on the income attributable to the fixed base. Filing taxes student Income that residents of Luxembourg receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment or a fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student enterprise. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student Under that provision, business profits are exempt from U. Filing taxes student S. Filing taxes student income tax unless the individual has a permanent establishment in the United States. Filing taxes student If they have a permanent establishment in the United States, they are taxed on the profits attributable to the permanent establishment. Filing taxes student Income that residents of Malta receive for services performed in the United States as employees (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the residents meet the following requirements. Filing taxes student They are in the United States for no more than 183 days in any 12-month period beginning or ending in the tax year. Filing taxes student Their income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student tax. Filing taxes student Income received by a resident of Malta for employment aboard a ship or an aircraft operated in international traffic is exempt from U. Filing taxes student S. Filing taxes student income tax if the individual is a member of the regular complement of the ship or aircraft. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student If they have a fixed base available, they are taxed only on income attributable to the fixed base. Filing taxes student Income that residents of Mexico receive for employment in the United States (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student tax if the following three requirements are met. Filing taxes student The resident is present in the United States for no more than 183 days in a 12-month period. Filing taxes student The income is paid by, or on behalf of, an employer who is not a resident of the United States. Filing taxes student The income is not borne by a permanent establishment or fixed base that the employer has in the United States. Filing taxes student 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. Filing taxes student S. Filing taxes student resident. Filing taxes student 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. Filing taxes student This includes income from activities performed in the United States relating to the entertainer or athlete's reputation, such as endorsements of commercial products. Filing taxes student Regardless of this limit, the income of Mexican entertainers and athletes is exempt from U. Filing taxes student S. Filing taxes student tax if their visit to the United States is substantially supported by public funds of Mexico, its political subdivisions, or local authorities. Filing taxes student 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. Filing taxes student S. Filing taxes student 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. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the residents meet three requirements. Filing taxes student They are in the United States for less than 183 days during the tax year. Filing taxes student 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. Filing taxes student Their income is not borne by a permanent establishment that the employer has in the United States. Filing taxes student Compensation received for services performed by a member of the board of directors of a corporation does not qualify for this exemption. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the individual is a member of the regular complement of the ship or aircraft. Filing taxes student 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. Filing taxes student 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. Filing taxes student S. Filing taxes student income tax if the income is not attributable to a fixed base in the United States that is regularly available for performing the services. Filing taxes student Income that residents of the Netherlands receive for employment in the United States (dependent personal services) is exempt from U. Filing taxes student S. Filing taxes student income tax if the following three requirements are met. Filing taxes student The resident is in the United States for no more than 183 days during the tax year. Filing taxes student The income is paid by, or on behalf of, an employer who is not a U. Filing taxes student S. Filing taxes student resident. Filing taxes student The income is not borne by a permanent establishment or fixed base the employer has in the United States. Filing taxes student Income received by a Netherlands resident for employment as a member of the regular complement of a ship or
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Anchorage, AK

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The Filing Taxes Student

Filing taxes student Internal Revenue Bulletin:  2013-7  February 11, 2013  Rev. Filing taxes student Proc. Filing taxes student 2013-16 Table of Contents SECTION 1. Filing taxes student PURPOSE SECTION 2. Filing taxes student BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE SECTION 3. Filing taxes student BACKGROUND—APPLICABLE PROVISIONS OF LAW SECTION 4. Filing taxes student FEDERAL INCOME TAX TREATMENT SECTION 5. Filing taxes student INFORMATION-REPORTING OBLIGATIONS SECTION 6. Filing taxes student HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA SECTION 7. Filing taxes student PENALTY RELIEF FOR 2012 SECTION 8. Filing taxes student SCOPE AND EFFECTIVE DATE SECTION 9. Filing taxes student DRAFTING INFORMATION SECTION 1. Filing taxes student PURPOSE This revenue procedure provides guidance to mortgage loan holders, loan servicers, and borrowers who are participating in the Department of the Treasury’s (Treasury) and Department of Housing and Urban Development’s (HUD) Home Affordable Modification Program® (HAMP®). Filing taxes student Under HAMP, a borrower may be