3.21.3 Individual Income Tax Returns

Manual Transmittal

November 14, 2023

Purpose

(1) This transmits revised IRM (Internal Revenue Manual) 3.21.3, International Returns and Documents Analysis - Individual Income Tax Returns.

Material Changes

(1) IRM 3.21.3.1.1(2) Added Form 1040-SS (sp) to the list and updated the title of the prior year Form 1040-PR.

(2) IRM 3.21.3.3(1) Updated the title of the Form 8288-A.

(3) IRM 3.21.3.4(3) Updated table for international programs to cover form name changes and new naming conventions for Spanish forms.

(4) IRM 3.21.3.4.1 - IPU 23U0441 issued 03-20-2023 - Rewrote the subsection for how to handle misblocked returns since it was both unclear and not entirely accurate.

(5) IRM 3.21.3.6.1 Added Form 1040-SS (sp) to the forms in the table in (4) and updated/clarified how to leave an action trail in (6)(g).

(6) IRM 3.21.3.6.2(5) Added Form 1040-SS (sp) to the forms for which CAS Form 13975 is used to initiate correspondence.

(7) IRM 3.21.3.7.2(11) Added the Form 4136 Schedule A to the transcribed table and deleted the Form 8917.

(8) IRM 3.21.3.7.8(4) Added new paragraph that states when to edit FPC "S" .

(9) IRM 3.21.3.8.1 Deleted the exception in (1)(e) and specified that the table in (3) applies to Forms 1040-NR (non-effectively connected).

(10) IRM 3.21.3.8.2(3) - IPU 23U0548 issued 04-25-2023 - Per request from AUSC director, stated in table that the received date should never be deleted on a return with a W-7 stamp.

(11) IRM 3.21.3.8.2(3) - IPU 23U0634 issued 05-15-2023 - Removed earlier change stating that the received date should never be deleted on a return with a W-7 stamp.

(12) IRM 3.21.3.8.2(4) - IPU 23U0548 issued 04-25-2023 - Per request from AUSC director, stated in table that the received date should never be deleted on a return with a W-7 stamp.

(13) IRM 3.21.3.8.2(4) - IPU 23U0634 issued 05-15-2023 - Removed earlier change stating that the received date should never be deleted on a return with a W-7 stamp.

(14) IRM 3.21.3.8.3(5) - IPU 23U0548 issued 04-25-2023 - Per request from AUSC director, stated in table that the received date should never be deleted on a return with a W-7 stamp.

(15) IRM 3.21.3.8.3(5) - IPU 23U0634 issued 05-15-2023 - Removed earlier change stating that the received date should never be deleted on a return with a W-7 stamp.

(16) IRM 3.21.3.9(6) Updated the website to use for foreign currency conversion.

(17) IRM 3.21.3.9.1(12) - IPU 23U0634 issued 05-15-2023 - Per request from LB&I, if a return in a Streamlined package requires Statute clearance, it will now be routed to LB&I at STOP 4305 AUSC.

(18) IRM 3.21.3.9.1.1(9) - IPU 23U0837 issued 07-19-2023 - Adjusted recently changed instructions for handling streamlined packages based on additional feedback from the pipeline.

(19) IRM 3.21.3.9.1.1(9) - IPU 23U0732 issued 06-14-2023 - Per request from the relevant LB&I manager, replaced instructions (d) and (e) with a new instruction (d), stating where to route when a Streamlined Form 1040-X is missing a cover sheet.

(20) IRM 3.21.3.10(2) Added the instruction to "X" the amount on line 35a.

(21) IRM 3.21.3.12.3.2(1) - IPU 23U0634 issued 05-15-2023 - Added a Private Mail Box (PMB) can be an AIL.

(22) IRM 3.21.3.12.3.3(2) - IPU 23U0634 issued 05-15-2023 - Added that a Private Mail Box (PMB) should be underlined as the AIL, and also added PMB to the table.

(23) IRM 3.21.3.12.3.2(3) Added the instruction to "X" the amount on Form 1040, line 35a.

(24) IRM 3.21.3.12.6(5) - IPU 23U0732 issued 06-14-2023 - Added the situation where the taxpayer enters "SAR" as the country in the caption, but "/Macau/$" must be edited.

(25) IRM 3.21.3.12.6(5) In the table, changed the proper edited name to now be "North Macedonia" instead of "Macedonia" .

(26) IRM 3.21.3.12.6(7) - IPU 23U0732 issued 06-14-2023 - Added a new paragraph to cover when the taxpayer enters "Macau China" as the country in the caption, and renumbered the subsequent paragraphs in the subsection.

(27) IRM 3.21.3.12.6(7) Added the optional spelling of Macao instead of Macau.

(28) IRM 3.21.3.13(5) Revised conditions for editing CCC "Q" to include that the filing status must be 4 or 5 and there can’t be any dependents listed on the return.

(29) IRM 3.21.3.15.1.1(4) - IPU 23U0634 issued 05-15-2023 - Revised the caution to explicitly state when and where foreign earned income needs to be edited when the taxpayer claims the foreign earned income exclusion but does not report the foreign income.

(30) IRM 3.21.3.15.1.23 - IPU 23U0837 issued 07-19-2023 - Deleted incorrect instruction for Form 1040, line 19.

(31) IRM 3.21.3.15.1.28 - IPU 23U0837 issued 07-19-2023 - Stated acceptable alternative to the Form 8288-A in (10), and updated Form 8288-A name and listed which IRM has the processing instructions in (12).

(32) IRM 3.21.3.15.1.30 - IPU 23U0837 issued 07-19-2023 - Changed references from specific IRM 3.11.3 subsection to a general reference to IRM 3.11.3 for general EIC requirements in paragraphs (7) and (8).

(33) IRM 3.21.3.15.1.30(6) - IPU 23U0837 issued 07-19-2023 - Changed income to earned income.

(34) IRM 3.21.3.15.1.30(7) Added an exception not to delete before research for a source of earned income is performed.

(35) IRM 3.21.3.15.1.31(1) - IPU 23U0634 issued 05-15-2023 - Rewrote the paragraph to more clearly state what criteria need to be met to require going to the instructions to correspond with a taxpayer in Puerto Rico that has filed a Form 1040.

(36) IRM 3.21.3.15.1.31(2) Added an instruction to continue processing a Form 1040 filed by a bona fide resident of Puerto Rico when they are reporting non-Puerto Rico source income along with claiming the additional child tax credit.

(37) IRM 3.21.3.15.1.31(4) - IPU 23U0634 issued 05-15-2023 - Changed the amount of qualifying children that require correspondence for a missing Schedule 8812 when ACTC is being claimed from one to three, and added a note that ITINs are no longer valid on a Schedule 8812.

(38) IRM 3.21.3.16.3(1) Deleted paragraph since it was not instructive and was repetitive from another relevant subsection.

(39) IRM 3.21.3.16.5(1) Deleted paragraph since it was not instructive and was repetitive from another relevant subsection.

(40) IRM 3.21.3.16.6(1) Deleted paragraph since it was not instructive and was repetitive from another relevant subsection.

(41) IRM 3.21.3.16.9 - IPU 23U0837 issued 07-19-2023 - Rewrote paragraph (3) entirely and adjusted paragraphs (4) and (5) to include possibilities that a scholarship Form 1042-S is filed by a nonresident alien who has become a resident alien for tax purposes and that a scholarship document is attached but not reported anywhere on the return.

(42) IRM 3.21.3.16.9(5) Removed the "withholding allowance" box on Form 1042-S as an amount that should reduce the gross scholarship grants in the calculation of the net scholarship grant income that is reported on Schedule 1, line 8r.

(43) IRM 3.21.3.17(3) - IPU 23U0548 issued 04-25-2023 - Removed limitation that Schedule 2, lines 11 and 12 are transcribed only starting in TY22.

(44) IRM 3.21.3.17.1(1) Added instruction for editing FPC "5" .

(45) IRM 3.21.3.17.13 Moved subsection to the prior year section of the IRM.

(46) IRM 3.21.3.18(3) Updated T-line chart for Schedule 3.

(47) IRM 3.21.3.18.5 Updated this subsection from the Residential Energy Credits to the new Residential Clean Energy Credit on Schedule 3, line 5a.

(48) IRM 3.21.3.18.6 Added this new subsection for the Energy Efficient Home Improvement Credit on Schedule 3, line 5b.

