Specific Instructions

Joint return.   Nonresident aliens cannot file a joint return. Resident aliens can file a joint return on Form 1040-C only if both of the following apply.
  1. The alien and his or her spouse reasonably expect to be eligible to file a joint return at the close of the tax period for which the return is made.

  2. If the tax period of the alien is terminated, the tax period of his or her spouse is terminated at the same time.

  If Form 1040-C is filed as a joint return, enter both spouses' names, identification numbers, and passport or alien registration card numbers in the spaces provided on page 1 of the form. Also, include both spouses' income in Part III and furnish both spouses' information in Part I of the form. It may be necessary to complete a separate Part I for each spouse.

Identifying number.   You must enter your identifying number. Generally, this is your social security number (SSN).

  If you do not have an SSN, contact the Social Security Administration (SSA) to find out if you are eligible for one. You may call the SSA at 1-800-772-1213 or visit their web site.

   You can also find out if you are eligible for one and the documents you need for an SSN from the SSA's website at www.socialsecurity.gov/online/ss-5.html, and then click on “Noncitizen.

  If you do not have an SSN and are not eligible to get one, you must apply for an individual taxpayer identification number (ITIN). For details on how to apply for an ITIN, see Form W-7, Application for IRS Individual Taxpayer Identification Number, and its instructions. Get Form W-7 online at IRS.gov, or call 1-800-829-1040 to order it. If you already have an ITIN, enter it wherever your SSN is requested on your tax return.

  If you are required to include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN.

  

Note.

An ITIN is for tax use only. It does not entitle you to social security benefits or change your employment or immigration status under U.S. law.

Part I—Explanation of Status—Resident or Nonresident Alien

Generally, you are considered a resident alien if you meet either the green card test or the substantial presence test for 2014. You are considered a nonresident alien for the year if you do not meet either of these tests. For more information on resident and nonresident alien status, see Pub. 519.

Green card test.   You are a resident alien for tax purposes if you are a lawful permanent resident of the United States at any time during 2014. You are a lawful permanent resident of the United States if you have been given the privilege, under U.S. immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) (or its predecessor organization, the Immigration and Naturalization Service) has issued you an alien registration card, also known as a green card.

Substantial presence test.   You are considered a resident alien for tax purposes if you meet the substantial presence test for 2014. You meet this test if you were physically present in the United States for at least:
  • 31 days during 2014, and

  • 183 days during the period 2014, 2013, and 2012, using the following chart.

(a) (b) (c) (d)
Year Days of physical presence Multiplier Testing days (multiply (b) times (c))
2014   1.000  
2013   .333  
2012   .167  
Total testing days (add column (d))  

Days of presence in the United States.

Generally, you are treated as present in the United States on any day that you are physically present in the country at any time during the day. However, you do not count the following days of presence in the United States for the substantial presence test.

  • Days you commuted to work in the United States from a residence in Canada or Mexico if you regularly commuted from Canada or Mexico.

  • Days you were in the United States for less than 24 hours while you were traveling between two places outside the United States.

  • Days you were temporarily present in the United States as a regular member of the crew of a foreign vessel engaged in transportation between the United States and a foreign country or a possession of the United States. This rule does not apply to any day you were otherwise engaged in a trade or business in the United States.

  • Days you intended, but were unable, to leave the United States because of a medical condition or medical problem that arose while you were in the United States.

  • Days you were an exempt individual. In general, an exempt individual is: (a) a foreign- government-related individual, (b) a teacher or trainee, (c) a student, or (d) a professional athlete who is temporarily present in the United States to compete in a charitable sports event.

Note.

If you qualify to exclude days of presence in the United States because you are an exempt individual (other than a foreign-government- related individual) or because of a medical condition or problem, file Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition, with your final income tax return.

Closer connection to a foreign country exception.

Even though you otherwise would meet the substantial presence test, you are not treated as having met that test for 2014 if you: (a) were present in the United States for fewer than 183 days during 2014, (b) establish that during 2014 you had a tax home in a foreign country, and (c) establish that during 2014 you had a closer connection to one foreign country in which you had a tax home than to the United States unless you had a closer connection to two foreign countries.

Note.