eligible for principal reduction of the outstanding balance of a qualifying mortgage pursuant to the program’s Principal Reduction AlternativeSM (PRA). Filing taxes student In appropriate cases, HAMP has been offering the PRA as part of a HAMP loan modification since the last quarter of 2010. Filing taxes student Current plans call for HAMP to continue accepting new borrowers through the end of 2013. Filing taxes student The Internal Revenue Service (Service) is providing this guidance to address the tax consequences for borrowers (HAMP-PRA borrowers) who are participating in the PRA and the reporting obligations for participating mortgage loan holders and servicers. Filing taxes student SECTION 2. Filing taxes student BACKGROUND—HAMP AND THE HAMP PRINCIPAL REDUCTION ALTERNATIVE . Filing taxes student 01 To help distressed borrowers lower their monthly mortgage payments, Treasury and HUD established HAMP for mortgage loans that are not owned or guaranteed by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). Filing taxes student A description of the program can be found at www. Filing taxes student makinghomeaffordable. Filing taxes student gov. Filing taxes student . Filing taxes student 02 Under HAMP, a participating loan servicer, acting on behalf of the mortgage loan holder, must consider a sequence of modification steps for each eligible borrower’s mortgage loan until the borrower’s monthly payment is reduced to a monthly payment amount determined under the HAMP guidelines. Filing taxes student These steps include a reduction in the mortgage loan’s interest rate, an extension of the mortgage loan’s term, and a reduction in the mortgage loan’s principal balance. Filing taxes student . Filing taxes student 03 In some cases, the unpaid principal balance of the modified mortgage loan is divided into (1) an amount that bears stated interest and that is used to calculate the borrower’s new monthly mortgage payment (the “Non-forbearance Portion”), and (2) a forbearance amount, which does not bear stated interest and on which periodic payments of stated principal are not required. Filing taxes student The stated principal of the forbearance amount is due upon the earliest of the borrower’s transfer of the property, payoff of the balance on the Non-forbearance Portion of the mortgage loan, or maturity of the mortgage loan. Filing taxes student However, as noted in section 2. Filing taxes student 06 of this revenue procedure, a HAMP-PRA borrower sometimes may not have to pay all or a portion of the forbearance amount. Filing taxes student (The forbearance amount associated with a HAMP-PRA principal reduction is called the “PRA Forbearance Amount. Filing taxes student ”) . Filing taxes student 04 If a mortgage loan is being considered for a HAMP modification and the amount owed on the mortgage loan is greater than 115 percent of the value of the property, then the servicer must consider whether principal reduction under PRA should be used as part of the HAMP modification. Filing taxes student . Filing taxes student 05 The first step toward a HAMP modification is a trial period plan, in which the borrower’s monthly mortgage payment is set at a monthly payment amount determined under the HAMP guidelines. Filing taxes student The trial period plan effective date is the due date for the first of the reduced payments that are to be made under the trial period plan. Filing taxes student (It is the first day of either the first or the second month after the servicer transmits the trial period notice to the borrower. Filing taxes student ) In general, the trial period is three months, and, during this period, the borrower must satisfy certain conditions before the changes to the terms of the mortgage loan become permanent (the “Trial Period Conditions”). Filing taxes student Specifically, depending on the borrower’s trial period payment history, the borrower’s compliance with HAMP and servicer guidelines, and his or her satisfaction of all other Trial Period Conditions, the borrower will be offered a permanent modification of the terms of the mortgage loan, including monthly mortgage payments that are lower than those under the old mortgage loan. Filing taxes student Until the effective date of a permanent modification, the terms of the existing mortgage loan continue to apply. Filing taxes student . Filing taxes student 06 After the mortgage loan is permanently modified under HAMP, if the modified mortgage loan is in good standing on the first, second, or third annual anniversary of the trial period plan effective date (the “Three-year Period”), the servicer must reduce the unpaid principal balance of the mortgage loan on the respective anniversary date by one-third of the initial PRA Forbearance Amount. Filing taxes student (The servicer allocates the entire reduction to the remaining PRA Forbearance Amount. Filing taxes student ) In general, if a HAMP-PRA borrower’s mortgage loan is in good standing and if the HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan prior to the reduction of the entire PRA Forbearance Amount, the servicer must reduce the remaining outstanding principal balance of the mortgage loan by the remaining PRA Forbearance Amount. Filing taxes student . Filing taxes student 07 In connection with every HAMP loan modification, the HAMP program administrator (acting on behalf of the federal government) provides incentives to the borrower, the servicer, and the investor (that is, the holder of the mortgage loan). Filing taxes student If a HAMP loan modification includes a PRA principal reduction, the HAMP program administrator makes additional incentive payments to the investor. Filing taxes student These additional incentives are called “PRA Investor Incentive Payments” and are generally spread over three years. Filing taxes student The size of the PRA Investor Incentive Payments depends on the amount of principal reduced, the loan-to-value ratio at the time of the HAMP modification, and