(49) IRM 3.21.3.18.7.1 Added this new subsection for the Clean Vehicle Credit on Form 1040, Schedule 3, line 6f.

(50) IRM 3.21.3.18.7.2 Added this new subsection for the Credit for Previously Owned Clean Vehicles on Form 1040, Schedule 3, line 6m.

(51) IRM 3.21.3.18.12 - IPU 23U0459 issued 03-24-2023 - Modified name of subsection to include Deemed Payment Election.

(52) IRM 3.21.3.18.13 Removed Deemed Payment Election from the heading as this claim was only included on this line for TY22. Separate instructions were moved to the prior year section.

(53) IRM 3.21.3.18.14 Moved this subsection for Credit for Qualified Sick and Family Leave Wages to the prior year section of the IRM.

(54) IRM 3.21.3.18.15 Renumbered Schedule 3, line 13d to Schedule 3, line 13b for Credit for Repayment of Earlier Year Income.

(55) IRM 3.21.3.18.15 Added new subsection for Schedule 3, line 13c for the Elective Payment Election.

(56) IRM 3.21.3.18.17 Moved this subsection for Qualified Sick and Family Leave Credits to the prior year section of the IRM.

(57) IRM 3.21.3.18.18(1) Expanded upon the instructions for when a Form 8288-A credit is claimed on Schedule 3, line 13z.

(58) IRM 3.21.3.28(2) Updated T-line chart.

(59) IRM 3.21.3.29(3) Added an example of when the TP does not intend to use Form 1116.

(60) IRM 3.21.3.31(1) - IPU 23U0021 issued 01-03-2023 - For Form 2441, added line 2d to the list of T-lines and added line 26 to the list of T-compute lines.

(61) IRM 3.21.3.32(1) Updated the T-line chart for the Form 3800.

(62) IRM 3.21.3.33 Since the sequence number of Form 4136 changed, moved this subsection to its proper place in sequence.

(63) IRM 3.21.3.42.1(1) Corrected the IRC section that is cited regarding the maximum foreign earned exclusion.

(64) IRM 3.21.3.42.2(1) Changed row 6 of table to state, "longest qualifying period," instead of "entire period."

(65) IRM 3.21.3.42.2(2) - IPU 23U0634 issued 05-15-2023 - Revised first bullet to explicitly state when and where foreign earned income needs to be edited when the taxpayer claims the foreign earned income exclusion but does not report the foreign income.

(66) IRM 3.21.3.42.2(3) - IPU 23U0634 issued 05-15-2023 - Revised first bullet to explicitly state when and where foreign earned income needs to be edited when the taxpayer claims the foreign earned income exclusion but does not report the foreign income.

(67) IRM 3.21.3.42.5 Added a new paragraph (3) to define physical presence with examples, and added a new last row to the table in (8).

(68) IRM 3.21.3.42.5(1) - IPU 23U0548 issued 04-25-2023 - Added countries to the table for which a waiver of the minimum time requirements may be claimed for TY22.

(69) IRM 3.21.3.42.5(1) Moved list of countries in the note for which taxpayer can claim a waiver of minimum time requirements for TY22 to the prior year section. The list of countries for TY23 won’t be released until 2024.

(70) IRM 3.21.3.47 Adjusted the instructions to include the Schedule H (sp), which is new for TY23, along with the Schedule H-PR for prior years.

(71) IRM 3.21.3.48(3) Added an instruction to continue processing a Form 1040 filed by a bona fide resident of Puerto Rico when they are reporting non-Puerto Rico source income along with claiming the additional child tax credit.

(72) IRM 3.21.3.48(4) Updated the boxes that report Social Security and Medicare tax withheld on the Form 499R-2/W-2PR to boxes 21 and 23.

(73) IRM 3.21.3.49(1) - IPU 23U0634 issued 05-15-2023 - Updated the T-Lines in the table.

(74) IRM 3.21.3.49(2) - IPU 23U0634 issued 05-15-2023 - Rewrote the paragraph to more clearly state what criteria need to be met to require correspondence with a taxpayer in Puerto Rico that has filed a Form 1040.

(75) IRM 3.21.3.59 Deleted subsection for Form 8917 since it has been obsoleted.

(76) IRM 3.21.3.66 Updated the Form 8936 subsection as the form was revised for TY23.

(77) IRM 3.21.3.67 Added new subsection for Form 8936 Schedule A instructions.

(78) IRM 3.21.3.67.1 Added new subsection for Form 8936 Schedule A, line 10 instructions.

(79) IRM 3.21.3.72 Added new subsection for Form 5695 instructions.

(80) IRM 3.21.3.72.1 Added new subsection for Form 5695, line 10 instructions.

(81) IRM 3.21.3.75(2) Added an instruction to renumber a TY22 and prior Form 4136 Sequence Code to "79."

(82) IRM 3.21.3.79.1(1)(a) Per counsel, changed filing requirement threshold from, "more than $400," to, "$400 or more."

(83) IRM 3.21.3.79.1.1(1) - IPU 23U0634 issued 05-15-2023 - Rewrote the paragraph to more clearly state what criteria need to be met to require correspondence with a taxpayer in Puerto Rico that has filed a Form 1040, but appears to have no U.S. tax filing obligation.

(84) IRM 3.21.3.79.1.1(2) - IPU 23U0634 issued 05-15-2023 - Rewrote the paragraph to more clearly state what criteria need to be met to require correspondence with a taxpayer in Puerto Rico that has filed a Form 1040, apparently only to claim the ACTC.

(85) IRM 3.21.3.79.2 - IPU 23U0244 issued 02-07-2023 - Changed line 1 to line 1a in (2b), and expanded on where IRC 933 income needs to be deleted in (8).

(86) IRM 3.21.3.79.2(6) Clarified that a schedule has to be dummied for each Schedule C or F whose income is being excluded under IRC 933.

(87) IRM 3.21.3.80(1) Advised that the Form 1040-PR has been renamed to Form 1040-SS (sp) starting in TY23, but that all instructions in this IRM for Form 1040-SS in English also apply to Forms 1040-SS (sp) and 1040-PR in Spanish.

(88) IRM 3.21.3.80.1 Updated the T-lines and T-Compute lines for the two pages of the TY23 Form 1040-SS. Deleted the T-line paragraphs for pages 3 and 4 that are no longer present with the form.

(89) IRM 3.21.3.80.1(2)(c) Per counsel, changed filing requirement threshold from, "more than $400," to, "$400 or more."

(90) IRM 3.21.3.80.1.1(3) Added an instruction to continue processing a Form 1040 filed by a bona fide resident of Puerto Rico when they are reporting non-Puerto Rico source income.

(91) IRM 3.21.3.80.2(1) Deleted exception per counsel.

(92) IRM 3.21.3.80.3.2(1) Revised to indicate that ACTC was changed to RCTC for TY21 only.

(93) IRM 3.21.3.80.3.2(3) Updated IRM 3.11.3 reference.

(94) IRM 3.21.3.80.3.3 Rewrote this subsection since Part V is no longer part of the Form 1040-SS. The Schedule SE must be used instead starting with TY23.

(95) IRM 3.21.3.80.3.4 Changed subsection heading and paragraph (1) to reflect that Schedule H-PR is now Schedule H (sp) starting in TY23.

(96) IRM 3.21.3.80.3.10 Combined (1) and (2) into a new (1) that stated the name change from ACTC to RCTC for TY21 only.

(97) IRM 3.21.3.80.3.10(5) Updated the line number from where the ACTC is taken on the TY23 Form 1040-SS.

(98) IRM 3.21.3.80.4.1 Changed the name of the subsection based on the new line number for TY23.

(99) IRM 3.21.3.80.4.2 Rewrote the subsection based on the new line number for the TY23 Form 1040-SS.

(100) IRM 3.21.3.81.2 Throughout this subsection, updated the indicator of a return sent by the USVI from a transmittal from the USVI BIR to a "U.S. Claim" stamp in the top margin of the return.

(101) IRM 3.21.3.81.4.3 Added new subsection for the new Part II, line 13f line on the TY23 Form 1040-SS.

(102) IRM 3.21.3.81.5 Added a new subsection for the Schedule C when attached to a Form 1040-SS.

