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1040 Long Form

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1040 Long Form

1040 long form Publication 560 - Introductory Material Table of Contents Future Developments What's New Reminders IntroductionSEP plans. 1040 long form SIMPLE plans. 1040 long form Qualified plans. 1040 long form Ordering forms and publications. 1040 long form Tax questions. 1040 long form Future Developments For the latest information about developments related to Publication 560, such as legislation enacted after we release it, go to www. 1040 long form irs. 1040 long form gov/pub560. 1040 long form What's New Compensation limit increased for 2013 and 2014. 1040 long form  For 2013 the maximum compensation used for figuring contributions and benefits increases to $255,000. 1040 long form This limit increases to $260,000 for 2014. 1040 long form Elective deferral limit for 2013 and 2014. 1040 long form  The limit on elective deferrals, other than catch-up contributions, increases to $17,500 for 2013 and remains at $17,500 for 2014. 1040 long form These limits apply for participants in SARSEPs, 401(k) plans (excluding SIMPLE plans), section 403(b) plans and section 457(b) plans. 1040 long form Defined contribution limit increased for 2013 and 2014. 1040 long form  The limit on contributions, other than catch-up contributions, for a participant in a defined contribution plan increases to $51,000 for 2013. 1040 long form This limit increases to $52,000 for 2014. 1040 long form SIMPLE plan salary reduction contribution limit for 2013 and 2014. 1040 long form  The limit on salary reduction contributions, other than catch-up contributions, increases to $12,000 for 2013 and remains at $12,000 for 2014. 1040 long form Catch-up contribution limit remains unchanged for 2013 and 2014. 1040 long form  A plan can permit participants who are age 50 or over at the end of the calendar year to make catch-up contributions in addition to elective deferrals and SIMPLE plan salary reduction contributions. 1040 long form The catch-up contribution limitation for defined contribution plans other than SIMPLE plans remains unchanged at $5,500 for 2013 and 2014. 1040 long form The catch-up contribution limitation for SIMPLE plans remains unchanged at $2,500 for 2013 and 2014. 1040 long form The catch-up contributions a participant can make for a year cannot exceed the lesser of the following amounts. 1040 long form The catch-up contribution limit. 1040 long form The excess of the participant's compensation over the elective deferrals that are not catch-up contributions. 1040 long form See “Catch-up contributions” under Contribution Limits and Limit on Elective Deferrals in chapters 3 and 4, respectively, for more information. 1040 long form All section references are to the Internal Revenue Code, unless otherwise stated. 1040 long form Reminders In-plan Roth rollovers. 1040 long form  Section 402A(c)(4) provides for a distribution from an individual's account in a 401(k) plan, other than from a designated Roth account, that is rolled over to the individual's designated Roth account in the same plan. 1040 long form An in-plan Roth rollover is not treated as a distribution for most purposes. 1040 long form Section 402A(c)(4) was added by the Small Business Jobs Act of 2010 and applies to distributions made after September 27, 2010. 1040 long form For additional guidance on in-plan Roth rollovers, see Notice 2010-84, 2010-51 I. 1040 long form R. 1040 long form B. 1040 long form 872, available at  www. 1040 long form irs. 1040 long form gov/irb/2010-51_IRB/ar11. 1040 long form html. 1040 long form In-plan Roth rollovers expanded. 1040 long form  Beginning in 2013, a plan with designated Roth accounts can permit a participant to roll over amounts into a designated Roth account from his or her other accounts in the same plan, regardless of whether the participant is eligible for a distribution from the other accounts. 1040 long form Section 402A(c)(4) was amended by the American Taxpayer Relief Act of 2012. 1040 long form For more information, see Notice 2013-74, 2013-52 I. 1040 long form R. 1040 long form B. 1040 long form 819, available at www. 1040 long form irs. 1040 long form gov/irb/2013-52_IRB/ar11. 1040 long form html. 1040 long form Credit for startup costs. 1040 long form  You may be able to claim a tax credit for part of the ordinary and necessary costs of starting a SEP, SIMPLE, or qualified plan. 1040 long form The credit equals 50% of the cost to set up and administer the plan and educate employees about the plan, up to a maximum of $500 per year for each of the first 3 years of the plan. 1040 long form You can choose to start claiming the credit in the tax year before the tax year in which the plan becomes effective. 1040 long form You must have had 100 or fewer employees who received at least $5,000 in compensation from you for the preceding year. 1040 long form At least one participant must be a non-highly compensated employee. 1040 long form The employees generally cannot be substantially the same employees for whom contributions were made or benefits accrued under a plan of any of the following employers in the 3-tax-year period immediately before the first year to which the credit applies. 1040 long form You. 1040 long form A member of a controlled group that includes you. 1040 long form A predecessor of (1) or (2). 