the loan’s payment history before the modification. Filing taxes student The PRA Investor Incentive Payments range from 18 to 63 percent of the principal amounts reduced. Filing taxes student For purposes of this revenue procedure, the excess of the initial PRA Forbearance Amount of a mortgage loan over the aggregate PRA Investor Incentive Payments scheduled to be paid with respect to that loan is called the “PRA Adjusted Forbearance Amount. Filing taxes student ” . Filing taxes student 08 A PRA Investor Incentive Payment is earned by the investor on each date on which the servicer reduces the unpaid principal balance of the mortgage loan by a portion of the PRA Forbearance Amount (generally, on the first three annual anniversaries of the trial period plan effective date). Filing taxes student . Filing taxes student 09 If a HAMP-PRA borrower’s early payment in full of the Non-forbearance Portion of the mortgage loan accelerates the reduction of the remaining PRA Forbearance Amount (described above in section 2. Filing taxes student 06 of this revenue procedure), the remaining PRA Investor Incentive Payments from the HAMP program administrator are also accelerated. Filing taxes student . Filing taxes student 10 If, prior to completion of the Three-year Period, a mortgage loan ceases to be in good standing because of the HAMP-PRA borrower’s payment history, then the remaining PRA Forbearance Amount is not further reduced and is due when the HAMP-PRA borrower transfers the property, the HAMP-PRA borrower refinances, or otherwise pays off the Non-forbearance Portion of the mortgage loan, or the mortgage loan matures. Filing taxes student SECTION 3. Filing taxes student BACKGROUND—APPLICABLE PROVISIONS OF LAW . Filing taxes student 01 Under § 61 of the Internal Revenue Code, except as otherwise provided in subtitle A, gross income means all income from whatever source derived, including income from discharge of indebtedness. Filing taxes student See § 61(a)(12). Filing taxes student . Filing taxes student 02 Under § 1. Filing taxes student 1001-3 of the Income Tax Regulations, if a debt instrument undergoes a significant modification, then the modification results in an exchange of the original debt instrument for the modified debt instrument. Filing taxes student In general, an agreement to change a term of a debt instrument is a modification at the time the borrower and holder enter into the agreement, even if the change in term is not immediately effective. Filing taxes student However, if the change is conditioned on reasonable closing conditions, a modification occurs on the closing date of the agreement. Filing taxes student See § 1. Filing taxes student 1001-3(c)(6). Filing taxes student . Filing taxes student 03 Under § 108(e)(10), in the case of a debt-for-debt exchange (including a deemed exchange under § 1. Filing taxes student 1001-3), the borrower is treated as having satisfied the original debt instrument with an amount of money equal to the issue price of the new debt instrument. Filing taxes student If the amount of debt satisfied in this manner exceeds that issue price, the borrower realizes discharge of indebtedness income on the exchange. Filing taxes student See also § 1. Filing taxes student 61-12(c). Filing taxes student . Filing taxes student 04 The issue price of a non-publicly traded debt instrument issued for non-publicly traded property generally reflects the amount of principal that the borrower is required to pay to the holder of the instrument. Filing taxes student If a borrower has the ability to avoid paying certain amounts (including principal) without violating the terms of the instrument, the payment schedule for the instrument is generally determined based on an assumption that the borrower will avoid any requirement to make those payments. Filing taxes student See, e. Filing taxes student g. Filing taxes student , §§ 1. Filing taxes student 1272-1(c)(5) and 1. Filing taxes student 1274-2(d). Filing taxes student . Filing taxes student 05 Under § 108(a), gross income does not include any amount that but for § 108(a) would be includible in gross income by reason of the discharge (in whole or in part) of a taxpayer’s indebtedness if (1) the indebtedness discharged is qualified principal residence indebtedness that is discharged before January 1, 2014, or (2) the discharge occurs when the taxpayer is insolvent. Filing taxes student Section 108(a)(1)(E) and 108(a)(1)(B). Filing taxes student (Although § 108 contains other exclusions as well, this revenue procedure focuses on these two exclusions because they are the most likely to apply to the greatest number of HAMP-PRA borrowers. Filing taxes student ) . Filing taxes student 06 Under §§ 108(h) and 163(h)(3)(B), qualified principal residence indebtedness is any indebtedness that is incurred by a borrower to buy, build, or substantially improve the borrower’s principal residence and is secured by that residence. Filing taxes student . Filing taxes student 07 Qualified principal residence indebtedness also includes a loan secured by the borrower’s principal residence that refinances qualified principal residence indebtedness, but only to the extent of the amount of the refinanced indebtedness. Filing taxes student See §§ 108(h) and 163(h)(3)(B)(i). Filing taxes student . Filing taxes student 08 The maximum amount of discharged indebtedness that a borrower may exclude from gross income under the qualified principal residence indebtedness exclusion is $2,000,000 ($1,000,000 for a married individual filing a separate return). Filing taxes student Under § 108(h)(4), if only part of the discharged indebtedness is qualified principal residence indebtedness, then the exclusion applies only to the amount of the discharged indebtedness that exceeds the amount of the loan (determined immediately before the discharge) that is not qualified principal residence indebtedness. Filing taxes student . Filing taxes student 09 Under § 