(103) IRM 3.21.3.81.5.9(1) Updated where to edit the SE Method Code from the dotted portion of line 9 in the old Form 1040-SS, Part V to the bottom-center margin of Schedule SE, Page 1.

(104) IRM 3.21.3.81.6 Added a new subsection for the Schedule F when attached to a Form 1040-SS.

(105) IRM 3.21.3.81.7(1) Added a chart for the T-lines for the Schedule SE when attached to a Form 1040-SS.

(106) IRM 3.21.3.82(2) Updated the website to use for foreign currency conversion.

(107) IRM 3.21.3.82.2(6) Added the editing of the SSN when dummying a Schedule C or F when income from the schedule is being excluded under IRC 933.

(108) IRM 3.21.3.82.3(2) In the last row of the table, added the deletion of the Form 1040.

(109) IRM 3.21.3.82.11(3) Added an exception for the calculation of tax on Social Security income for residents of Switzerland.

(110) IRM 3.21.3.83.2(3) - IPU 23U0548 issued 04-25-2023 - Added lines 1z and 25d to the chart as T-Compute lines.

(111) IRM 3.21.3.83.6(4) Revised conditions for editing CCC "Q" to include that the filing status must be 4 or 5 and there can’t be any dependents listed on the return.

(112) IRM 3.21.3.83.7.1 Combined the footnotes at the bottom of the table in (2) and corrected the IRM 3.11.3 reference. Also, corrected the IRM 3.11.3 reference in (7).

(113) IRM 3.21.3.83.8.1(1) Reorganized, rewrote, and corrected the table to include only editing amounts to Form 1040-NR, line 1a.

(114) IRM 3.21.3.83.8.1(2) Created a new table to include only editing misplaced entries to lines other than Form 1040-NR, line 1a.

(115) IRM 3.21.3.83.8.1(2) Deleted the old paragraph (2) as the information was already covered in the tables.

(116) IRM 3.21.3.83.8.6(6) - IPU 23U0244 issued 02-07-2023 - Rewrote (a) and (b) to clarify and also to reference the correct lines when disallowing treaty exempt income.

(117) IRM 3.21.3.83.8.14(5) Updated the title of the Form 8288-A in the correspondence literal in the table.

(118) IRM 3.21.3.83.8.16(3) Removed the words, "adjust or," from the exception.

(119) IRM 3.21.3.83.9.3(1) Removed the words, "adjust or," from the exception.

(120) IRM 3.21.3.83.10.1(4) For the first exception, added the Schedule A line numbers to which the state and local taxes should be dummied.

(121) IRM 3.21.3.83.12.1(5) Revised paragraph by stating not to correspond for the Schedule NEC when there is an entry on line 23a due only to editing.

(122) IRM 3.21.3.83.13.4(3) - IPU 23U0837 issued 07-19-2023 - Updated the reference for Form 8288-A credit verification instructions and stated the acceptable alternative document to the Form 8288-A.

(123) IRM 3.21.3.83.13.4(3) Changed "FIRPTA Database" to "INTLWebApps Database."

(124) IRM 3.21.3.83.13.5(1) Corrected the note to state that Form 1042-S withholding should be edited from the Form 1042-S box, "Total withholding credit."

(125) IRM 3.21.3.83.13.5(2) - IPU 23U0244 issued 02-07-2023 - Changed a "caution" to an "exception" .

(126) IRM 3.21.3.83.13.11(3) - IPU 23U0459 issued 03-24-2023 - Added instructions for when Deemed Payment Elections are made.

(127) IRM 3.21.3.83.19.2(1) Updated to make sure alimony reported on Schedule 1, line 2a is always edited to a T-line.

(128) IRM 3.21.3.83.19.9 - IPU 23U0837 issued 07-19-2023 - Provided more specifics in paragraph (3) and covered when a scholarship document is attached but not reported anywhere on the return in paragraph (5).

(129) IRM 3.21.3.83.19.9(5) Removed the "withholding allowance" box on Form 1042-S as an amount that should reduce the gross scholarship grants in the calculation of the net scholarship grant income that is reported on Schedule 1, line 8r.

(130) IRM 3.21.3.83.21.5 Updated this subsection from the Residential Energy Credits to the new Residential Clean Energy Credit on Schedule 3, line 5a.

(131) IRM 3.21.3.83.21.6 Added this new subsection for the Energy Efficient Home Improvement Credit on Schedule 3, line 5b.

(132) IRM 3.21.3.83.21.12 - IPU 23U0459 issued 03-24-2023 - Added instructions for handling claims of a Deemed Payment Election.

(133) IRM 3.21.3.83.21.14 Stipulated that this non-transcribed old line 13b for Qualified Sick and Family Leave Wages is only valid for TY21 and TY22.

(134) IRM 3.21.3.83.21.15 Renumbered Schedule 3, line 13d to Schedule 3, line 13b for Credit for Repayment of Earlier Year Income.

(135) IRM 3.21.3.83.21.17 Stipulated that this non-transcribed line 13h for Qualified Sick and Family Leave Wages is only valid for TY21 and TY22.

(136) IRM 3.21.3.83.23.1(1) Updated where professional gambling income is reported since Schedule C income moved to Schedule 1.

(137) IRM 3.21.3.83.23.1(6) Added an exception in the case of a professional gambler.

(138) IRM 3.21.3.84.13.11(3) Moved the instructions for a DPE claim for Form 1040-NR, line 31 to the prior year section for TY22 only.

(139) IRM 3.21.3.84.21.7.1 Added this new subsection for the Clean Vehicle Credit on Form 1040-NR, Schedule 3, line 6f.

(140) IRM 3.21.3.84.21.7.2 Added this new subsection for the Credit for Previously Owned Clean Vehicles on Form 1040-NR, Schedule 3, line 6m.

(141) IRM 3.21.3.84.22.3(5) Updated the conditions for which Audit Code "C" is edited.

(142) IRM 3.21.3.84.22.7(1) Expanded upon the Schedule K-1 definition per counsel.

(143) IRM 3.21.3.85.1(4) Added SPC "Y" as a code that should not be edited on prior year returns.

(144) IRM 3.21.3.85.3.2.2 Added a new subsection in the Form 1040 prior year instructions for Schedule 2, line 19.

(145) IRM 3.21.3.85.3.2.3 Added a new subsection in the Form 1040 prior year instructions for Schedule 3, line 5a.

(146) IRM 3.21.3.85.3.2.4 Added a new subsection in the Form 1040 prior year instructions for Schedule 3, line 13a, Deemed Payment Election.

(147) IRM 3.21.3.85.3.2.4 - IPU 23U0021 issued 01-03-2023 - Added new subsection for prior year Form 2441 in order to edit a required line number change.

(148) IRM 3.21.3.85.3.2.5 Added a new subsection in the Form 1040 prior year instructions for Schedule 3, line 13b.

(149) IRM 3.21.3.85.3.2.5 Moved list of countries for which taxpayer can claim a waiver of minimum time requirements for TY22 to this prior year subsection along with the maximum foreign earned income exclusion for TY22.

(150) IRM 3.21.3.85.3.2.6 Added a new subsection in the Form 1040 prior year instructions for Schedule 3, line 13g.

(151) IRM 3.21.3.85.3.2.6 Added the optional spelling of Macao instead of Macau in paragraphs (5) and (6).

(152) IRM 3.21.3.85.3.2.7 Added a new subsection in the Form 1040 prior year instructions for Schedule 3, line 13h.

(153) IRM 3.21.3.85.3.4.5 Added a new subsection for Form 1040-NR, line 1a stating when to edit SPC "E" on TY21 and prior year returns.

(154) IRM 3.21.3.85.3.4.5(3) Deleted step (b) that stated to edit remaining scholarship and fellowship grant to Schedule 1, line 8r, as it is already covered in (4).

(155) IRM 3.21.3.85.3.4.7(3) Removed the "withholding allowance" box on Form 1042-S from the table as an amount that should be used in the calculation of line 10c on Forms 1040-NR for TY21 and prior.

(156) IRM 3.21.3.85.3.5.2(1) Added the phrase, "current or prior year," to the last row, first column of the table.

(157) IRM 3.21.3.85.6(2) Added the instruction to delete the amount on line 35a.

(158) IRM 3.21.3.86.2(3) Updated the T-Line chart for pages 1 and 2 of the Form 1040-NR. This included adding line 10c for TY21 and prior to match the instructions that were already given for line 10c in the prior year section.