If you meet this exception, file Form 8840, Closer Connection Exception Statement for Aliens, with your final income tax return.

Residence determined by tax treaty.   If you are a dual-resident taxpayer, you can still claim the benefits under an income tax treaty. A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. The income tax treaty between the two countries must contain a provision that provides for resolution of conflicting claims of residence (tie-breaker rule). If you are treated as a resident of a foreign country under a tax treaty, you are treated as a nonresident alien in figuring your U.S. income tax. For purposes other than figuring your tax, you will be treated as a U.S. resident.

Dual-status tax year.   A dual-status tax year is one in which you have been both a resident alien and a nonresident alien. The most common dual-status tax years are the years of arrival and departure. In figuring your income tax liability for a dual-status tax year, different U.S. income tax rules apply to each status. You must follow these rules in completing Form 1040-C. See the Form 1040NR instructions for details.

Note.

Certain resident aliens who leave the United States during the year may be subject to tax under section 877A. These resident aliens compute their tax using the method prescribed under section 877A when completing Form 1040-C. See chapter 4 of Pub. 519 for more information.

Income effectively connected with a U.S. trade or business — nonresident aliens.   If you are a nonresident alien, the tax on your income depends on whether the income is or is not effectively connected with a U.S. trade or business.

  Income effectively connected with a U.S. trade or business (including wages earned by an employee) is taxed at the graduated rates that apply to U.S. citizens and resident aliens. Income you receive as a partner in a partnership or as a beneficiary of an estate or trust is considered effectively connected with a U.S. trade or business if the partnership, estate, or trust conducts a U.S. trade or business.

  Income from U.S. sources that is not effectively connected with a U.S. trade or business is generally taxed at 30%. Your rate may be lower if the country of which you are a resident and the United States have a treaty setting lower rates.

  For a list of the types of income not considered effectively connected with a U.S. trade or business, see the instructions for Schedule A—Income and Schedule B—Certain Gains and Losses From Sales or Exchanges by Nonresident of Property Not Effectively Connected With a U.S. Trade or Business , later. If you are a nonresident alien in the United States to study or train, see Pub. 519.

Part II—Exemptions

If you are a resident alien, you can claim the same exemptions allowed to U.S. citizens on Form 1040.

If you are a nonresident alien engaged in a trade or business in the United States and you are a U.S. national (American Samoan or a Northern Mariana Islander who chose to be a U.S. national) or a resident of Canada, India, Mexico, or South Korea, you can claim the same number of exemptions you are entitled to on Form 1040NR. All other nonresident aliens engaged in a U.S. trade or business can claim only one exemption. For more details, see Pub. 519 or the Form 1040NR instructions.

If you are a nonresident alien not engaged in a trade or business in the United States, you cannot claim any personal exemptions.

Line 14c, column (2).   You must enter each dependent's SSN or ITIN. See Identifying number, earlier.

Line 14c, column (4).   Check the box in this column if your dependent is a qualifying child for the child tax credit. See Pub. 501, Exemptions, Standard Deduction, and Filing Information, to find out who is a qualifying child.

Deduction for Exemptions Worksheet

1. Is the amount on Schedule D, line 1 or line 9, more than $305,050 ( $279,650 if head of household, $254,200 if single, $152,525 if married filing separately)? 
 
No. Multiply $3,950 by the total number of exemptions claimed on Form 1040-C, line 14d, and enter the result on Schedule D, line 4 or 12, whichever applies. Do not complete the remainder of this worksheet. 
 
Yes. Go to line 2.
2. Multiply $3,950 by the total number of exemptions claimed on Form 1040-C, line 14d. 2. ____________
3. Enter the amount from Schedule D, line 1 or line 9. 3. ____________  
4. Enter $305,050 ( $279,650 if head of household, $254,200 if single, $152,525 if married filing separately). 4. ____________  
5. Subtract line 4 from line 3 and enter here. 5. ____________  
6. Is line 5 more than $122,500 ($61,250 if married separately)? 
 
Yes. You cannot take a deduction for exemptions. Enter -0- on Schedule D, line 4 or 12, whichever applies. Do not complete the remainder of this worksheet. 
 