108(a)(3), the insolvency exclusion applies to the lesser of the amount of the debt discharged or the amount by which the taxpayer is insolvent immediately before the discharge. Filing taxes student . Filing taxes student 10 Section 108(d)(3) provides that, for purposes of the insolvency exclusion, a taxpayer is insolvent to the extent that the taxpayer’s total liabilities exceed the fair market value of all of the taxpayer’s assets immediately before the discharge of indebtedness. Filing taxes student Under § 108(a)(2)(C), the qualified principal residence indebtedness exclusion takes precedence over the insolvency exclusion when both exclusions apply to discharged indebtedness, unless the taxpayer elects to apply the insolvency exclusion. Filing taxes student . Filing taxes student 11 If an amount is excluded from gross income as a discharge of qualified principal residence indebtedness, the taxpayer must reduce the basis of the taxpayer’s principal residence. Filing taxes student See § 108(h)(1). Filing taxes student If a discharged amount is excluded from gross income because the taxpayer was insolvent when the discharge occurred, the taxpayer must reduce certain tax attributes (possibly including basis). Filing taxes student See § 108(b). Filing taxes student For further discussion of income from the discharge of indebtedness, the qualified principal residence indebtedness exclusion, the insolvency exclusion, and other exclusions from gross income that may apply, see Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals). Filing taxes student . Filing taxes student 12 Taxpayers who exclude any discharged amounts from gross income report both the exclusion and the resulting reduction in basis or other tax attributes on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Filing taxes student See Form 982 instructions and Publication 4681. Filing taxes student This form is to be filed with the tax return for the taxable year in which the amount is discharged but is excluded from gross income. Filing taxes student . Filing taxes student 13 Governmental payments made to or on behalf of individuals or other persons are included within the broad definition of gross income under § 61 unless an exception applies. Filing taxes student See Notice 2003-18, 2003-1 C. Filing taxes student B. Filing taxes student 699, and Rev. Filing taxes student Rul. Filing taxes student 79-356, 1979-2 C. Filing taxes student B. Filing taxes student 28. Filing taxes student However, if disbursements are made by a governmental unit to individuals in the interest of the general welfare (that is, are generally based on individual or family need) and the disbursements do not represent compensation for services, then the amounts disbursed are excluded from the income of the recipient (general welfare exclusion). Filing taxes student See Rev. Filing taxes student Rul. Filing taxes student 2005-46, 2005-2 C. Filing taxes student B. Filing taxes student 120, and Rev. Filing taxes student Rul. Filing taxes student 75-246, 1975-1 C. Filing taxes student B. Filing taxes student 24. Filing taxes student . Filing taxes student 14 Under § 451 and § 1. Filing taxes student 451-1(a), a taxpayer that uses the cash receipts and disbursements method of accounting includes income in gross income when the taxpayer actually or constructively receives the income. Filing taxes student . Filing taxes student 15 Section 6041 requires every person engaged in a trade or business (including the United States and its agencies) to (1) file an information return (Form 1099-MISC, Miscellaneous Income, is used for this purpose) for each calendar year in which the person makes, in the course of its trade or business, payments to another person of fixed or determinable income aggregating $600 or more, and (2) furnish a copy of the information return to that other person. Filing taxes student See § 6041(a) and (d) and § 1. Filing taxes student 6041-1(a)(1) and (b). Filing taxes student . Filing taxes student 16 Section 6050P requires applicable entities (including the United States and its agencies, financial entities, and any organization a significant trade or business of which is the lending of money) to (1) file an information return (Form 1099-C, Cancellation of Debt, is used for this purpose) for each calendar year in which it discharges indebtedness of another person of $600 or more, and (2) furnish a copy of the information return to that other person. Filing taxes student See § 6050P(a)-(c) and §§ 1. Filing taxes student 6050P-1(a) and 1. Filing taxes student 6050P-2(a) and (d). Filing taxes student . Filing taxes student 17 Section 6721 imposes penalties with respect to information returns required to be filed with the Service. Filing taxes student These penalties apply in the case of a failure to timely file an information return, a failure to include all required information on the return, or the inclusion of incorrect information on the return. Filing taxes student Section 6724(d)(1) includes Forms 1099-MISC and 1099-C in the term “information return. Filing taxes student ” . Filing taxes student 18 Section 6722 imposes penalties with respect to payee statements required to be furnished to payees. Filing taxes student These penalties apply in the case of a failure to timely furnish a payee statement, a failure to include all required information on the statement, or the inclusion of incorrect information on the payee statement. Filing taxes student Section 6724(d)(2) includes in the term “payee statement” copies of Forms 1099-MISC and 1099-C that are required to be furnished to taxpayers. Filing taxes student SECTION 4. Filing taxes student FEDERAL INCOME TAX TREATMENT . Filing taxes student 01 Because a HAMP modification with a PRA principal reduction is a significant modification, it results in a deemed debt-for-debt exchange in which the HAMP-PRA borrower satisfies the old mortgage loan by issuing a new one. Filing taxes student See § 1. Filing taxes