(159) IRM 3.21.3.86.3.2.13 Moved the subsection for TY 22 and prior Form 8936 to the prior year section.

(160) IRM 3.21.3.86.4.2 Moved the instructions for a DPE claim for Schedule 3, line 31 to the prior year section for TY22 only.

(161) IRM 3.21.3.86.7.2 Added this new prior year subsection for the Qualified Plug-In Motor Vehicle Credit on Form 1040, Schedule 3, line 6f.

(162) IRM 3.21.3.86.10.1(3) Added a row to the table for FS QSS.

(163) IRM 3.21.3.86.13.8 Changed the requirement to correspond from at least 1 to at least 3 qualifying children.

(164) IRM 3.21.3.86.14 Wrote the entire subsection for processing TY22 and prior Forms 1040-PR and 1040-SS.

(165) IRM 3.21.3.86.14.6.9(1) Updated where to edit the SE Method Code from the dotted portion of line 9 in Form 1040-SS, Part V to the bottom-center margin of Form 1040-SS, Page 4 or Schedule SE, Page 1.

(166) IRM 3.21.3.86.15.12 Added a new subsection for prior year instructions for Form 1040-NR, line 31.

(167) IRM 3.21.3.86.15.13 Added a new subsection for prior year instructions for Form 1040-NR, Schedule 3, line 5.

(168) IRM 3.21.3.86.15.14 Added this new prior year subsection for the Qualified Plug-In Motor Vehicle Credit on Form 1040-NR, Schedule 3, line 6f.

(169) IRM 3.21.3.86.15.15 Added a new subsection for prior year instructions for Form 1040-NR, Schedule 3, line 13a.

(170) IRM 3.21.3.86.15.16 Added a new subsection for prior year instructions for Form 1040-NR, Schedule 3, line 13b.

(171) IRM 3.21.3.86.15.17 Added a new subsection for prior year instructions for Form 1040-NR, Schedule 3, line 13g.

(172) IRM 3.21.3.86.15.18 Added a new subsection for prior year instructions for Form 1040-NR, Schedule 3, line 13h.

(173) IRM 3.21.3.86.16(4) Changed the lines to which Form 1040-NR-EZ, lines 5 and 8 are renumbered or converted along with the referenced subsections.

(174) IRM 3.21.3.86.16.1(2) Changed the referenced subsections for Form 1040-NR-EZ, lines 5 and 8.

(175) IRM 3.21.3.87.3 Rewrote the "caution" to reflect the current process.

(176) IRM 3.21.3.88.3.4.2 Added the exception to not edit CCC "Y" if CCC "3" has been edited and to "X" the amount on Form 1040-NR, line 35a.

(177) Exhibit 3.21.3-1 Updated that FPC "R" is now edited when Form 8990, 8992, 8993, or 8994 is attached to a Form 1040-SS or Form 1040-PR.

(178) Exhibit 3.21.3-1 - IPU 23U0279 issued 02-17-2023 - Added Letters 5216, 5447C, 5747C, and 6167C to attachment guide.

(179) Exhibit 3.21.3-1 - IPU 23U0837 issued 07-19-2023 - Made a change to the names of the Forms 8288 and 8288-A.

(180) Exhibit 3.21.3-7 Added the optional spelling of Macao instead of Macau.

(181) Exhibit 3.21.3-7 Added the optional country name of North Macedonia instead of Macedonia.

(182) Exhibit 3.21.3-15 Replaced the old Form 13900 CAS sheet with a revised Form 13900 CAS sheet along with an instruction page.

(183) Exhibit 3.21.3-16 Replaced the old Form 13975 CAS sheet with a revised Form 13975 CAS sheet along with an instruction page.

(184) IRM 3.21.3 Made editorial changes and annual changes, such as dates, tax years, line numbers, tolerances, and maximum claimable amounts to reflect current year specifics throughout this IRM.

Effect on Other Documents

IRM 3.21.3, dated November 15, 2022 (effective January 1, 2023), is superseded. This IRM incorporates the following IRM Procedural Updates (IPUs), issued January 3, 2023 through July 19, 2023: 23U0021, 23U0244, 23U0279, 23U0441, 23U0459, 23U0548, 23U0634, 23U0732, and 23U0837.

Audience

Wage and Investment, Code and Edit Tax Examiners

Effective Date

(01-01-2024)

James L. Fish
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. Purpose: The Document Perfection Operation, Code & Edit unit, prepares paper returns for processing by reviewing and editing the documents with specialized processing codes for use downstream. This Internal Revenue Manual (IRM) provides instructions for coding and editing international individual income tax returns for transcription and validation. IRM 3.11.3, Individual Income Tax Returns, must be used for ALL International returns. When specific international processing instructions are not provided in IRM 3.21.3, tax examiners will use the general processing instructions in IRM 3.11.3.

  2. Audience: Tax examiners in the Wage and Investment Division (W&I), Austin Service Center, Code & Edit Units are the primary users of this IRM.

  3. Policy Owner: The Director of Submission Processing is responsible for the policies in this IRM.

  4. Program Owner: The Code & Edit/ERS IMF Section of the Paper Processing Branch of Submission Processing is responsible for the procedures and all updates related to this IRM.

  5. Primary Stakeholders: Submission Processing (SP).

  6. Program Goals: To timely review and edit all returns received in Code & Edit (C&E).

Background

  1. This section of the Internal Revenue Manual (IRM) provides instructions for coding and editing individual income tax returns for transcription and validation. Special codes are used to perform specific functions. Editing is necessary because many returns are incomplete, contain invalid or misplaced entries, or are computed incorrectly.

  2. This IRM contains instructions for processing international returns using the following form types:

    • Form 1040, U.S. Individual Income Tax Return

    • Form 1040 (sp), Declaración de Impuestos de los Estados Unidos Sobre los Ingresos Personales

    • Form 1040-SR, U.S. Tax Return for Seniors

    • Form 1040-SR (sp), Declaración de Impuestos de los Estados Unidos para Personas de 65 Años de Edad o Más

    • Form 1040A, U.S. Individual Income Tax Return (TY17 and prior)

    • Form 1040EZ, Income Tax Return for Single and Joint Filers with No Dependents (TY17 and prior)

    • Form 1040-NR, U.S. Nonresident Alien Income Tax Return

    • Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents (TY19 and prior)

    • Form 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico)

    • Form 1040-SS (sp), Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

    • Form 1040-PR, Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico) (TY22 and prior)

    • Supporting forms and schedules for the forms listed above

    Reminder:

    IRM 3.11.3, Individual Income Tax Returns, must be used to process returns when specific instructions are not provided in this IRM.

Authority

  1. Authority for these procedures is found in the following sections of the Internal Revenue Code and their corresponding Treasury regulations:

    • IRC 6201(a)

    • IRC 6213(b)

    • IRC 6402(a)

    • IRC 6511

  2. Policy Statements for Submission Processing are contained in IRM 1.2.1, Servicewide Policy Statements.

Responsibilities

  1. The Submission Processing Director is responsible for monitoring operational performance for the Service Center.

  2. The Document Perfection Operations Manager is responsible for monitoring operational performance for the Code and Edit operation.

  3. The Code & Edit Team Managers and Leads are responsible for performance monitoring and ensuring tax technicians have the tools to perform their duties.

  4. The tax technicians are responsible for following the instructions contained in this IRM, including all IRM procedural updates (IPU) posted to the SERP (Servicewide Electronic Research Program) website.

Program Management and Review

  1. Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Code & Edit reports.

  2. Program Effectiveness: The program goals are measured by the following reviews:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  3. Annual Review: The processes included in this manual are reviewed annually to ensure accuracy and promote consistent tax administration.

Terms and Definitions

  1. See Exhibit 3.21.3-20 for the glossary of frequently used terms.

Related Resources

  1. International Job Aid 2513-701, Coding and Editing International Income Tax Returns, was developed as a reference guide for this manual. This manual refers the tax examiner to clarifying information or exhibits in the Job Aid, where appropriate. When conflict between any referenced material and the IRM instructions occurs, the IRM instructions take precedence.

IRM Deviations

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2, Internal Management Documents System - Internal Revenue Manual (IRM) Process, IRM Standards, and elevated through appropriate channels for executive approval.