No. Divide line 5 by $2,500 ($1,250 if married filing separately). If the result is not a whole number, increase it to the next higher whole number (for example, increase 0.0004 to 1). .
6. ____________  
7. Multiply line 6 by 2% (.02) and enter the result as a decimal, but not more than 1.0. 7. ____________  
8. Multiply line 2 by line 7. 8. ____.________
9. Deduction for exemptions. Subtract line 8 from line 2. Enter the result here and on Schedule D, line 4 or 12, whichever applies. 9. ____________

Part III—Figuring Your Income Tax

Read the descriptions on line 1 of Form 1040-C for Groups I, II, and III to see which group(s) applies to you. If Group I or II applies, use lines 15 through 22 to figure your tax. If Group III applies, use lines 23 and 24 to figure your tax. If you are a nonresident alien to which both Groups II and III apply, use lines 15 through 24 to figure your tax.

Line 16. Adjustments.   If you are a resident alien, you can take the adjustments allowed on Form 1040. The Form 1040 instructions have information on adjustments you can take. Be sure to consider the tax law changes noted on page 1.

  If you are a nonresident alien and have income effectively connected with a U.S. trade or business, you can take the adjustments allowed on Form 1040NR. See the Form 1040NR instructions. Be sure to consider the tax law changes noted on page 1.

  If you are a nonresident alien and all your income is not effectively connected with a U.S. trade or business, you cannot take any adjustments.

Line 19. Credits.   If you are a resident alien, you can claim the same credits as on Form 1040. If you are a nonresident alien with income effectively connected with a U.S. trade or business, you can generally claim the same credits as on Form 1040NR.

Line 21. Other taxes.   Enter on line 21 any other taxes such as those listed below. Also use the 2013 Instructions for Form 1040 or the 2013 Instructions for Form 1040NR for information on the additional taxes to include on this line.
  • Self-employment tax. This tax applies to resident aliens and to nonresident aliens if an international social security agreement in effect determines that the nonresident alien is covered under the U.S. social security system. The self-employment tax rate for 2014 is 15.3%. This includes a 2.9% Medicare tax and a 12.4% social security tax. Use Schedule SE (Form 1040), Form 1040-PR, or Form 1040-SS to figure your self-employment tax. For 2014, the maximum amount of self-employment income subject to self-employment tax is $117,000. There is no limit on the amount of self-employment income subject to the Medicare tax.

    You can find more information on international social security agreements (also known as totalization agreements) at IRS.gov. Enter the keywords “totalization agreements” in the search box.

  • Social security and Medicare tax on tip income not reported to employer. If you received tips of $20 or more in any month and you did not report the full amount to your employer, you generally must pay this tax. See the Form 1040 instructions or the Form 1040NR instructions.

  • Social security and Medicare tax not withheld by employer. If you are an employee who received wages from an employer who did not withhold social security and Medicare tax from your wages, you may owe this tax. See the Form 1040 instructions or the Form 1040NR instructions.

  • Additional Medicare Tax. For information about the Additional Medicare Tax, see the Instructions for Form 8959.

  • Net Investment Income Tax. For information about the Net Investment Income Tax, see the Instructions for Form 8960.

  • Additional tax on IRAs, other qualified retirement plans, etc. If you received a distribution from or made an excess contribution to one of these plans, you may owe this tax. See the Form 1040 instructions or the Form 1040NR instructions.

  • Household employment taxes. If you pay cash wages to any one household employee in 2014, you may owe this tax. See the Form 1040 instructions or the Form 1040NR instructions.

  • Tax on accumulation distribution of trusts. Use Form 4970 to figure the tax.

  • Tax from recapture of investment credit. Use Form 4255 to figure the tax.

  • Tax from recapture of low-income housing credit. Use Form 8611 to figure the tax.

  • Tax from recapture of federal mortgage subsidy. Use Form 8828 to figure the tax.

  • Tax from recapture of qualified plug-in electric vehicle credit. For details on how to figure the tax, see Pub. 535, Business Expenses.