student 1001-3. Filing taxes student At the time of the modification, therefore, under § 108 and this revenue procedure, the HAMP-PRA borrower realizes discharge of indebtedness income equal to any excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new (post-modification) mortgage loan. Filing taxes student See also § 61(a)(12) and § 1. Filing taxes student 61-12(c). Filing taxes student . Filing taxes student 02 A HAMP-PRA borrower has the ability to avoid payment of the PRA Adjusted Forbearance Amount. Filing taxes student Because the HAMP-PRA borrower has this ability, that amount should not be taken into account in determining the issue price of the new mortgage loan. Filing taxes student Because the issue price of the new mortgage loan does not include the PRA Adjusted Forbearance Amount, the PRA Adjusted Forbearance Amount contributes to the excess of the adjusted issue price of the old mortgage loan (which was satisfied in the deemed exchange) over the issue price of the new mortgage loan. Filing taxes student . Filing taxes student 03 On the other hand, the investor has not given up its right to receive the remainder of the PRA Forbearance Amount, because the HAMP program administrator is expected to make those payments on the HAMP-PRA borrower’s behalf by making the PRA Investor Incentive Payments. Filing taxes student Because the remainder of the PRA Forbearance Amount is payable in this manner, that remainder is included in the issue price of the new mortgage loan. Filing taxes student . Filing taxes student 04 The Trial Period Conditions are reasonable closing conditions that must be satisfied before the changes to the terms of the mortgage loan become permanent. Filing taxes student Therefore, for purposes of § 1. Filing taxes student 1001-3, the date of the modification is the date of the permanent modification. Filing taxes student . Filing taxes student 05 Unless an exclusion applies, the HAMP-PRA borrower includes in gross income the discharge of indebtedness income described in section 4. Filing taxes student 01 of this revenue procedure for the taxable year in which the permanent modification occurs. Filing taxes student Under certain conditions, however, section 6 of this revenue procedure permits a borrower to report the discharge of indebtedness under HAMP-PRA over the Three-year Period. Filing taxes student The qualified principal residence indebtedness exclusion under § 108(a)(1)(E) and the insolvency exclusion under § 108(a)(1)(B) are two exclusions that may apply to the discharge. Filing taxes student . Filing taxes student 06 The PRA Investor Incentive Payment is treated as a payment on the mortgage loan by the HAMP program administrator on behalf of the HAMP-PRA borrower. Filing taxes student . Filing taxes student 07 To the extent that the HAMP-PRA borrower uses the property as the HAMP-PRA borrower’s principal residence or the property is occupied by the HAMP-PRA borrower’s legal dependent, parent, or grandparent without rent being charged or collected, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the PRA Investor Incentive Payments that the HAMP program administrator makes to the investor in the mortgage loan. Filing taxes student This is consistent with Rev. Filing taxes student Rul. Filing taxes student 2009-19, 2009-28 I. Filing taxes student R. Filing taxes student B. Filing taxes student 111, which addressed the treatment of Pay-for-Performance Success Payments. Filing taxes student . Filing taxes student 08 To the extent that the HAMP-PRA borrower uses the property as a rental property or holds the property vacant and available for rent, the HAMP-PRA borrower includes PRA Investor Incentive Payments in gross income. Filing taxes student If the HAMP-PRA borrower uses the cash receipts and disbursements method of accounting, then the HAMP-PRA borrower includes a PRA Investor Incentive Payment in gross income in the taxable year in which it is applied as a payment on the HAMP-PRA borrower’s mortgage loan. Filing taxes student . Filing taxes student 09 As described in section 2. Filing taxes student 09 of this revenue procedure, if a HAMP-PRA borrower pays in full the Non-forbearance Portion of the mortgage loan while the loan is in good standing and prior to completion of the Three-year Period, that payment accelerates both the reduction in the remaining PRA Forbearance Amount and the PRA Investor Incentive Payments from the HAMP program administrator. Filing taxes student To the extent that the HAMP-PRA borrower is described in section 4. Filing taxes student 07 of this revenue procedure, the HAMP-PRA borrower excludes from his or her gross income under the general welfare exclusion the accelerated PRA Investor Incentive Payments. Filing taxes student To the extent that the HAMP-PRA borrower is described in section 4. Filing taxes student 08 of this revenue procedure, the HAMP-PRA borrower includes in income in the year of the acceleration the remaining amount of the PRA Investor Incentive Payment. Filing taxes student SECTION 5. Filing taxes student INFORMATION-REPORTING OBLIGATIONS . Filing taxes student 01 Under § 6050P, the investor is required to file a Form 1099-C with respect to a borrower who realizes discharge of indebtedness of $600 or more. Filing taxes student A copy of this form is required to be furnished to the borrower. Filing taxes student . Filing taxes student 02 As stated in sections 4. Filing taxes student 01 and 4. Filing taxes student 04 of this revenue procedure, the HAMP-PRA discharge of indebtedness is realized at the time of the permanent modification of the mortgage loan. Filing taxes student . Filing taxes student 03 An investor is an applicable entity that is required under § 1. Filing taxes student 6050P-1 and this revenue procedure to issue a Form 1099-C for discharge of indebtedness. Filing taxes student Under § 1. Filing taxes student 6050P-1(b)(2)(F), the permanent modification of a mortgage loan is an identifiable