International Returns

  1. International tax returns are identified by the presence of one of the following:

    • An address outside the 50 United States and Washington D.C.

      Exception:

      This does not include APO(Army/Air Post Office)/DPO (Diplomatic Post Office)/FPO (Fleet Post Office) addresses

    • Form 390 (American Samoa), American Samoa Individual Income Tax Return

    • Form 482.0/Formulario 482 (Puerto Rico), Planilla de Contribución Sobre Ingresos de Individous

    • Form 1040CM (CNMI), Commonwealth of the Northern Mariana Islands Territorial Individual Income Tax

    • Form 1040 GUAM, Guam Individual Income Tax Return

    • Form W-2 from American Samoa (W-2AS)

    • Form W-2 from CNMI (W-2CM)

    • Form W-2 from Guam (W-2GU)

    • Form W-2 from Virgin Islands (W-2VI)

    • Form 499R-2/W-2PR (Puerto Rico Withholding)

    • Form 1040-NR, U.S. Nonresident Alien Income Tax Return

    • Form 1040-NR-EZ, U.S. Income Tax Returns for Certain Nonresident Aliens With No Dependents

    • Form 1040-PR, Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

    • Form 1040-SS, U.S. Self-Employment Tax Return

    • Form 1040-SS (sp), Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

    • Form 1042-S, Form SSA-1042S, or Form RRB-1042S

    • Form 2555, Foreign Earned Income

    • Form 2555-EZ, Foreign Earned Income Exclusion

    • Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

    • Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons

    • Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands

    • Form 8804, Annual Return for Partnership Withholding Tax Under Section 1446

    • Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax

    • Form 8813, Partnership Withholding Tax Payment

    • Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

    • Form 8854, Initial and Annual Expatriation Information Statement

    • Form 8898, Statement for Individuals Who Begin or End Bona Fide Residency in a United States Possession

    • Form 14653, Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures

    • Form 14654, Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures

    • Dual Status (any of the following):
      - Form 1040 and Form 1040-NR filed together for the same tax year

      Note:

      Do not treat as Dual Status if Form 1040 is filed with 1040-NR Schedule OI attached.


      - "Dual Status" or "D/S" indicated on the return
      - Taxpayer claims part year residence and part year non-residence.

      Caution:

      Always leave Form 1040 and Form 1040-NR for the same taxpayer together.

    • Nonresident Alien (NRA): Either primary or both taxpayers are Nonresident Aliens

      Exception:

      Do not treat as a nonresident alien if the primary taxpayer is a Nonresident Alien (NRA) without a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) and the secondary taxpayer has an SSN/ITIN and is reporting income.

    • International Tax Treaty: taxpayer indicating exemption or exclusion of tax and/or income due to an International Tax Treaty

      Exception:

      Do not treat as international if the taxpayer claims exemption due to an American Indian treaty and no other international condition exists.

    • Treaty Trader

    • Fulbright Grantee

    • IRC 871, IRC 893, IRC 911, IRC 913, IRC 931, IRC 932, IRC 933, IRC 934 or IRC 935 is notated anywhere on the return

    • Notation of "Streamlined" on the return or other Streamlined certification

    • "Relief for Certain Former Citizens" , "Relief" , "Expat" , "FAQ 24" , "FAQ 25" , or something similar is written on return and/or attachments

    • Copy of Certificate of Loss of Nationality (CLN) is attached

    • Taxpayer specifically mentions "Relief" , "Former Citizen" , "Expatriate process" , "FAQ 24" , "FAQ 25" , or something similar in an attached letter

    Caution:

    If none of the International conditions listed above are present, consider it a domestic return and process it accordingly.

  2. If a return has any of the following characteristics and does not have an LB&I stamp indicating LB&I has already reviewed it, route the return to Stop 4301 AUSC:

    • "Relief for Certain Former Citizens", "Relief", "Expat", “FAQ 24”, “FAQ 25”, or something similar is written on return and/or attachments.

    • Form 8854 is attached.

    • Copy of Certificate of Loss of Nationality (CLN) is attached.

    • Taxpayer specifically mentions "Relief", "Former Citizen", "Expatriate process", “FAQ 24”, “FAQ 25”, or something similar in an attached letter.

    • Form 8898 is attached.

  3. Do not treat returns that convert income paid in foreign currency to U.S. currency as international returns unless additional international criteria are present.

    Example:

    Canadian dollars converted to U.S. dollars

  4. If a numbered return assigned international File Location Code (FLC) 20 or 21 does not meet the definition of an international return, edit Action Code "610" to have a new Document Locator Number (DLN) assigned.

Form 1042 and Form 1042-S

  1. Form 1042 and Form 1042-S are used by withholding agents to report tax withheld at the source on certain income paid to foreign persons (nonresident alien individuals, foreign partnerships, foreign corporations or foreign trusts and estates) that is not effectively connected with the conduct of a trade or business in the United States. Form 1042-S is a withholding document that identifies, by type, income that is subject to U.S. tax withholding and that is paid to nonresident aliens by U.S. payers.

  2. See Exhibit 3.21.3-2, Form 1042-S Income Codes, to determine where the provided Income Code is to be reported on Form 1040-NR.

  3. If Form 1042-S is attached to Form 1040:

    If And Then
    Refund return and the only income is from the Form 1042-S Both are true:
    • Taxpayer does not state they are a U.S. resident alien, and

    • Taxpayer does not provide a copy of their resident alien card.

    Correspond for the filer's U.S. status using Form 9143, box 24.
    Refund return and the only income is from the Form 1042-S Either is true:
    • Taxpayer states they are a U.S. resident alien, or

    • Taxpayer does provide a copy of their resident alien card.

    1. Delete Form 1042-S withholding from line 25d

    2. Edit Form 1042-S withholding to the dotted portion of line 33.

    Worldwide income is reported or the return is other than a refund  
    1. Delete Form 1042-S withholding from line 25d

    2. Edit Form 1042-S withholding to the dotted portion of line 33.

International Filers Overview

  1. Individuals may be expected to file international returns for a variety of conditions. More than one condition may be met by a single taxpayer. Generally:

    • Taxpayers who are treated as resident aliens file Form 1040.

    • Taxpayers who are treated as nonresident aliens file Form 1040-NR.

      Note:

      Special filing requirements often apply to U.S. territories.

  2. U.S. citizens living/traveling outside of the United States: They are generally required to file U.S. income tax returns on which they must report their worldwide income.

  3. Resident Alien: A foreign individual who meets either the green card test or the substantial presence test for the calendar year.

  4. Nonresident Alien: A foreign individual who does not meet either the green card test or the substantial presence test for the calendar year, unless:

    1. They choose to be treated as a resident alien for part of the calendar year by making the First-Year Choice (see IRM 3.21.3.3.2 (12), or

    2. They are a nonresident married to a U.S. citizen or resident alien. They and their spouse may be able to make a joint election under IRC 6013(g) or (h) to treat the individual as a resident alien for the entire calendar year. See IRM 3.21.3.3.2 (12) and IRM 3.21.3.3.2 (13) below.

  5. Green Card Test: The individual is a resident alien once they are issued a Permanent Resident Card, also known as a green card as a lawful permanent resident of the U.S. Lawful permanent residency continues unless revoked or determined to be abandoned. A lawful permanent resident may be treated as a nonresident alien for U.S. income tax purposes if they are both a U.S. resident alien and a resident of a foreign country under its laws. In this situation, the taxpayer would claim treatment as a resident of the foreign country under the tie-breaker rules of an income tax treaty.

  6. Substantial Presence Test: The individual is treated as a resident alien for the calendar year if they are physically present for at least:

    1. 31 days during the current calendar year; and

    2. 183 days during the 3-year period that includes the current calendar year and 2 calendar years immediately before that, counting:
      1) All the days of physical presence in the calendar year,
      2) 1/3 of days of physical presence in the first year prior to the current calendar year, and
      3) 1/6 of the number of days of physical presence in the second year prior to the current calendar year.

  7. Exceptions to the Substantial Presence Test: The following days of presence in the United States do not count for the substantial presence test:

    • Days commuting to work in the United States from a residence in Canada or Mexico if they "commute regularly." They "commute regularly" if they commute to work in the United States on more than 75% of the workdays during a working period in the current year.

    • Days in the United States for less than 24 hours when in transit between two places outside the United States.

    • Days in the United States as a crew member of a foreign vessel engaged in transportation between the United States and a foreign country or a U.S. territory.

