Line 18 1040NR
When reporting the federal income tax withheld from Form W-2 on line 18 of the 1040NR EZ form, does one only report the amount from box 2 (because that box is stated to be the Federal income tax withheld), or do you add the tax withheld on the social security and medicare as well.
>
> If not, where do you report the social security tax withheld and the medicare tax withheld.
>
> I am an athlete reporting less than 15,000.00 employment earnings exempt under a tax treaty with Canada, so even if I meet the substantial presence test, I understand I am still considered a nonresident alien for US tax purposes.
>
> It seems like such an elementary questions, but the guide does not mention what to do with those other two taxes.
>
> Thank you very much
>
> ________________________________________________________________________
david ingram replies:
If you were in the US for more than 183 days in 2006, you are likely NOT a non-resident.
Article XVI of the US CANADA Income Tax Convention (Treaty) is NOT intended to apply to anyone who is physically living in the US for more than 183 days.
On the other hand if you are saying that you meet the substantial presence test because you have been there long enough for the three year calculation to catch you, you are required to file form 8840 to claim your closer connection to another country and form 8833 to claim Treaty Benefits along with the 1040NR. Remember that the $15,000 includes expenses as well.
AND, the most important part is that the income you are exempting in the US is 100% taxable in Canada.
There is no place on a 1040EZ, 1040, or 1040NR for the deduction of Medicare or FICA (Social Security) payments. They are NOT a deduction or credit on a US return as CPP and EI are in Canada.
However, when you report the US income on lines 104 and 433 of your Canadian return, you can claim the Medicare and FICA you paid as a tax credit (usually dollar for dollar) on line 431 of schedule 1 of your Canadian return.
Hope this helps.
>
> If not, where do you report the social security tax withheld and the medicare tax withheld.
>
> I am an athlete reporting less than 15,000.00 employment earnings exempt under a tax treaty with Canada, so even if I meet the substantial presence test, I understand I am still considered a nonresident alien for US tax purposes.
>
> It seems like such an elementary questions, but the guide does not mention what to do with those other two taxes.
>
> Thank you very much
>
> ________________________________________________________________________
david ingram replies:
If you were in the US for more than 183 days in 2006, you are likely NOT a non-resident.
Article XVI of the US CANADA Income Tax Convention (Treaty) is NOT intended to apply to anyone who is physically living in the US for more than 183 days.
On the other hand if you are saying that you meet the substantial presence test because you have been there long enough for the three year calculation to catch you, you are required to file form 8840 to claim your closer connection to another country and form 8833 to claim Treaty Benefits along with the 1040NR. Remember that the $15,000 includes expenses as well.
AND, the most important part is that the income you are exempting in the US is 100% taxable in Canada.
There is no place on a 1040EZ, 1040, or 1040NR for the deduction of Medicare or FICA (Social Security) payments. They are NOT a deduction or credit on a US return as CPP and EI are in Canada.
However, when you report the US income on lines 104 and 433 of your Canadian return, you can claim the Medicare and FICA you paid as a tax credit (usually dollar for dollar) on line 431 of schedule 1 of your Canadian return.
Hope this helps.
What's Related