1040 long form The credit is part of the general business credit, which can be carried back or forward to other tax years if it cannot be used in the current year. 1040 long form However, the part of the general business credit attributable to the small employer pension plan startup cost credit cannot be carried back to a tax year beginning before January 1, 2002. 1040 long form You cannot deduct the part of the startup costs equal to the credit claimed for a tax year, but you can choose not to claim the allowable credit for a tax year. 1040 long form To take the credit, use Form 8881, Credit for Small Employer Pension Plan Startup Costs. 1040 long form Retirement savings contributions credit. 1040 long form  Retirement plan participants (including self-employed individuals) who make contributions to their plan may qualify for the retirement savings contribution credit. 1040 long form The maximum contribution eligible for the credit is $2,000. 1040 long form To take the credit, use Form 8880, Credit for Qualified Retirement Savings Contributions. 1040 long form For more information on who is eligible for the credit, retirement plan contributions eligible for the credit and how to figure the credit, see Form 8880 and its instructions or go to the IRS website and search Retirement Topics-Retirement Savings Contributions Credit (Saver's Credit). 1040 long form Photographs of missing children. 1040 long form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040 long form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040 long form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040 long form Introduction This publication discusses retirement plans you can set up and maintain for yourself and your employees. 1040 long form In this publication, “you” refers to the employer. 1040 long form See chapter 1 for the definition of the term employer and the definitions of other terms used in this publication. 1040 long form This publication covers the following types of retirement plans. 1040 long form SEP (simplified employee pension) plans. 1040 long form SIMPLE (savings incentive match plan for employees) plans. 1040 long form Qualified plans (also called H. 1040 long form R. 1040 long form 10 plans or Keogh plans when covering self-employed individuals), including 401(k) plans. 1040 long form SEP, SIMPLE, and qualified plans offer you and your employees a tax-favored way to save for retirement. 1040 long form You can deduct contributions you make to the plan for your employees. 1040 long form If you are a sole proprietor, you can deduct contributions you make to the plan for yourself. 1040 long form You can also deduct trustees' fees if contributions to the plan do not cover them. 1040 long form Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan. 1040 long form Under a 401(k) plan, employees can have you contribute limited amounts of their before-tax (after-tax, in the case of a qualified Roth contribution program) pay to the plan. 1040 long form These amounts (and the earnings on them) are generally tax free until your employees receive distributions from the plan or, in the case of a qualified distribution from a designated Roth account, completely tax free. 1040 long form What this publication covers. 1040 long form   This publication contains the information you need to understand the following topics. 1040 long form What type of plan to set up. 1040 long form How to set up a plan. 1040 long form How much you can contribute to a plan. 1040 long form How much of your contribution is deductible. 1040 long form How to treat certain distributions. 1040 long form How to report information about the plan to the IRS and your employees. 1040 long form Basic features of SEP, SIMPLE, and qualified plans. 1040 long form The key rules for SEP, SIMPLE, and qualified plans are outlined in Table 1. 1040 long form SEP plans. 1040 long form   SEPs provide a simplified method for you to make contributions to a retirement plan for yourself and your employees. 1040 long form Instead of setting up a profit-sharing or money purchase plan with a trust, you can adopt a SEP agreement and make contributions directly to a traditional individual retirement account or a traditional individual retirement annuity (SEP-IRA) set up for yourself and each eligible employee. 1040 long form SIMPLE plans. 1040 long form   Generally, if you had 100 or fewer employees who received at least $5,000 in compensation last year, you can set up a SIMPLE plan. 1040 long form Under a SIMPLE plan, employees can choose to make salary reduction contributions rather than receiving these amounts as part of their regular pay. 1040 long form In addition, you will contribute matching or nonelective contributions. 1040 long form The two types of SIMPLE plans are the SIMPLE IRA plan and the SIMPLE 401(k) plan. 1040 long form Qualified plans. 1040 long form   The qualified plan rules are more complex than the SEP plan and SIMPLE plan rules. 1040 long form However, there are advantages to qualified plans, such as increased flexibility in designing plans and increased contribution and deduction limits in some cases. 1040 long form Table 1. 1040 long form Key Retirement Plan Rules for 2013 Type  of  Plan Last Date for Contribution Maximum Contribution Maximum Deduction When To Set Up Plan SEP Due date of employer's return (including extensions). 