      Note:

      This exception doesn't apply if otherwise engaged in any trade or business in the United States on those days.

    • Days they intended to leave, but couldn't leave the United States because of a medical condition or medical problem that arose while in the United States. Whether they intended to leave the United States on a particular day is determined based on all the facts and circumstances.

      Note:

      See IRM 3.21.3.41.5 for information on determining physical presence.

    • Days the individual is an "exempt individual."

  8. Exempt Individuals for the Substantial Presence Test: An individual is an "exempt individual" if any of the following are true:

    • An individual is temporarily present in the United States as a foreign government-related individual under an A or G visa.

      Exception:

      Excludes household staff of a foreign government-related individual present in the United States under an A-3 or G-5 visa.

    • A teacher or trainee temporarily present in the United States under a J or Q visa. See IRM 3.21.3.3.2 (9) and IRM 3.21.3.3.2 (10) for additional information.

    • A professional athlete temporarily present in the United States to compete in a charitable sports event.

  9. An individual is not an exempt individual as a teacher or trainee if they were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years, unless all are true:

    • The individual was exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years

    • A foreign employer paid all compensation during the current year

    • They were present in the United States as a teacher or trainee in any of the prior 6 years

    • A foreign employer paid all compensation during each of the preceding 6 years the individual was present in the United States as a teacher or trainee.

  10. A student temporarily present in the United States under an F, J, M, or Q visa is not an exempt individual as a student in the current year if they have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless both are true:

    • The individual establishes that they do not intend to reside permanently in the United States.

    • They substantially complied with the requirements of their visa.

  11. Closer Connection Exception: Individuals who meet the substantial presence test may still be treated as nonresident aliens if all of the following are true:

    1. They are present in the United States for fewer than 183 days during the current calendar year

    2. They maintain a tax home in a foreign country during the year

    3. They have a closer connection to that country than to the United States

    4. They timely file Form 8840, Closer Connection Exception Statement for Aliens, claiming to have a closer connection to a foreign country or countries.

      Note:

      An individual may not claim a closer connection to a foreign country if they have applied for status as a lawful permanent resident of the United States or have an application pending for adjustment of status. Some tax treaties provide special rules for determining residency.

  12. First-Year Choice: A foreign individual who does not meet the green card test or the substantial presence test may be treated as a resident alien for part of a calendar year by making the First-Year Choice.

  13. Married to a U.S. citizen or resident alien: A foreign individual who does not meet the green card test or substantial presence test may be able to choose to be treated as a resident alien if the individual is a nonresident alien married to a U.S. citizen or resident alien, the individual and their spouse may be able to make a joint election under IRC 6013(g) or (h).

  14. Individuals from a U.S. Territory:

    1. American Samoa, see IRM 3.21.3.76.

    2. Guam, see IRM 3.21.3.77.

    3. Commonwealth of Northern Mariana Islands, see IRM 3.21.3.78.

    4. U.S. Virgin Islands, see IRM 3.21.3.79.

    5. Puerto Rico, see IRM 3.21.3.80.

  15. Effectively Connected Income: Nonresident aliens are taxed on both:

    1. U.S. source income if the U.S. tax due has not been fully withheld

    2. Income effectively connected with a U.S. trade or business.

  16. Tax Treaties: The U.S. has income tax treaties with a number of countries. Under these treaties, nonresident aliens who are residents of the foreign country may be taxed at a reduced rate or exempt from U.S. income taxes on certain types of income from sources in the United States. An individual is a resident of a foreign country under an income tax treaty if they are treated as a resident under the domestic laws of that country for income tax purposes. Some treaties include requirements beyond citizenship to establish residency for treaty purposes, such as physical presence within the purported residence country. See IRM 3.21.3.83.7 for more information about tax treaties.

  17. Dual-Status Taxpayers: An individual who is both a resident alien and nonresident alien in the United States within the same tax year. This usually occurs in the year the taxpayer arrived in or departed from the United States. The taxpayer will submit both Form 1040 and Form 1040-NR with Dual-Status Return written across the top of the return for the tax year. The form filed as the return is based on the taxpayer's residence on the last day of the year.

    1. If the individual is a resident of the U.S. on the last day of the tax year, they will file Form 1040 with a statement attached (such as a Form 1040-NR) for the portion of the year that they were a nonresident alien.

    2. If the individual is not a resident of the U.S. on the last day of the tax year, they will file Form 1040-NR with a statement attached (such as a Form 1040) for the portion of the year they were a resident alien.

  18. U.S. Citizens and U.S. Resident Aliens Living Abroad Who Qualify for the IRC 911 Foreign Earned Income Exclusion: A taxpayer who meets the specific requirements of IRC 911(b)(2)(D) may claim an exclusion of foreign earned income up to the maximum allowed for the tax year and either the housing exclusion or the housing deduction if the taxpayer has a tax home in a foreign country or countries and the taxpayer is one or more of the following:

    1. A U.S. citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period (regardless of physical presence) that includes an entire taxable year

    2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty with an applicable nondiscrimination clause, and who is a bona fide resident of a foreign country for an uninterrupted period that includes an entire year

    3. A U.S. resident alien who has been physically present in a foreign country or countries for 330 days during a period of 12 consecutive months

Visas Overview

  1. A U.S. visa allows a foreigner to live permanently in the United States (immigrant visa) or travel to the United States on a temporary basis for specific purposes and periods of time (nonimmigrant visa). See Exhibit 3.21.3-8 for a list of nonimmigrant visa types.

  2. Most, but not all, nonimmigrant visa holders are taxed as nonresident aliens.

    1. A nonresident alien is taxed on all United States source income and on all income that is effectively connected with the conduct of a trade or business in the United States. Unlike U.S. citizens, nonresident aliens are not taxed on non-effectively connected foreign source income.

    2. Resident aliens are generally taxed on worldwide income, like U.S. citizens.

U.S. Income Reporting Requirements Overview

  1. United States citizens and resident aliens: They are generally required to file Form 1040 and must report 100% of their worldwide income. Worldwide income is income from ALL sources, including foreign and U.S. income reported on Form 1040, lines 1a through 7 and Schedule 1, lines 1 through 9. For information on identifying resident aliens, see IRM 3.21.3.3.2, International Filers Overview.

  2. Nonresident Aliens: They are generally required to file Form 1040-NR to report only:

    • U.S. source income, if the amount of tax withheld didn't satisfy the tax due

    • Income effectively connected with a U.S. trade or business

  3. A nonresident alien not otherwise engaged in a U.S. trade or business is not required to report U.S. source income that was withheld properly at the source or any foreign source income that is not effectively connected with a U.S. trade or business, but may file to claim a refund for overpaid taxes. Generally, income received from U.S. payers constitutes U.S. source income. Income received from foreign payers may also constitute U.S. source income in certain circumstances, such as income received for services performed in the U.S. or income received for the use of intangibles in the U.S.

    Exception:

    U.S. tax laws exempt nonresident aliens from U.S. taxation on interest earned on certain deposits, which are not effectively connected with a trade or business.

  4. U.S. source income is reported on Form 1042-S, Form W-2, Form SSA-1042S, Form RRB-1042S, Form 1099 series, Form 8805, Form 8288-A, or a statement of income.

  5. U.S. source income which is not effectively connected with a U.S. trade or business is generally taxed at 30% unless a tax treaty exists between the U.S. and the taxpayer's foreign country of residence that either reduces the rate or exempts the income.

  6. When Scholarship/Fellowship grant income is paid to a nonresident alien from a country that does not have a tax treaty with the United States:

    • It is not exempted.

    • It is reported on Form 1042-S and attached to the return, if paid by a U.S. payor.

    • It must be reported on Schedule 1, line 8r.

    • If the individual is a "degree candidate," amounts paid to a qualified educational institution for tuition and education related expenses (such as fees, books, supplies, and equipment) may be omitted from Schedule 1, line 8r, so that only part of the scholarship is reported.

    • If the individual is not a "degree candidate," the full amount of the scholarship or fellowship is generally taxable.

  7. When Scholarship/Fellowship grant income is paid to a resident alien (because of the substantial presence test) or nonresident alien who was a resident of a tax treaty country immediately before coming to the U.S. to study:

    • It may be fully or partly excluded under a tax treaty.

