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Click here to download the official instructions
for the 1040NR-EZ
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Click here for the International Tax Law Webpage
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Filing taxes in the United States for the money earned while in the WDWIP can
be a very arduous task, to say the least. Some countries have income tax treaties
which allow reciprocal tax exclusion for certain individuals, typically students.
Participants from other countries (all but Canada and Japan to the best of my knowledge)
must file and pay taxes as a normal U.S. citizen would, and are usually eligible for a
return. This tax guide is designed primarily for Canadians taking advantage of the
Canada/US Tax Treaty. One word of caution, since I am by no means an expert on the
subject, take the information here only as advice from one person, not an official
source. Below you will find the format for filing I have used, what others have
commented about filing, and of course, the forms you will need are located on the left
bar.
Suggested method
The following is the method of filling out the 1040NR-EZ as
it was done last tax year. This resulted in rebates for everyone who filed in this
manner.
Address information should be filled out as instructed;
Identifying number is your Social Security number
Line-by-line information:
Andy, check out the tax treaty at the following address,
http://www.intltaxlaw.com/treaties/canada/treaty.htm
and compare articles XX and XV. I'm pretty sure XV is the right one
(which was backed up by my article I posted to the VLB). I think article
XX only applies to money received outside of the states.
Here's what article XV says according to my source:
---------------------------------------------------
2. ...renumeration derived by a [Canadian resident] in respect of
employment exercised in a calendar year in [the United States] shall be
taxable only in [Canada] if:
(a) Such renumeration does not exceed ten thousand dollars ($10,000) in
the currency of [the United States]...
Thus if you had less than $10,000 in earned income from U.S. sources in a
calendar year, you may exclude this income from federal income tax in the
U.S. by claiming Article XV of the U.S.-Canada tax treaty
Here's how I translated article XX (which may be wrong):
--------------------------------------------------------------------
Payments which a student, apprentice or business trainee, who is or was
immediately before visiting [the United States] a resident of [Canada],
and who is present in [the United States] for the purpose of his full-time
education or training, receives for the purpose of his maintenance,
education or training shall not be taxed in [the United States] provided
that such payments are made to him from *outside* [the United States].
(this basically says, I think, if you're a student (which I guess we
are) and receive scholarship money and/or money from parents to support
yourself or pay for school you don't have to pay tax on it *if it came
from Canada*).
My source backs this up as well when it says: "The U.S.-Canada tax treaty
contains no *specific benefits* for either students or visiting scholars
who are residents of Canada.
As well, what you have written for item J is not entirely correct (but I
don't think it's really incorrect either).
"J. Enter the $amount followed by "US/Canada Income Tax Treaty,
publication 597, Article XX - students"
The US - Canada Income Tax Treaty is not really Publication 597.
Publication 597 is really only an overview/synopsis of what the US-Canada
Income Tax Treaty provides. It does not contain the individual articles.
The IRS doesn't publish the treaty because it's a common document shared
between the United States and Canada. My source suggests that you should
specifically claim that you made less than $10,000 by writing "earned
income less than $10,000, Article XV" for the second part of item J.
What others have said
exerpts from the VLB:
"Just to let you know i checked it all out on
both ends and you only have to file taxes on money you made in canada in canada, and in
the USA on the money you made in the USA this is acording to the guy from the IRS here in
florida. There is no tax treatey between the US and Canada and you don't have to pay tax
on the same money twice. He also told me that there has been a problem with the way
that Canadian pavillion people have done there us taxes for the last five years, and that
the days of full refunds are over. No one is exempt because of there citizenship.
All of us that are down here now owe from 10$$ to about 300$$ so be careful when you file
your US
taxes because they are no longer playing around!"
- Patrick B.
Here's some more information I found regarding declaring
tips and allocated tips.
I found a page from another university with step by step instructions for filling out a
1997 1040NR-EZ
form. Most importantly is what it says for step #15.
-----------------------------
If you are employed in a job where you earn tips, and you did not report $20 or more in
tips in any one
month to your employer, you must complete Form 4137 to calculate social security tax on
those tips and
record it here. (F-1, J-1, M-1, and Q nonresident aliens employed with INS permission are
not subject to
social security tax and may disregard this item.)
------------------------------
You can find this document at:
http://www.wooster.edu/oisa/1040NR-EZ.html
- Trent S.