event. Filing taxes student Identifiable events determine when Forms 1099-C have to be issued. Filing taxes student Thus, the Form 1099-C is issued for the calendar year in which the permanent mortgage loan modification occurs. Filing taxes student This rule under § 1. Filing taxes student 6050P-1(b)(2)(F) applies even if, under section 6 of this revenue procedure, the HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the times when the unpaid principal balance of the new mortgage loan is reduced. Filing taxes student . Filing taxes student 04 The investor (or the loan servicer acting on behalf of the investor) reports the full amount of the discharge on the Form 1099-C regardless of whether some or all of the amount is excludible from income under the qualified principal residence indebtedness exclusion, the insolvency exclusion, or any other exclusion that may apply. Filing taxes student That discharged amount will generally be the PRA Adjusted Forbearance Amount (which does not include the amounts expected to be satisfied by PRA Investor Incentive Payments). Filing taxes student . Filing taxes student 05 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Filing taxes student 07 of this revenue procedure, the PRA Investor Incentive Payments are excluded from the gross income of the HAMP-PRA borrower, and thus they are not fixed or determinable income to the HAMP-PRA borrower. Filing taxes student Under § 6041, these payments are not subject to information reporting. Filing taxes student See Notice 2011-14, 2011-11 I. Filing taxes student R. Filing taxes student B. Filing taxes student 544, 546. Filing taxes student . Filing taxes student 06 To the extent that PRA Investor Incentive Payments are made on behalf of a HAMP-PRA borrower who is described in section 4. Filing taxes student 08 of this revenue procedure, the PRA Investor Incentive Payments are includible in gross income as fixed or determinable income in the taxable year required by the HAMP-PRA borrower’s method of accounting. Filing taxes student The payment is subject to the information reporting requirements of § 6041, as described in section 3. Filing taxes student 15 of this revenue procedure. Filing taxes student Accordingly, the HAMP program administrator is required to issue a Form 1099-MISC reporting the PRA Investor Incentive Payment. Filing taxes student SECTION 6. Filing taxes student HAMP-PRA BORROWERS’ REPORTING OF DISCHARGES OF INDEBTEDNESS UNDER HAMP-PRA . Filing taxes student 01 In general. Filing taxes student The HAMP-PRA program began in the last quarter of 2010, and since that time there has been uncertainty about whether the amount of the discharge of indebtedness should be reported in the year of the permanent modification or over the Three-year Period (when the unpaid principal balance on the new mortgage loan is reduced). Filing taxes student As a result, some HAMP-PRA borrowers have been reporting the discharge of indebtedness under HAMP-PRA over the Three-year Period. Filing taxes student Given the temporary nature of the program and the issuance of this guidance after participation in the program has begun, in the interests of equitable and sound tax administration, HAMP-PRA borrowers may report discharges of indebtedness under HAMP-PRA under the rules in this section 6. Filing taxes student A HAMP-PRA borrower may choose to report discharges of indebtedness under HAMP-PRA pursuant to the rules in this section 6 only if the borrower applies the same borrower option under section 6. Filing taxes student 02 of this revenue procedure consistently to the taxable year of the permanent modification and to all subsequent taxable years. Filing taxes student Thus, a HAMP-PRA borrower may not choose a borrower option under section 6. Filing taxes student 02 of this revenue procedure if a statute of limitations has expired for any of the taxable years that are necessary for consistent application of that option. Filing taxes student . Filing taxes student 02 HAMP-PRA borrower options. Filing taxes student A HAMP-PRA borrower may treat the HAMP-PRA discharge as being realized in either of the following ways— (1) One hundred percent of the PRA Adjusted Forbearance Amount at the time of the permanent modification; or (2) One third of the PRA Adjusted Forbearance Amount on each of the first three annual anniversaries of the trial period plan effective date (described in section 2. Filing taxes student 06 of this revenue procedure), when, as required by the terms of the new mortgage loan, the servicer reduces the unpaid principal balance of the new mortgage loan. Filing taxes student If some or all of the reduction in the unpaid principal balance is accelerated (as described in section 2. Filing taxes student 06 of this revenue procedure) because the HAMP-PRA borrower prepays the Non-forbearance Portion of the mortgage loan, then the HAMP-PRA discharge represented by the amount of the reduction that was accelerated is treated as being realized at the time of the accelerated reduction. Filing taxes student . Filing taxes student 03 HAMP-PRA borrowers who choose to realize the HAMP-PRA discharge at the time of the permanent modification. Filing taxes student (1) If a HAMP-PRA borrower chooses to treat the HAMP-PRA discharge as being realized at the time of the permanent modification, then for the taxable year in which the permanent modification occurs, the HAMP-PRA borrower reports on Form 982 the amount, if any, of the discharge that is excluded from gross income and includes in gross income any remaining discharge. Filing taxes student (2) If a HAMP-PRA borrower’s mortgage loan was permanently modified under HAMP in 2010 or 2011, and if the borrower was reporting the discharge of indebtedness using the method described in section 6. Filing taxes student 02(2) of this revenue procedure, then the borrower may change to reporting the discharge of indebtedness using the method described in section 6. Filing taxes student 