  • Recapture of first-time homebuyer credit. If you purchased a home in 2008 and claimed the first-time homebuyer credit, repayment of that credit began with your 2010 tax return and will continue until the credit is fully repaid. If the home ceases to be your main home, then the unpaid balance of the credit is to be repaid on the return for the year in which the home was no longer your main home. If you purchased a home in 2009, 2010, or 2011 and claimed the first-time homebuyer credit, you must maintain that home as your main home for at least 36 months to avoid having to repay the credit. For details, see the Instructions for Form 5405.

Line 24. Tax.   Generally, you must enter 30% of the amount on line 23. However, if you are entitled to a lower rate or an exemption from tax because of a treaty between your country and the United States, attach a statement showing your computation of the tax. Also include the applicable treaty article(s).

  
You can find information on lower rates or an exemption from tax because of a treaty between your country and the United States in Pub. 901, or go to www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z.

Line 28. Other payments.   Include on line 28 any of the following payments. See the instructions for Form 1040 or Form 1040NR for details on other payments to include on this line.
  • Earned income credit (EIC). This credit applies only to resident aliens. Enter any EIC that is due to you.

  • Additional child tax credit. For information on the credit and changes for 2014, see Pub. 505.

  • U.S. income tax paid at previous departure during the tax period. Enter any tax you paid if you previously departed the United States during this tax period.

  • Excess social security and RRTA tax withheld. If you had two or more employers in 2014 who together paid you more than $117,000 in wages, too much social security tax or tier 1 railroad retirement (RRTA) tax may have been withheld. See Pub. 505.

  • Credit for federal tax paid on fuels. Use Form 4136 to figure the credit.

Signature

Form 1040-C is not considered a valid return unless you sign it. You may have an agent in the United States prepare and sign your return if you are sick or otherwise unable to sign. However, you must have IRS approval to use an agent. To obtain approval, file a statement with the IRS office where you file Form 1040-C explaining why you cannot sign.

If an agent (including your spouse) signs for you, your authorization of the signature must be filed with the return.

Court-appointed conservator, guardian, or other fiduciary.   If you are a court-appointed conservator, guardian, or other fiduciary for an individual who has to file Form 1040-C, sign your name for the individual. File Form 56.

Paid preparers must sign.   Generally, anyone you pay to prepare your return must sign it and include their Preparer Tax Identification Number (PTIN) in the space provided. The preparer also must give you a copy of the return for your records. Someone who prepares your return but does not charge you should not sign your return.

Schedule A—Income

Line 1, column (c).   Enter amounts shown as federal income tax withheld on your Forms W-2, 1099, 1042-S, etc. Be sure to enter the amount withheld on the same line on which the related income is reported. Include the amount of any Additional Medicare Tax withheld by your employer. For more information, visit www.irs.gov and search keyword “Additional Medicare Tax.

Line 1, column (d).   Resident aliens should include income that would be included on Form 1040, such as wages, salaries, interest, dividends, rents, alimony, etc.

Line 1, column (e).   Enter nonresident alien income effectively connected with a U.S. trade or business. Nonresident aliens should include income that would be included on page 1 of Form 1040NR or Form 1040NR-EZ. This includes:
  • Salaries and wages (generally shown in box 1 of Form W-2),

  • The taxable part of a scholarship or fellowship grant,

  • Business income or loss (income that would be included on Schedule C (Form 1040) or Schedule C-EZ  
    (Form 1040) as an attachment to Form 1040NR), and

  • Any other income considered to be effectively connected with a U.S. trade or business. See the Instructions for Form 1040NR for details.

Line 1, column (f).   Enter nonresident alien income from U.S. sources that is not effectively connected with a U.S. trade or business, including:
  • Interest, dividends, rents, salaries, wages, premiums, annuities, compensation, remuneration, and other fixed or determinable annual or periodic gains, profits, and income.

  • Prizes, awards, and certain gambling winnings. Proceeds from lotteries, raffles, etc., are gambling winnings. You must report the full amount of your winnings. In most cases, you cannot offset losses against winnings and report the difference.

  • 85% of the U.S. social security benefits you receive. This amount is treated as U.S. source income not effectively connected with a U.S. trade or business and is subject to the 30% tax rate, unless exempt or taxed at a reduced rate under a U.S. tax treaty. Social security benefits include any monthly benefit under Title II of the Social Security Act or part of a tier 1 railroad retirement benefit treated as a social security benefit. They do not include any supplemental security income (SSI) payments.

