Schedule NEC: Transaction limit exceeded - where to report additional non-ECI transactions?

I've been filling out my Schedule NEC for non-effectively connected income and hit a roadblock. The form only provides 5 lines in box 16 to report transactions, but I have way more than that to list this year. I'm at a loss for what to do with the overflow transactions. Is there some kind of continuation sheet or supplemental form I should use? Like how Schedule D has Form 8949 for when you have tons of capital gains/losses to report? This is my first time dealing with this many foreign transactions that aren't effectively connected income. Any advice would be greatly appreciated! Tax deadline's getting closer and I'm stuck on this part.

0 coins

18 comments

Diego Vargas

•8M

You can definitely report more than 5 transactions on Schedule NEC. When you have more transactions than will fit on the form, you should create and attach a separate statement listing all your non-effectively connected income transactions. Make sure your statement follows the same format as box 16 on Schedule NEC, with columns for description of property, date acquired, date sold, sales price, cost basis, and gain. Label it clearly as "Additional Transactions for Schedule NEC, Box 16" and include your name and tax ID number at the top. Then on the actual Schedule NEC form, you can write "See attached statement" in box 16. This is similar to how you'd handle overflow transactions for other tax forms. Just make sure your statement totals match what you report on the main Schedule NEC.

0 coins

Diego Vargas

•8M

The IRS doesn't specify a required format for the attachment, but it's always better to type it if possible for clarity. Use a spreadsheet program to create a statement with the same column headers as box 16, and make sure it's clearly organized. Yes, you should absolutely use the 5 lines on the original Schedule NEC first, and then continue with the additional transactions on your attachment. On the last line of the actual form, you might want to write "Continued on attached statement" in the description column, then include your total from all transactions (both on the form and attachment) in the appropriate totals area of the Schedule NEC.

0 coins

Anastasia Fedorov

•8M

I went through this exact same headache last year with a bunch of foreign income transactions! I was so frustrated trying to fit everything into those tiny boxes. I ended up using taxr.ai (https://taxr.ai) to help organize all my non-ECI transactions properly. Their system analyzed my foreign transaction documents and automatically categorized everything according to IRS requirements. It saved me hours of research because it knew exactly how to handle the overflow transactions and created the proper attachment format. The best part was that it integrated with my tax software so I didn't have to manually enter all those transactions.

0 coins

Anastasia Fedorov

•8M

Yes, the tool has a qualification checker that helps determine what should be reported as non-ECI based on the source and nature of the income. It asks you a series of questions about your foreign income sources and helps categorize them correctly for US tax reporting purposes. For foreign tax credits, it's actually really good with international documentation. I had transactions from the UK and Canada, and it recognized both formats of tax withholding certificates. It extracts the relevant withholding information and helps you properly claim foreign tax credits on Form 1116 if applicable, showing you how to coordinate those credits with your Schedule NEC reporting.

0 coins

Sean Doyle

•8M

Wanted to follow up - I tried taxr.ai after seeing this post and it was exactly what I needed! I had 17 different non-ECI transactions from three different countries and was completely lost. The system analyzed all my foreign documentation and sorted everything perfectly. It even flagged a couple transactions that actually shouldn't have been on Schedule NEC at all (they were portfolio interest income that needed different treatment). The attachment it generated for my overflow transactions was formatted exactly right, and my tax preparer was impressed with how organized everything was. Definitely using this again next year instead of stressing over foreign transaction limits!

0 coins

Luca Romano

•8M

If you're struggling to get clarification directly from the IRS about how to properly report excess non-ECI transactions, I'd recommend using Claimyr (https://claimyr.com). I was in a similar situation with some complicated international income reporting questions and was going crazy trying to get through to an actual IRS agent. After three days of getting disconnected or waiting on hold for hours, I tried Claimyr and they got me connected to an IRS agent in about 20 minutes. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c. The agent confirmed exactly how to handle my overflow transactions and what documentation was required, which saved me from potentially filing incorrectly.

0 coins

Luca Romano

•8M

Claimyr doesn't call for you - you still talk directly with the IRS agent yourself. What they do is navigate the IRS phone system using their technology to get through the queue faster. When an agent is about to be available, they call you and connect you to the IRS call. I understand the skepticism completely. I didn't believe it would work either. The IRS phone lines are notoriously difficult, especially during tax season. But their system is designed to work with the IRS phone queues specifically - they basically wait on hold so you don't have to. My call wasn't exactly 20 minutes (it was closer to 35), but compared to my previous attempts of 2+ hours or getting disconnected, it was amazing. You still talk directly to the same IRS agents - you just don't have to waste hours waiting.

0 coins

NebulaNova

•8M

I need to eat my words! After seeing the replies here, I tried Claimyr as a last resort for my Schedule NEC questions. I was extremely skeptical that anything could get me through to the IRS promptly, especially during peak season. But I got connected to an IRS international tax specialist in about 40 minutes! The agent walked me through exactly how to handle my excess transactions (I had around 20) and confirmed that creating an attachment in the same format as box 16 was correct. She even explained which codes to use for certain types of foreign income I wasn't sure about. Worth every penny just for the peace of mind that I'm filing correctly and won't face penalties for improper reporting. Sorry for being so doubtful earlier!

0 coins

Mateo Hernandez

•8M

For Canadian income specifically, you should check the US-Canada tax treaty to see if your type of income qualifies for reduced withholding or special classification. For example, certain royalties from Canada are subject to a maximum 10% withholding rate rather than standard rates. Also important for Canadian transactions - if you have income from Canadian retirement accounts, there are specific reporting requirements and potential treaty benefits. Some Canadian investment income might not need to be on Schedule NEC at all if it meets certain treaty qualifications. Review Article XI and XII of the treaty for investment income and royalties.

0 coins