    • It is reported on Form 1042-S and attached to the return, if paid by a U.S. payor.

    • It must be reported on Schedule 1, line 8r, if taxable, or on Form 1040-NR, line 1k, if exempt by treaty.

    • Schedule OI, Question "L," must be answered.

    • The validity of the tax treaty benefit claimed must be verified.

Form 1040 with Schedule 1 and Form 2555 or Form 2555-EZ Attached

  1. For processing instructions, see IRM 3.21.3.41.

  2. Form 2555 is valid for all tax years. Form 2555-EZ is valid for TY18 and prior.

  3. Form 2555 must be attached if any of the following indicators are on Form 1040 or Schedule 1:

    • IRC 911 exclusion

    • Notation of Form 2555 or Form 2555-EZ

    • Foreign Housing Exclusion on Schedule 1, line 8d

    • Foreign Earned Income Exclusion on Schedule 1, line 8d

    • Foreign Housing Deduction on Schedule 1, line 24j

  4. A taxpayer with foreign earned income is entitled to claim the following on Form 2555:

    • Foreign Earned Income Exclusion (Part VII and VIII), and/or

    • Housing Deduction, if housing is paid for with earnings from self-employment (Parts VI and IX), or

    • Housing Exclusion, if housing is paid for with employer-provided amounts, such as wages, housing allowance, etc.(Parts VI and VIII).

  5. A U.S. citizen or U.S. resident alien living and working in a foreign country may use Form 2555 to:

    1. Exclude a limited amount of their foreign earned income. For TY 2023, this amount is $120,000. See IRM 3.21.3.86.11 (1) for prior year amounts.

    2. Claim a housing exclusion or deduction.

  6. For TY18 and prior, a U.S. citizen or U.S. resident alien living and working in a foreign country may use Form 2555-EZ if:

    1. They have earned wages/salaries in a foreign country below the maximum allowable for the year. See IRM 3.21.3.86.12.1 (1) for prior year amounts.

    2. They did not have any income from self-employment.

    3. They did not have any business or moving expenses for the year.

    4. They are not claiming the housing exclusion or deduction.

    5. They are filing a calendar-year return that covers a 12 month period.

  7. Foreign earned income is any income earned for personal services performed in a foreign country or countries. For this purpose, a foreign country is any territory under the sovereignty of a government other than the United States.

    Note:

    It does not include U.S. territories.

  8. Unearned income may not be excluded on Form 2555 or Form 2555-EZ. To avoid double taxation, foreign taxes paid on the unearned foreign income can be:

    1. Claimed as a credit on Form 1116, or

    2. Reported as a deduction on Schedule A, line 6.

  9. U.S. citizens and resident aliens living and working outside the United States are generally required to file a U.S. income tax return to report worldwide income.

  10. In general, to qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction under IRC 911, taxpayers must be:

    1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes both an entire tax year and part of the year of the return.

    2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes both an entire tax year and a part of the year of the return, or

    3. A U.S. citizen or resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months that includes part of the year of the return.

    Note:

    Due to additional taxpayer requirements, taxpayers may also reference the tax home test, or indicate that the exclusion was prorated based on the qualifying period.

  11. Wages paid by the U.S. government to its employees are not foreign earned income, and an individual cannot claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction on those wages.

U.S. Territories - General Information

  1. The following are the five key U.S. Territories:

    1. American Samoa (AS)

    2. Commonwealth of Northern Mariana Islands (CNMI)

    3. Guam (GU)

    4. Puerto Rico (PR)

    5. United States Virgin Islands (USVI)

  2. Special tax rules apply to bona fide residents of these five key territories. The taxpayer must be a United States citizen or resident alien and a bona fide resident of one of AS, CNMI, GU, PR, or the USVI. A bona fide resident of one of these territories is an individual taxpayer who:

    • Does not have a tax home outside the relevant territory.

    • Does not have a closer connection to the United States or to a foreign country.

    • Meets the presence test. To satisfy the presence test for the entire year, the taxpayer must meet ONE of the conditions in the table below.

    Bona Fide Residence Presence Test for United States Territories
    Present in the relevant territory for at least 183 days during the tax year.
    Present in the relevant territory for at least 549 days during the three-year period consisting of the current taxable year and the preceding two tax years, provided the taxpayer was also present in the territory for at least 60 days during each tax year of the three-year period.
    Present in the United States for no more than 90 days during the tax year.
    Earned income (pay for personal services performed, such as wages, salaries or professional fees) from the United States of no more than $3,000.00 and was present for more days in the territory than the U.S. during the tax year.
    No significant connection to the U.S. during the tax year. Significant connections include a permanent home, voter registration, or spouse/minor child in the United States.

    Note:

    It is often difficult to determine bona fide residency based on the test above. Therefore, for purpose of processing income tax returns, if the only address on the return or attachments (including Form W-2 type statements) is that of a territory, treat as an indication that the taxpayer is a bona fide resident of that territory.

  3. Taxpayers who reside in any U.S. territory are generally not entitled to claim Earned Income Credit (EIC). See IRM 3.21.3.15.1.30.

  4. U.S. Service Members / Military Personnel: A service member's "state of legal residence" generally determines their residency for tax purposes. For non-tax purposes, U.S. service members have two types of "residency" : "home of record" and "state of legal residence."

    • A service member's "home of record" is the state where they joined the military and it is used to determine certain military benefits (for example, travel allowance back to the state when leaving the military).

    • A service member's "state of legal residence" is their permanent home, the state where they intend to live after leaving the military. All service members declare their state of legal residence with the Department of Defense or equivalent.

  5. Under the Service members Civil Relief Act of 2003 (SCRA), if a service member qualifies as a bona fide resident of a U.S. Territory in an earlier tax year, their absence from that territory during the current tax year in compliance with military orders will not affect their status as a bona fide resident. Similarly, being in a territory solely in compliance with military orders will not qualify a service member for bona fide residency status in that territory.

  6. Service Members Civilian Spouses / Military Spouses: In accordance with Military Spouses Residency Relief Act of 2009 (MSRRA), civilian spouses of active duty U.S. Service Members can choose to keep their prior residence or domicile for tax purposes. Under the MSRRA, if civilian spouses qualify as bona fide residents of a U.S. territory in an earlier tax year, their absence from that territory during the current year when accompanying the service member spouse who is relocating under military orders will not affect the civilian spouse's status as a bona fide resident. Similarly, being in a territory solely to accompany the service member in compliance with military orders will not qualify the civilian spouse for bona fide resident status in that territory. For additional guidance on when and how MSRRA applies to civilian spouses who are working in or claiming tax residency in a U.S. territory, see Notice 2010-30, Notice 2011-16 and Notice 2012-41.

Control of International Returns

  1. Unnumbered returns are batched according to the type of return. The type of return determines the File Location Code (FLC) where like returns are batched together for processing under a certain program code.

  2. International Returns will be assigned the following FLCs:

    1. FLC 20 will be assigned to any Form 1040, Form 1040-SR, Form 1040A (TY17 and prior), or Form 1040EZ (TY17 and prior) with any International criteria other than U.S. territories, including Form 2555 or Form 2555-EZ (TY18 and prior), and Form 1040-NR or Form 1040-NR-EZ (TY19 and prior).

    2. FLC 21 will be assigned to any Form 1040-PR or Form 1040-SS.

    3. FLC 21 will be assigned to any Form 1040, Form 1040-SR, Form 1040A (TY17 and prior), or Form 1040EZ (TY17 and prior) with any U.S. territory criteria as follows:

    • Territory address in the caption area

    • IRC 931

    • IRC 932

    • IRC 933

    • IRC 934

    • IRC 935

    • Form W-2AS, Form W-2GU, Form W-2VI, Form W-2CM, 499R-2/W-2PR

    • Form 4563

    • Form 5074

    • Form 8689

    • Form 8898

      Exception:

      All returns that have a valid Form 2555 or Form 2555-EZ (TY18 and prior) must be blocked under FLC 20.

