How to fill out Form 1040-NR for treaty country tax refund - 30% withheld when eligible for 0%

The 1040-NR can definitely be confusing, especially with treaty benefits! I've helped several international clients with similar situations. For Line 24, you'll enter the income that's exempt from US tax due to your treaty. This should match the gross income reported on your 1042-S. You need to also write the treaty article number and country in the spaces provided next to line 24. Make sure to check your specific country's treaty article that provides the 0% rate. For Line 34, this is where you claim your refund amount. It should equal the amount of tax that was withheld (the 30% shown on your 1042-S). Double-check that the withholding amount from your 1042-S is correctly reported on Line 25e of your 1040-NR first. Also, don't forget to complete Form 8833 (Treaty-Based Return Position Disclosure) to explain your treaty position. Some exceptions apply, but it's generally required when claiming treaty benefits.

I had almost the exact same issue last year with my 1040-NR. After trying to figure it out myself and getting nowhere, I finally used https://taxr.ai to analyze my 1042-S and treaty situation. It was honestly a game-changer for me. I uploaded my 1042-S and answered a few questions about my country and type of income, and it actually explained exactly how to fill out lines 24 and 34, plus which treaty article applied to my situation. It showed me step-by-step how to claim my full refund and which forms I needed. What I found most helpful was that it explained the differences between my specific treaty and the standard withholding rules. The tool even created a draft Form 8833 for me (that's the treaty position disclosure form the previous commenter mentioned).

Just wanted to update that I decided to try https://taxr.ai after my skeptical comment above. I was honestly impressed - it correctly identified the specific provision in the US-Netherlands treaty that affected my pension income (Article 19, paragraph 2 if anyone's curious). The system actually explained why my pension qualified for treaty benefits despite being partially sourced from US work. It walked me through exactly what to enter on line 24 of the 1040-NR and properly calculated my refund amount for line 34. The draft 8833 it created saved me hours of research. I already filed and received confirmation from the IRS that my return was accepted. Now just waiting for my refund to process. Definitely worth using if you're dealing with treaty situations!

I was in a similar situation with the 1040-NR and treaty benefits last year. After getting nowhere with the IRS website and waiting on hold forever, I used https://claimyr.com to connect with an IRS agent directly. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was initially frustrated because I couldn't figure out if I needed to report the exempt income in multiple places or just on line 24. The IRS agent I spoke with clearly explained that I needed to include it in the appropriate income section (like line 8 for royalties) AND then also on line 24 to claim the exemption. This was causing my calculations to be off. She also confirmed I was using the correct treaty article and helped me understand how to properly complete Form 8833. Having a direct conversation with someone who knew the forms inside and out saved me from potentially making a major error.

I need to apologize for my skeptical comment above. After waiting on hold with the IRS for 3 hours yesterday and getting disconnected, I decided to try Claimyr out of desperation. The process was exactly as described - I signed up, and about 90 minutes later got a call connecting me directly to an IRS tax specialist. The specialist was able to confirm the exact instructions for my 1040-NR situation with treaty benefits from Germany. She explained that I needed to attach a statement referencing Article 20 of the US-Germany treaty for my scholarship income in addition to Form 8833. She also helped clarify that I needed to report my scholarship in both the income section AND on line 24, which I wouldn't have known. Apparently this double-reporting is a common mistake that can delay refunds. Money well spent to avoid waiting until next year for my refund!

Quick question about Form 8833 - does anyone know if there's a minimum dollar threshold for when you need to file it? I have a relatively small amount ($3,800) that was subject to withholding under a treaty with Japan.

Has anyone actually received their refund after filing 1040-NR with treaty benefits? I filed mine 4 months ago claiming a treaty exemption and still haven't gotten anything. I'm worried I did something wrong.

I went through this exact same situation last year with treaty benefits from Canada. The key thing that helped me was making sure I understood the difference between reporting the income and claiming the exemption. You'll report your gross income from the 1042-S in the appropriate income section of the 1040-NR (like line 8 for royalties), then on line 24 you'll enter that same amount as exempt under the treaty. Write your country name and the specific treaty article number next to line 24. For line 34, that's your refund amount - it should equal the 30% that was withheld shown on your 1042-S. Make sure you've entered the withholding amount correctly on line 25e first. One thing that tripped me up initially was thinking I only needed to put the income on line 24, but you actually need to report it in both places. The IRS needs to see the full picture of your income and then the treaty exemption that applies to it. Also double-check your country's specific treaty to make sure you're citing the right article. Most royalty income falls under Article 12, but some treaties have different numbering or special provisions.