1040 long form Smaller of $51,000 or 25%1 of participant's compensation. 1040 long form 2 25%1 of all participants' compensation. 1040 long form 2 Any time up to the due date of employer's return (including extensions). 1040 long form SIMPLE IRA and SIMPLE 401(k) Salary reduction contributions: 30 days after the end of the month for which the contributions are to be made. 1040 long form 4  Matching or nonelective contributions: Due date of employer's return (including extensions). 1040 long form Employee contribution: Salary reduction contribution up to $12,000, $14,500 if age 50 or over. 1040 long form   Employer contribution:  Either dollar-for-dollar matching contributions, up to 3% of employee's compensation,3 or fixed nonelective contributions of 2% of compensation. 1040 long form 2 Same as maximum contribution. 1040 long form Any time between 1/1 and 10/1 of the calendar year. 1040 long form   For a new employer coming into existence after 10/1, as soon as administratively feasible. 1040 long form Qualified Plan: Defined Contribution Plan  Elective deferral: Due date of employer's return (including extensions). 1040 long form 4   Employer contribution: Money Purchase or Profit-Sharing: Due date of employer's return (including extensions). 1040 long form  Employee contribution: Elective deferral up to $17,500, $23,000 if age 50 or over. 1040 long form   Employer contribution: Money Purchase: Smaller of $51,000 or 100%1 of participant's compensation. 1040 long form 2  Profit-Sharing: Smaller of $51,000 or 100%1 of participant's compensation. 1040 long form 2  25%1 of all participants' compensation2, plus amount of elective deferrals made. 1040 long form   By the end of the tax year. 1040 long form Qualified Plan: Defined Benefit Plan Contributions generally must be paid in quarterly installments, due 15 days after the end of each quarter. 1040 long form See Minimum Funding Requirement in chapter 4. 1040 long form Amount needed to provide an annual benefit no larger than the smaller of $205,000 or 100% of the participant's average compensation for his or her highest 3 consecutive calendar years. 1040 long form Based on actuarial assumptions and computations. 1040 long form By the end of the tax year. 1040 long form 1Net earnings from self-employment must take the contribution into account. 1040 long form See Deduction Limit for Self-Employed Individuals in chapters 2 and 4 . 1040 long form  2Compensation is generally limited to $255,000 in 2013. 1040 long form  3Under a SIMPLE 401(k) plan, compensation is generally limited to $255,000 in 2013. 1040 long form  4Certain plans subject to Department of Labor rules may have an earlier due date for salary reduction contributions and elective deferrals. 1040 long form What this publication does not cover. 1040 long form   Although the purpose of this publication is to provide general information about retirement plans you can set up for your employees, it does not contain all the rules and exceptions that apply to these plans. 1040 long form You may also need professional help and guidance. 1040 long form   Also, this publication does not cover all the rules that may be of interest to employees. 1040 long form For example, it does not cover the following topics. 1040 long form The comprehensive IRA rules an employee needs to know. 1040 long form These rules are covered in Publication 590, Individual Retirement Arrangements (IRAs). 1040 long form The comprehensive rules that apply to distributions from retirement plans. 1040 long form These rules are covered in Publication 575, Pension and Annuity Income. 1040 long form The comprehensive rules that apply to section 403(b) plans. 1040 long form These rules are covered in Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans). 1040 long form Comments and suggestions. 1040 long form   We welcome your comments about this publication and your suggestions for future editions. 1040 long form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040 long form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040 long form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040 long form   You can send your comments from www. 1040 long form irs. 1040 long form gov/formspubs. 1040 long form Click on “More Information” and then on “Give us feedback. 1040 long form ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040 long form Ordering forms and publications. 1040 long form   Visit www. 1040 long form irs. 1040 long form gov/formspubs to download forms  and publications, call 1-800-TAX-FORM  (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040 long form Internal Revenue Service 1201 N. 1040 long form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040 long form   If you have a tax question, check the information available on IRS. 1040 long form gov or call 1-800-829-1040. 1040 long form We cannot answer tax questions sent to either of the above addresses. 1040 long form Note. 1040 long form Forms filed electronically with the Department of Labor are not available on the IRS website. 1040 long form Instead, see www. 1040 long form efast. 1040 long form dol. 1040 long form gov. 1040 long form Prev  Up  Next   Home   More Online Publications
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The 1040 Long Form