As for those of us who were not servers and made more
"official" money on our W-4's from what I could
find I think that if we made over $10,000 we're screwed. From the IRS site it says you are
only exempt
from taxes if you made less than $10,000 or if you were in the US for less than 183 days
in the year AND
the money doesn't come from a US employer. Neither of these last 2 conditions are true for
us. If this is
right and I am not exempt from paying tax I am in trouble because my rough calculations
show I will owe
another $300 US on top of what Disney deducted! I hope I made a mistake or that I am wrong
about
something.
- Darren B.
First of all, there is most definitely a Canada-U.S. tax
treaty. Second of all, how would this guy have any idea about how the Canadian pavillion
has been filing taxes for the last five years??? He's correct in saying that you don't
have to pay taxes twice--you pay them all in Canada. Now I am most definately not an
expert in this area but I can't see how everyone could have gotten their money back last
year, and now this year everyone has to pay?!
Nothing has changed with tax laws. I did some investigation on the 'net and think I found
a pretty relevant
link. I reproduced the information below. But if you want to check the original page,
here's the URL:
http://www.upenn.edu/oip/fsa/tax/canatre.html
This is from the University of Pennsilvanya, Tax Information for International Students
page.
----------------------------------------------------------------
Information about the U.S.-Canada Tax Treaty
----------------------------------------------------------------
The U.S.-Canada tax treaty contains no specific benefits for either students or visiting
scholars who are
residents of Canada. The treaty does, however, contain several general provisions that
will apply to some
students and scholars from Canada and which a few may find beneficial.
The first provision, contained in Article XV of the U.S.-Canada tax treaty, applies to
Canadian residents
who had less than $10,000 of earned income in the U.S. in the calendar year.
Article XV provides that:
2. ...renumeration derived by a [Canadian resident] in respect of employment exercised in
a calendar year
in [the United States] shall be taxable only in [Canada] if:
(a) Such renumeration does not exceed ten thousand dollars ($10,000) in the currency of
[the United
States]...
Thus if you had less than $10,000 in earned income from U.S. sources in a calendar year,
you may
exclude this income from federal income tax in the U.S. by claiming Article XV of the
U.S.-Canada tax
treaty when you file Form 1040NR, "U.S. Nonresident Alien Income Tax Return," or
Form 1040NR-EZ,
"U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents."
To claim this provision of the U.S.-Canada tax treaty on Form 1040NR, write "0"
on page 1, Line 8 of the
form,"Wages, salaries, tips, etc." Write the amount of your earned income for
the year (which must be less
than $10,000, of course) on page 1, Line 22, "Total income exempt by a treaty from
page 5, Item M." On
page 5, Item M, claim the tax treaty for "Canada," and write the amount of your
earned income (i.e. the
same amount you wrote on page 1, Line 22); after the amount write "earned income less
than $10,000,
Article XV."
To claim this provision of the U.S.-Canada tax treaty on Form 1040NR-EZ, write
"0" on page 1, Line 3
of the form,"Wages,
salaries, tips, etc." Write the amount of your earned income for the year (which must
be less than $10,000,
of course) on page 1, Line 6, "Total wages and scholarships exempt by a treaty from
page 2, Item J." On
page 2, Item J, claim the tax treaty for "Canada," and write the amount of your
earned income (i.e. the
same amount you wrote on page 1, Line 6); after the amount write "earned income less
than $10,000,
Article XV."
- Trent S.
Hey there guys I hate to break it to you, but the good
old canadian government somehow found out that I
declared my taxes in the US, and I got a nice little note saying that I had allready been
issued my foreign
tax credit on my canadian cheque, therefor I now owed the canadian government the money I
got in the
states back to them!!!! It could be different because I am an American citizen, but I
never told them, so
somehow they found out.
- Nancy S.
I believe yes you are supposed to claim your taxes here as
that is why we get our taxes back in the
states--b/c os some treaty...hoever no the likelyhood of them ever finding out that you
worked there is
very doubtful ( this is what I have been told) For years now no Canadian has filed and
they haven't gotten
in and trouble. But a few have calimed. If I would have claimed last year I would have had
to pay the cdn
government over 2,000 dollars..more than the money I got back from disney. I landed up not
filing last
year and I was refunded about 300. Its up to you.
- Carolyn D.
Thanks to everyone else who has
been contributing to the tax thread on the VLB!
Bottom Line
How you file your return and who you listen to is your
choice, and all advice, including that here, should be carefully scrutinized.
Remember, if you DO happen to file incorrectly, you can always petition it, if you don't
mind waiting for your $$.
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