Line 5.   Include on line 5, column (d), (e), or (f), all income you received during the year that is exempt by Code (see examples below). Also include on line 5 income that is exempt by treaty, but only if the income is reportable in column (d) or (e). Attach a statement that shows the basis for the treaty exemption (including treaty and article(s)).

   Note. Do not include on line 5 income reportable in column (f) that is exempt by treaty. Instead report these amounts on line 1 of column (f) and explain on the statement required for Part III, line 24, the basis for the reduced rate or exemption.

  Be sure to include on line 5, column (c), any amount withheld on exempt income you are reporting on line 5, column (d), (e), or (f). For example, include amounts that were withheld by a withholding agent that was required to withhold due to lack of documentation. However, do not include amounts reimbursed by the withholding agent.

   Do not include on lines 1 through 4 any amount that is reportable on line 5.

Exempt income for nonresident aliens.   The following income received by nonresident aliens is exempt from U.S. tax.
  1. Interest on bank deposits or withdrawable accounts with savings and loan associations or credit unions that are chartered and supervised under federal or state law, or amounts held by an insurance company under an agreement to pay interest on them, if the income is not effectively connected with a U.S. trade or business. Certain portfolio interest on obligations issued after July 18, 1984, is also exempt income.

  2. Your personal service income if:

    1. You were in the United States 90 days or less during the tax year,

    2. You received $3,000 or less for your services, and

    3. You performed the services as an employee of or under contract with a nonresident alien individual, foreign partnership, or foreign corporation not engaged in a U.S. trade or business; or for a foreign office of a U.S. partnership, corporation, citizen, or resident.

  3. Capital gains not effectively connected with a U.S. trade or business if you were in the United States fewer than 183 days during the tax year. Exception: Gain or loss on the disposition of a U.S. real property interest is not exempt.

  4. U.S. bond income. Your income from series E, EE, H, or HH U.S. savings bonds that you bought while a resident of the Ryukyu Islands (including Okinawa) or the Trust Territory of the Pacific Islands (Caroline and Marshall Islands).

  5. Annuities you received from qualified annuity plans or trusts if both of the following conditions apply.

    1. The work that entitles you to the annuity was performed either (1) in the United States for a foreign employer and you met the conditions under 2 earlier, or (2) outside the United States, and

    2. When the first amount was paid as an annuity, at least 90% of the employees covered by the plan (or by the plan or plans that included the trust) were U.S. citizens or residents.

  6. U.S. source dividends paid by certain foreign corporations if they are not effectively connected with your U.S. trade or business. See Second exception under Dividends in chapter 2 of Pub. 519 for the definition of foreign corporation and how to figure the amount of excludable dividends.

  Certain items of income may be exempt from federal tax under a tax treaty. For more details, see Pub. 901, Tax Treaties.

Schedule B—Certain Gains and Losses From Sales or Exchanges by Nonresident Aliens of Property Not Effectively Connected With a U.S. Trade or Business

If you are a nonresident alien, use Schedule B to figure your gain or loss from the sale or exchange of property not effectively connected with a U.S. trade or business. Include the following types of income. For more information on these types of income, see Pub. 519 and the Instructions for Form 1040NR.

1. Capital gains.   Capital gains in excess of capital losses if you were in the United States at least 183 days during the year.

   Note. The gain or loss on the disposition of a U.S. real property interest is considered effectively connected and should be shown in Schedule A, column (e).

2. Income other than capital gains.   
  • Gains on the disposal of timber, coal, or U.S. iron ore with a retained economic interest.

  • Gains from the sale or exchange of patents, copyrights, secret processes and formulas, goodwill, trademarks, trade brands, franchises, and other like property, or of any interest in any such property. The gains must result from payments for the production, use, or disposition of the property or interest.

Original issue discount (OID).   If you sold or exchanged the obligation, include only the OID that accrued while you held the obligation minus the amount previously included in income. If you received a payment on the obligation, see Pub. 519.