1040 long form 3. 1040 long form   Exclusions From Gross Income Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Resident AliensForeign Earned Income and Housing Amount Nonresident AliensInterest Income Dividend Income Services Performed for Foreign Employer Gambling Winnings From Dog or Horse Racing Gain From the Sale of Your Main Home Scholarships and Fellowship GrantsExpenses that do not qualify. 1040 long form Introduction Resident and nonresident aliens are allowed exclusions from gross income if they meet certain conditions. 1040 long form An exclusion from gross income is generally income you receive that is not included in your U. 1040 long form S. 1040 long form income and is not subject to U. 1040 long form S. 1040 long form tax. 1040 long form This chapter covers some of the more common exclusions allowed to resident and nonresident aliens. 1040 long form Topics - This chapter discusses: Nontaxable interest, Nontaxable dividends, Certain compensation paid by a foreign employer, Gain from sale of home, and Scholarships and fellowship grants. 1040 long form Useful Items - You may want to see: Publication 54 Tax Guide for U. 1040 long form S. 1040 long form Citizens and Resident Aliens Abroad 523 Selling Your Home See chapter 12 for information about getting these publications. 1040 long form Resident Aliens Resident aliens may be able to exclude the following items from their gross income. 1040 long form Foreign Earned Income and Housing Amount If you are physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, you may qualify for the foreign earned income exclusion. 1040 long form The exclusion is $97,600 in 2013. 1040 long form In addition, you may be able to exclude or deduct certain foreign housing amounts. 1040 long form You may also qualify if you are a bona fide resident of a foreign country and you are a citizen or national of a country with which the United States has an income tax treaty. 1040 long form For more information, see Publication 54. 1040 long form Foreign country. 1040 long form    A foreign country is any territory under the sovereignty of a government other than that of the United States. 1040 long form   The term “foreign country” includes the country's territorial waters and airspace, but not international waters and the airspace above them. 1040 long form It also includes the seabed and subsoil of those submarine areas adjacent to the country's territorial waters over which it has exclusive rights under international law to explore and exploit the natural resources. 1040 long form   The term “foreign country” does not include U. 1040 long form S. 1040 long form possessions or territories. 1040 long form It does not include the Antarctic region. 1040 long form Nonresident Aliens Nonresident aliens can exclude the following items from their gross income. 1040 long form Interest Income Interest income that is not connected with a U. 1040 long form S. 1040 long form trade or business is excluded from income if it is from: Deposits (including certificates of deposit) with persons in the banking business, Deposits or withdrawable accounts with mutual savings banks, cooperative banks, credit unions, domestic building and loan associations, and other savings institutions chartered and supervised as savings and loan or similar associations under federal or state law (if the interest paid or credited can be deducted by the association), and Amounts held by an insurance company under an agreement to pay interest on them. 1040 long form State and local government obligations. 1040 long form   Interest on obligations of a state or political subdivision, the District of Columbia, or a U. 1040 long form S. 1040 long form possession, generally is not included in income. 1040 long form However, interest on certain private activity bonds, arbitrage bonds, and certain bonds not in registered form is included in income. 1040 long form Portfolio interest. 1040 long form   Interest and original issue discount that qualifies as portfolio interest is not subject to NRA withholding. 1040 long form To qualify as portfolio interest, the interest must be paid on obligations issued after July 18, 1984, and otherwise subject to NRA withholding. 1040 long form Note. 1040 long form For obligations issued after March 18, 2012, portfolio interest does not include interest paid on debt that is not in registered form. 1040 long form Before March 19, 2012, portfolio interest included interest on certain registered and nonregistered (bearer) bonds if the obligations meet the requirements described below. 1040 long form Obligations in registered form. 1040 long form   Portfolio interest includes interest paid on an obligation that is in registered form, and for which you have received documentation that the beneficial owner of the obligation is not a United States person. 1040 long form   Generally, an obligation is in registered form if: (i) the obligation is registered as to both principal and any stated interest with the issuer (or its agent) and any transfer of the obligation may be effected only by surrender of the old obligation and reissuance to the new holder; (ii) the right to principal and stated interest with respect to the obligation may be transferred only through a book entry system maintained by the issuer or its agent; or (iii) the obligation is registered as to both principal and stated interest with the issuer or its agent and can be transferred both by surrender and reissuance and through a book entry system. 