02(1) of this revenue procedure by filing a 2012 Form 982 with the borrower’s timely filed (with extensions) 2012 income tax return. Filing taxes student This section 6. Filing taxes student 03(2) applies only if the change to reporting the discharge using the method described in section 6. Filing taxes student 02(1) of this revenue procedure does not change the borrower’s federal income tax liability (including any change in federal income tax liability due to a change in basis or tax attributes (under § 108(h)(1) or § 108(b))) for any taxable year prior to the borrower’s 2012 taxable year. Filing taxes student To make this change, the borrower must— (i) Compute the amount of discharge of indebtedness that would be included in income under § 61(a)(12) or excluded from gross income under § 108, basing the computation of the discharge on the facts as of the year of the permanent modification; and (ii) Report on a 2012 Form 982 the reduction in basis or tax attributes (under § 108(h)(1) or § 108(b)) due to the permanent modification that the borrower would have reported on the Form 982 for the taxable year of the permanent modification, minus any reductions due to the permanent modification that the borrower actually reported on Forms 982 for taxable years prior to 2012. Filing taxes student (3) Example. Filing taxes student The following example illustrates the application of section 6. Filing taxes student 03(2) of this revenue procedure. Filing taxes student In 2010, B’s basis in B’s principal residence was $330,000. Filing taxes student In 2010, B’s mortgage loan on the principal residence is permanently modified under HAMP-PRA. Filing taxes student B realized $30,000 of cancellation of indebtedness from the permanent modification, all of which qualifies for the exclusion from income for qualified principal residence indebtedness under § 108(a)(1)(E). Filing taxes student The trial period plan effective date also fell in 2010. Filing taxes student B’s federal income tax return for 2010 was consistent with B’s reporting this discharge of indebtedness using the method described in section 6. Filing taxes student 02(2) of this revenue procedure. Filing taxes student That is, B’s 2010 return did not include income from discharge of indebtedness under HAMP-PRA, nor did the return contain a Form 982 reporting exclusion of any such discharge of indebtedness. Filing taxes student The next year, B reported on line 10(b) of the 2011 Form 982 that B filed with B’s 2011 federal income tax return a $10,000 reduction in basis in the principal residence. Filing taxes student For 2012, B chooses to change to reporting the discharge of indebtedness using the method described in section 6. Filing taxes student 02(1) of this revenue procedure. Filing taxes student Thus, B files a 2012 Form 982 with B’s timely filed (including extensions) 2012 federal income tax return, and on line 10(b) of that form, B reports a $20,000 basis reduction in the principal residence ($30,000 basis reduction that B would have excluded from income in 2010 using the method described in section 6. Filing taxes student 02(1) of this revenue procedure, minus the $10,000 basis reduction that B reported on B’s 2011 Form 982). Filing taxes student (4) If a HAMP-PRA borrower reports the entire HAMP-PRA discharge using the method described in section 6. Filing taxes student 02(1) of this revenue procedure, and if that HAMP-PRA borrower’s mortgage loan ceases to be in good standing during the Three-year Period as described in section 2. Filing taxes student 10 of this revenue procedure, then some or all of the anticipated reductions in the PRA Adjusted Forbearance Amount will not take place. Filing taxes student Because the amount of these anticipated reductions was not included in determining the issue price of the new mortgage loan that, pursuant to § 1. Filing taxes student 1001-3, the HAMP-PRA borrower is deemed to issue in satisfaction of the old mortgage loan, the issue price of the new mortgage loan was understated. Filing taxes student Under these circumstances, the discharge of indebtedness income determined as of the date of the permanent modification will have been overstated. Filing taxes student (5) The Service will not challenge a HAMP-PRA borrower who is described in section 6. Filing taxes student 03(4) of this revenue procedure and who takes the following corrective measures: (i) If a HAMP-PRA borrower included any of the discharge of indebtedness in gross income, the HAMP-PRA borrower may file an amended return that does not include the amount of the discharge of indebtedness that was previously reported as gross income but that, because of the HAMP-PRA borrower’s failure to keep the new mortgage loan in good standing, was not ultimately discharged. Filing taxes student The amended return should be for the taxable year in which the income was included (that is, the year of the permanent modification), provided the applicable statute of limitations remains open for that taxable year. Filing taxes student (ii) If the HAMP-PRA borrower did not include any of the discharge of indebtedness in gross income (that is, if the HAMP-PRA borrower excluded all of it), the HAMP-PRA borrower may file a new Form 982 that the Service will treat as superseding the earlier Form 982. Filing taxes student The new Form 982 will reflect the revised reduction in basis or in tax attributes (under § 108(h)(1) or § 108(b)). Filing taxes student The new Form 982 should be the Form 982 for the year of the permanent modification and should be filed with the return for the taxable year in which the HAMP-PRA borrower’s mortgage loan ceased to be in good standing. Filing taxes student . Filing taxes student 04 HAMP-PRA borrowers who choose to treat the HAMP-PRA discharge as being realized on the dates on which the unpaid principal balance of the mortgage loan is reduced. Filing taxes student (1) If a HAMP-PRA borrower chooses to realize the HAMP-PRA discharge at