Schedule C—Itemized Deductions

If you are a resident alien, you can take the deductions allowed on Schedule A of Form 1040. See the Schedule A (Form 1040) instructions. Be sure to consider the tax law changes noted on page 1.

If you are a nonresident alien and have income effectively connected with a U.S. trade or business, you can take the deductions allowed on Schedule A of Form 1040NR. See the Schedule A (Form 1040NR) instructions. If you do not have income effectively connected with a U.S. trade or business, you cannot take any deductions.

Itemized Deductions Worksheet

1. Add the amounts in columns (b) and (d) of Schedule C, line 1 1. ____________
2. Enter the total amount included on line 1 above for medical and dental expenses, investment interest expense, casualty or theft losses of personal use property, casualty and theft losses from income-producing property, and gambling losses 2. ____________
3. Subtract line 2 from line 1. If zero or less, stop here; enter the amount from line 1 above on Schedule C, line 2 3. ____________
4. Multiply line 3 above by 80% (.80) 4.  ____________   
5. Enter the amount from Form 1040-C, line 17 5. ____________  
6. Enter $305,050 ( $279,650 if head of household, $254,200 if single, $152,525 if married filing separately) 6. ____________  
7. Subtract line 6 from line 5. If zero or less, stop here; enter the amount from line 1 above on Schedule C, line 2 7. ____________  
8. Multiply line 7 above by 3% (.03) 8. ____________  
9. Enter the smaller of line 4 or line 8 9. ____________
10. Total itemized deductions. Subtract line 9 from line 1. Enter the result on Schedule C, line 2 10. ____________

Residents of India who were students or business apprentices may be able to take the standard deduction. See Pub. 519 for details.

Line 2. If the amount on Form 1040-C, line 17, is over $305,050 ( $279,650 if head of household, $254,200 if single, $152,525 if married filing separately), use the Itemized Deductions Worksheet, earlier, to figure the amount to enter on line 2.

Schedule D—Tax Computation

Standard Deduction (Group I only)

If you do not itemize your deductions, you can take the 2014 standard deduction listed below for your filing status.

Filing 
Status
Standard 
Deduction
Married filing jointly or 
Qualifying widow(er)
 
 
$12,400*
Head of household $9,100*
 
 
Single or Married filing separately
 
 
$6,200*
*To these amounts, add the additional amount shown next.

Additional amount for the elderly or the blind.   An additional standard deduction amount of $1,200 is allowed for a married individual (whether filing jointly or separately) or a qualifying widow(er) who is age 65 or older or blind in 2014 ($2,400 if the individual is both age 65 or older and blind, $4,800 if both spouses are age 65 or older and blind). An additional standard deduction amount of $1,550 is allowed for an unmarried individual (single or head of household) who is age 65 or older or blind ($3,100 if the individual is both age 65 or older and blind).

   Note. If you were born before January 2, 1950, you are considered to be age 65 or older in 2014.

Limited standard deduction for dependents.   If you can be claimed as a dependent on another person's 2014 return, your standard deduction is the greater of:
  • $1,000 or

  • Your earned income plus $350 (up to the standard deduction amount).

  To this amount add any additional amounts as explained earlier.

Lines 4 and 12

If your adjusted gross income is more than $305,050 ( $279,650 if head of household, $254,200 if single, $152,525 if married filing separately), use the Deduction for Exemptions Worksheet, earlier, to figure the exemption amount. Otherwise, multiply $3,950 by the number of exemptions to which you are entitled.

Lines 6 and 14

Include in the total on line 6 or line 14, whichever applies, any tax from Form 4972, Tax on Lump-Sum Distributions, and Form 8814, Parents' Election To Report Child's Interest and Dividends.

Also include any recapture of an education credit. You may owe this tax if you claimed an education credit in an earlier year, and either tax-free educational assistance or a refund of qualified expenses was received in 2014 for the student. See Form 8863 for more details.

Lines 7 and 15

Include in the total on line 7 or line 15, whichever applies, any tax from Form 6251, Alternative Minimum Tax—Individuals.

The AMT exemption amount is:

  • $52,800 if single or head of household;

  • $82,100 if married filing jointly or a qualifying widow(er);

  • $41,050 if married filing separately.


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