1040 long form   An obligation that would otherwise be considered to be in registered form is not considered to be in registered form as of a particular time if it can be converted at any time in the future into an obligation that is not in registered form. 1040 long form For more information on whether obligations are considered to be in registered form, see Portfolio interest in Publication 515. 1040 long form Obligations not in registered form. 1040 long form    For obligations issued before March 19, 2012, interest on an obligation that is not in registered form (bearer obligation) is portfolio interest if the obligation is foreign-targeted. 1040 long form A bearer obligation is foreign-targeted if: There are arrangements to ensure that the obligation will be sold, or resold in connection with the original issue, only to a person who is not a United States person, Interest on the obligation is payable only outside the United States and its possessions, and The face of the obligation contains a statement that any United States person who holds the obligation will be subject to limits under the United States income tax laws. 1040 long form   Documentation is not required for interest on bearer obligations to qualify as portfolio interest. 1040 long form In some cases, however, you may need documentation for purposes of Form 1099 reporting and backup withholding. 1040 long form Interest that does not qualify as portfolio interest. 1040 long form   Payments to certain persons and payments of contingent interest do not qualify as portfolio interest. 1040 long form You must withhold at the statutory rate on such payments unless some other exception, such as a treaty provision, applies. 1040 long form Contingent interest. 1040 long form   Portfolio interest does not include contingent interest. 1040 long form Contingent interest is either of the following: Interest that is determined by reference to: Any receipts, sales, or other cash flow of the debtor or related person, Income or profits of the debtor or related person, Any change in value of any property of the debtor or a related person, or Any dividend, partnership distributions, or similar payments made by the debtor or a related person. 1040 long form For exceptions, see Internal Revenue Code section 871(h)(4)(C). 1040 long form Any other type of contingent interest that is identified by the Secretary of the Treasury in regulations. 1040 long form Related persons. 1040 long form   Related persons include the following. 1040 long form Members of a family, including only brothers, sisters, half-brothers, half-sisters, spouse, ancestors (parents, grandparents, etc. 1040 long form ), and lineal descendants (children, grandchildren, etc. 1040 long form ). 1040 long form Any person who is a party to any arrangement undertaken for the purpose of avoiding the contingent interest rules. 1040 long form Certain corporations, partnerships, and other entities. 1040 long form For details, see Nondeductible Loss in chapter 2 of Publication 544. 1040 long form Exception for existing debt. 1040 long form   Contingent interest does not include interest paid or accrued on any debt with a fixed term that was issued: On or before April 7, 1993, or After April 7, 1993, pursuant to a written binding contract in effect on that date and at all times thereafter before that debt was issued. 1040 long form Dividend Income The following dividend income is exempt from the 30% tax. 1040 long form Certain dividends paid by foreign corporations. 1040 long form   There is no 30% tax on U. 1040 long form S. 1040 long form source dividends you receive from a foreign corporation. 1040 long form See Second exception under Dividends in chapter 2 for how to figure the amount of U. 1040 long form S. 1040 long form source dividends. 1040 long form Certain interest-related dividends. 1040 long form   There is no 30% tax on interest-related dividends from sources within the United States that you receive from a mutual fund or other regulated investment company in 2013. 1040 long form The mutual fund will designate in writing which dividends are interest-related dividends. 1040 long form Certain short-term capital gain dividends. 1040 long form   There may not be any 30% tax on certain short-term capital gain dividends from sources within the United States that you receive from a mutual fund or other regulated investment company. 1040 long form The mutual fund will designate in writing which dividends are short-term capital gain dividends. 1040 long form This tax relief will not apply to you if you are present in the United States for 183 days or more during your tax year. 1040 long form Services Performed for Foreign Employer If you were paid by a foreign employer, your U. 1040 long form S. 1040 long form source income may be exempt from U. 1040 long form S. 1040 long form tax, but only if you meet one of the situations discussed next. 1040 long form Employees of foreign persons, organizations, or offices. 1040 long form   Income for personal services performed in the United States as a nonresident alien is not considered to be from U. 1040 long form S. 1040 long form sources and is tax exempt if you meet all three of the following conditions. 