the times that the unpaid principal balance on the new mortgage loan is reduced, instead of at the time of the permanent modification, then the HAMP-PRA borrower’s federal income tax returns for the taxable year that contains the permanent modification and for the subsequent taxable years must not treat any of the discharge as being realized at the time of the permanent modification and must treat the entire HAMP-PRA discharge as being realized in the amounts—and at the times—of the reductions in the unpaid principal balance. Filing taxes student Except as described in the last sentence of this paragraph, therefore, the income tax return for the year of the permanent modification must include no gross income from—nor report on Form 982 an exclusion of—any amount of the HAMP-PRA discharge. Filing taxes student Instead, the HAMP-PRA discharge is included in gross income (or is reported on Form 982 as excluded from gross income) in the subsequent years in which the unpaid principal balance is reduced. Filing taxes student If the first such reduction occurs in the year of the permanent modification, however, then the amount of any such reduction is reflected as an inclusion or exclusion on the federal income tax return for that year. Filing taxes student (2) A HAMP-PRA borrower who has been using the method described in section 6. Filing taxes student 02(1) of this revenue procedure may change to the method described in section 6. Filing taxes student 02(2) but must comply with the consistency and open-year requirements described in section 6. Filing taxes student 01 of this revenue procedure. Filing taxes student SECTION 7. Filing taxes student PENALTY RELIEF FOR 2012 . Filing taxes student 01 The Service will not assert penalties under § 6721 or § 6722 against an investor for failing to timely file and furnish a 2012 Form 1099-C as required by section 5. Filing taxes student 03 through 5. Filing taxes student 04 and section 8. Filing taxes student 02 of this revenue procedure with respect to discharge of indebtedness resulting from HAMP-PRA permanent modifications that take place during calendar year 2012 if the following requirements are satisfied: (1) Not later than February 28, 2013, a statement is sent to the HAMP-PRA borrower containing the following: (a) The HAMP-PRA borrower’s name, address, and taxpayer identification number; and (b) The date and amount of the discharge of indebtedness (as described in sections 4. Filing taxes student 01 through 4. Filing taxes student 04 of this revenue procedure) that is required to be reported for 2012. Filing taxes student (2) Not later than March 28, 2013, a statement is sent to the Service. Filing taxes student It must be in the form of a single statement that separately lists for each HAMP-PRA borrower the information specified in section 7. Filing taxes student 01(1) of this revenue procedure. Filing taxes student The statement should be sent to the Service at the following address: Internal Revenue Service Center Stop 6728AUSC Austin, TX 73301 . Filing taxes student 02 The Service will not assert penalties under § 6721 or § 6722 with respect to any Forms 1099-MISC for 2012 that sections 5. Filing taxes student 06 and 8. Filing taxes student 02 of this revenue procedure require to be filed with the Service and furnished to taxpayers. Filing taxes student . Filing taxes student 03 Section 8. Filing taxes student 03 and 8. Filing taxes student 04 of this revenue procedure, below, describes penalty relief regarding Forms 1099-C and 1099-MISC for 2010 and 2011. Filing taxes student SECTION 8. Filing taxes student SCOPE AND EFFECTIVE DATE . Filing taxes student 01 This revenue procedure applies to all borrowers, investors, and servicers who participate, or have participated, in the HAMP-PRA, regardless of when the permanent modification occurs. Filing taxes student . Filing taxes student 02 Section 5 of this revenue procedure is effective for Forms 1099-C and 1099-MISC due or filed after January 24, 2013. Filing taxes student . Filing taxes student 03 Because of the effective date in section 8. Filing taxes student 02 of this revenue procedure, an investor is not subject to penalties under § 6721 or § 6722 on the grounds that the investor failed to timely file and furnish a 2010 or 2011 Form 1099-C as described in section 5. Filing taxes student 03 through 5. Filing taxes student 04 of this revenue procedure (or on the grounds that the investor filed or furnished a 2010 or 2011 Form 1099-C that is inconsistent with section 5. Filing taxes student 03 through 5. Filing taxes student 04 of this revenue procedure), provided that the investor demonstrates a good faith attempt to comply with the requirements of § 6050P and that the failure was not due to willful neglect. Filing taxes student . Filing taxes student 04 Because of the effective date in section 8. Filing taxes student 02 of this revenue procedure, the Service will not assert penalties under § 6721 or § 6722 on the grounds of a failure to timely file and furnish a 2010 or 2011 Form 1099-MISC, as described in section 5. Filing taxes student 06 of this revenue procedure. Filing taxes student SECTION 9. Filing taxes student DRAFTING INFORMATION The principal authors of this revenue procedure are Ronald J. Filing taxes student Goldstein of the Office of Chief Counsel (Procedure and Administration); Shareen S. Filing taxes student Pflanz and Sheldon A. Filing taxes student Iskow of the Office of Chief Counsel (Income Tax and Accounting); and Andrea M. Filing taxes student Hoffenson of the Office of Chief Counsel (Financial Institutions and Products). Filing taxes student For further information regarding this revenue procedure, contact Procedure and Administration branch 1 at (202) 622-4910, Income Tax and Accounting branch 4 at (202) 622-4920, or Financial Institutions and Products branch 1 at (202) 622-3920 (not toll-free calls). Filing taxes student Prev  Up  Next   Home   More Internal Revenue Bulletins