1040 long form You perform personal services as an employee of or under a contract with a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in a trade or business in the United States; or you work for an office or place of business maintained in a foreign country or possession of the United States by a U. 1040 long form S. 1040 long form corporation, a U. 1040 long form S. 1040 long form partnership, or a U. 1040 long form S. 1040 long form citizen or resident. 1040 long form You perform these services while you are a nonresident alien temporarily present in the United States for a period or periods of not more than a total of 90 days during the tax year. 1040 long form Your pay for these services is not more than $3,000. 1040 long form If you do not meet all three conditions, your income from personal services performed in the United States is U. 1040 long form S. 1040 long form source income and is taxed according to the rules in chapter 4. 1040 long form   If your pay for these services is more than $3,000, the entire amount is income from a trade or business within the United States. 1040 long form To find if your pay is more than $3,000, do not include any amounts you get from your employer for advances or reimbursements of business travel expenses, if you were required to and did account to your employer for those expenses. 1040 long form If the advances or reimbursements are more than your expenses, include the excess in your pay for these services. 1040 long form   A day means a calendar day during any part of which you are physically present in the United States. 1040 long form Example 1. 1040 long form During 2013, Henry Smythe, a nonresident alien from a nontreaty country, worked for an overseas office of a U. 1040 long form S. 1040 long form partnership. 1040 long form Henry, who uses the calendar year as his tax year, was temporarily present in the United States for 60 days during 2013 performing personal services for the overseas office of the partnership. 1040 long form That office paid him a total gross salary of $2,800 for those services. 1040 long form During 2013, he was not engaged in a trade or business in the United States. 1040 long form The salary is not considered U. 1040 long form S. 1040 long form source income and is exempt from U. 1040 long form S. 1040 long form tax. 1040 long form Example 2. 1040 long form The facts are the same as in Example 1, except that Henry's total gross salary for the services performed in the United States during 2013 was $4,500. 1040 long form He received $2,875 in 2013, and $1,625 in 2014. 1040 long form During 2013, he was engaged in a trade or business in the United States because the compensation for his personal services in the United States was more than $3,000. 1040 long form Henry's salary is U. 1040 long form S. 1040 long form source income and is taxed under the rules in chapter 4. 1040 long form Crew members. 1040 long form   Compensation for services performed by a nonresident alien in connection with the individual's temporary presence in the United States as a regular crew member of a foreign vessel (for example, a boat or ship) engaged in transportation between the United States and a foreign country or U. 1040 long form S. 1040 long form possession is not U. 1040 long form S. 1040 long form source income and is exempt from U. 1040 long form S. 1040 long form tax. 1040 long form This exemption does not apply to compensation for services performed on foreign aircraft. 1040 long form Students and exchange visitors. 1040 long form   Nonresident alien students and exchange visitors present in the United States under “F,” “J,” or “Q” visas can exclude from gross income pay received from a foreign employer. 1040 long form   This group includes bona fide students, scholars, trainees, teachers, professors, research assistants, specialists, or leaders in a field of specialized knowledge or skill, or persons of similar description. 1040 long form It also includes the alien's spouse and minor children if they come with the alien or come later to join the alien. 1040 long form   A nonresident alien temporarily present in the United States under a “J” visa includes an alien individual entering the United States as an exchange visitor under the Mutual Educational and Cultural Exchange Act of 1961. 1040 long form Foreign employer. 1040 long form   A foreign employer is: A nonresident alien individual, foreign partnership, or foreign corporation, or An office or place of business maintained in a foreign country or in a U. 1040 long form S. 1040 long form possession by a U. 1040 long form S. 1040 long form corporation, a U. 1040 long form S. 1040 long form partnership, or an individual who is a U. 1040 long form S. 1040 long form citizen or resident. 1040 long form   The term “foreign employer” does not include a foreign government. 1040 long form Pay from a foreign government that is exempt from U. 1040 long form S. 1040 long form income tax is discussed in chapter 10. 1040 long form Income from certain annuities. 1040 long form   Do not include in income any annuity received under a qualified annuity plan or from a qualified trust exempt from U. 1040 long form S. 1040 long form income tax if you meet both of the following conditions. 1040 long form You receive the annuity only because: You performed personal services outside the United States while you were a nonresident alien, or You performed personal services inside the United States while you were a nonresident alien and you met the three conditions, described earlier, under Employees of foreign persons, organizations, or offices . 1040 long form At the time the first amount is paid as an annuity under the plan (or by the trust), 90% or more of the employees for whom contributions or benefits are provided under the annuity plan (or under the plan of which the trust is a part) are U. 1040 long form S. 1040 long form citizens or residents. 1040 long form   If the annuity qualifies under condition (1) but not condition (2) above, you do not have to include the amount in income if: You are a resident of a country that gives a substantially equal exclusion to U. 1040 long form S. 1040 long form citizens and residents, or You are a resident of a beneficiary developing country under Title V of the Trade Act of 1974. 1040 long form   If you are not sure whether the annuity is from a qualified annuity plan or qualified trust, ask the person who made the payment. 1040 long form Income affected by treaties. 1040 long form   Income of any kind that is exempt from U. 1040 long form S. 1040 long form tax under a treaty to which the United States is a party is excluded from your gross income. 1040 long form Income on which the tax is only limited by treaty, however, is included in gross income. 1040 long form See chapter 9. 1040 long form Gambling Winnings From Dog or Horse Racing You can exclude from your gross income winnings from legal wagers initiated outside the United States in a parimutuel pool with respect to a live horse or dog race in the United States. 1040 long form Gain From the Sale of Your Main Home If you sold your main home, you may be able to exclude up to $250,000 of the gain on the sale of your home. 1040 long form If you are married and file a joint return, you may be able to exclude up to $500,000. 1040 long form For information on the requirements for this exclusion, see Publication 523. 1040 long form This exclusion does not apply to nonresident aliens who are subject to the expatriation tax rules discussed in chapter 4. 1040 long form Scholarships and Fellowship Grants If you are a candidate for a degree, you may be able to exclude from your income part or all of the amounts you receive as a qualified scholarship. 1040 long form The rules discussed here apply to both resident and nonresident aliens. 1040 long form If a nonresident alien receives a grant that is not from U. 1040 long form S. 1040 long form sources, it is not subject to U. 1040 long form S. 1040 long form tax. 1040 long form See Scholarships, Grants, Prizes, and Awards in chapter 2 to determine whether your grant is from U. 1040 long form S. 1040 long form sources. 1040 long form A scholarship or fellowship is excludable from income only if: You are a candidate for a degree at an eligible educational institution, and You use the scholarship or fellowship to pay qualified education expenses. 1040 long form Candidate for a degree. 1040 long form   You are a candidate for a degree if you: Attend a primary or secondary school or are pursuing a degree at a college or university, or Attend an accredited educational institution that is authorized to provide: A program that is acceptable for full credit toward a bachelor's or higher degree, or A program of training to prepare students for gainful employment in a recognized occupation. 1040 long form Eligible educational institution. 1040 long form   An eligible educational institution is one that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities. 1040 long form Qualified education expenses. 1040 long form   These are expenses for: Tuition and fees required to enroll at or attend an eligible educational institution, and Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. 1040 long form These items must be required of all students in your course of instruction. 1040 long form However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses. 1040 long form Expenses that do not qualify. 1040 long form   Qualified education expenses do not include the cost of: Room and board, Travel, Research, Clerical help, or Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution. 1040 long form This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. 1040 long form Scholarship or fellowship amounts used to pay these costs are taxable. 1040 long form Amounts used to pay expenses that do not qualify. 1040 long form   A scholarship amount used to pay any expense that does not qualify is taxable, even if the expense is a fee that must be paid to the institution as a condition of enrollment or attendance. 1040 long form Payment for services. 1040 long form   You cannot exclude from income the portion of any scholarship, fellowship, or tuition reduction that represents payment for past, present, or future teaching, research, or other services. 1040 long form This is true even if all candidates for a degree are required to perform the services as a condition for receiving the degree. 1040 long form Example. 1040 long form On January 7, Maria Gomez is notified of a scholarship of $2,500 for the spring semester. 1040 long form As a condition for receiving the scholarship, Maria must serve as a part-time teaching assistant. 1040 long form Of the $2,500 scholarship, $1,000 represents payment for her services. 1040 long form Assuming that Maria meets all other conditions, she can exclude no more than $1,500 from income as a qualified scholarship. 1040 long form Prev  Up  Next   Home   More Online Publications