  3. The following table contains the international programs worked in Code & Edit (C&E):

    Program Description
    46110 Form 1040 (Form 1040-SR) OTFP Current Year
    46112 Form 1040 (Form 1040-SR) Prior Year
    46114 Form 1040 (Form 1040-SR) Non Refund Current Year
    46115 Form 1040 (Form 1040-SR) - Dual-Status
    46116 Form 1040 Conversions
    46117 Form 1040 (Form 1040-SR) - Streamlined Filing Compliance Procedures
    46120 Form 1040-NR (Effectively Connected) Current Year
    46123 Form 1040-SS/Form 1040-SS (sp) - RIVO
    46124 Form 1040-NR (Effectively Connected) Prior Year
    46127 Form 1040-SS (sp)/1040-PR OTFP Current and Prior Year
    46128 Form 1040-SS OTFP Current and Prior Year
    46129 Form 1040-NR - Dual-Status
    46140 Form 1040-NR (Non-Effectively Connected) Current Year
    46142 Form 1040-NR (Non-Effectively Connected) Prior Year
    46145 Form 1040-NR - Dual-Status
    46160 Form 1040-NR (sp) (Effectively Connected) Current Year
    46170 Form 1040 (Form 1040-SR) ITIN Current Year
    46172 Form 1040 (Form 1040-SR) ITIN Prior Year
    46175 Form 1040 (Form 1040-SR) ITIN - RIVO Current Year
    46180 Form 1040-NR (sp) (Non-Effectively Connected) Current Year
    46185 Form 1040-NR (sp) (Non-Effectively Connected) - Dual-Status
    46220 Form 1040 (Form 1040-SR) Full Paid Current Year
    46227 Form 1040-SS (sp) Full Paid Current Year
    46228 Form 1040-SS Full Paid Current Year
    46280 Form 1040-NR (sp) Full Paid
    46810 Form 1040 (sp) (Form 1040-SR (sp)) OTFP Current Year
    46812 Form 1040 (sp) (Form 1040-SR (sp)) OTFP Prior Year
    46870 Form 1040 (sp) (Form 1040-SR (sp)) ITIN Current Year
    46872 Form 1040 (sp) (Form 1040-SR (sp)) ITIN Prior Year
    46910 Form 1040 (sp) (Form 1040-SR (sp)) Full Paid
    47810 Form 1040 (sp) (Form 1040-SR (sp)) ITIN OTFP Current Year
    47812 Form 1040 (sp) (Form 1040-SR (sp)) ITIN OTFP Prior Year

Misblocked International Returns

  1. All returns in a batch of work must belong in the international program in which they are batched. A misblocked return is a return found in a batch of work of a program in which it does not belong.

  2. For unnumbered misblocked returns, remove for rebatching. This includes when an unnumbered return is found in a numbered batch.

  3. For numbered misblocked returns, do not remove from a batch. Edit Action Code "610" , and attach Form 4227 indicating the action needed.

    Note:

    A return with a valid Form 2555 or Form 2555-EZ must be blocked under File Location Code (FLC) 20.

Uncomputed Returns

  1. An uncomputed return is one filed by a taxpayer who expects the IRS to compute their tax. Do not confuse an uncomputed return with a return where the taxpayer has computed no tax due.

  2. An uncomputed return can be identified when:

    1. Form 1040, Form 1040-SR, or Form 1040-NR has no entries on Lines 16, 17, 18, 22, 24, 34, 35a, 36, and 37.

    2. Form 1040-PR or Form 1040-SS has no entries on lines 6, 13, 14a, 15, and 16.

General Instructions for All International Forms

  1. The general instructions for all International returns are provided here. The general instructions in this section include:

    • Stamping Tax Examiner (TE) numbers

    • Action Trails

    • Attachments

    • Detached Documents

  2. Use Form 1040 instructions when processing Form 1040-SR, 1040(SP), and 1040-SR(SP)

  3. Form 1040A and Form 1040EZ are historical and must be converted to Form 1040.

  4. Form 1040-NR-EZ is valid for TY19 and prior only. Convert all Forms 1040-NR-EZ to Forms 1040-NR.

  5. Form 1040, Schedules 4, 5, and 6 are valid for TY18 only.

Stamping Tax Examiner (TE) Numbers

  1. For complete instructions, see IRM 3.11.3.3.1.

Action Trail

  1. For all international returns, see IRM 3.11.3.3.5 and Job Aid 2513-701 for complete instructions.

Attachments to Returns

  1. Examine all attachments to the return. Leave the attachments with the return unless specifically instructed otherwise. Refer to the Attachment Guide in Exhibit 3.21.3-1 for specific attachment-by-attachment instructions. Research either an attachment or a notation on the return, as appropriate.

    Note:

    If an attachment is not found in Exhibit 3.21.3-1, refer to Exhibit 3.11.3-1.

  2. For additional instructions, see IRM 3.11.3.3.6.

Detached Documents

  1. Always leave an Action Trail on the return when an attachment is removed.

    Example:

    When a form or letter is detached from a return, notations such as "Det F1040-X" or "Det TP correspondence" must be made on the tax return.

  2. An Action Trail must also be written on the detached document (unless it is an original document).

  3. The following must always be edited on all detached items:

    • Tax period of the return in "YYMM" format

    • Form from which detached

  4. All of the following must be present or edited on all detached items:

    • Current date if current year return processed before ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, otherwise use the received date in "MMDDYY" format

      Note:

      For ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on a timely return with no received date, edit a date of "041524"

    • Taxpayer Name(s)

    • Primary/Secondary taxpayer’s identification number(s)

    • Taxpayer’s address

International Correspondence Procedures

  1. Correspondence is necessary when a return cannot be processed because it is incomplete or illegible. To determine all correspondence issues, you must use both IRM 3.11.3 and IRM 3.21.3 and follow line-by-line instructions.

  2. When the first correspondence condition is identified, correspond for all missing required forms, schedules, and/or withholding documentation, regardless of correspondence tolerances identified in the line-by-line instructions.

    Exception:

    Only correspond for Form 1116, Form 8283, Schedule 8812, and Schedule EIC when the tolerance in line-by-line IRM instructions is met.

  3. Do Not Correspond With A Taxpayer More Than One Time.

    Exception:

    Code & Edit will correspond a second time if the taxpayer sends back a return with a signature not located in the appropriate Sign Here area under the jurat. The taxpayer's signature must appear in the space provided under the jurat, unless the taxpayer arrowed their own signature to the appropriate place.

  4. For additional instructions, see IRM 3.11.3.5.1.

Correspondence When Sending Returns Back to the Taxpayer

  1. Signature Issues: A valid signature is an original signature that appears below a jurat statement.

    Exception:

    A signature is valid if the taxpayer arrows their own signature to the appropriate place.

  2. When the first correspondence condition is identified, correspond for all missing required forms, schedules, and/or withholding documentation, regardless of correspondence tolerances identified in the line-by-line instructions.

    Exception:

    Only correspond for Form 1116, Form 8283, Schedule 8812, and Schedule EIC when the tolerance in line-by-line IRM instructions is met.

  3. Route secured returns with a missing or invalid signature to Collections. Do not correspond.

  4. Returns missing a valid signature(s) will be sent back to the taxpayer via the following:

    Tax Form Correspondence Type
    Form 1040 Form 9143
    Form 1040-SR Form 9143
    Form 1040 (sp) Form 9143
    Form 1040-SR (sp) Form 9143
    Form 1040-NR Form 9143
    Form 1040-NR-EZ (TY19 and prior) Form 9143
    Form 1040A (TY17 and prior) Form 9143
    Form 1040EZ (TY17 and prior) Form 9143
    Form 1040-SS Form 13557 (English side)
    Form 1040-SS (sp) Form 13557 (Spanish side)
    Form 1040-PR (TY22 and prior) Form 13557 (Spanish side)

    Exception:

    Do not mail back numbered returns, disaster returns, Streamlined Filing Compliance Procedures returns, or signed returns missing documentary evidence.

  5. Sending other returns back to the taxpayer: The following table provides situations when the return should be sent back to the taxpayer:

    If Correspondence Issue Is: Then:
    Misfiled returns: a business (BMF) return filed on individual (IMF) tax form See IRM 3.11.3.6.2.16
    Loose Schedule H for TY24 Correspond with Notice 1208
    Current year loose Schedule H received on or before 04/15/2024 Correspond with Notice 1207
    Early filed Form 8288-A: Date of Transfer is for TY24 See IRM 3.21.3.15.1.28
    Missing or invalid signature See "Signature Issues" above
    Filer's U.S. status: Form 1040 with Form 1042-S See IRM 3.21.3.3.1 and IRM 3.21.3.15.1.28
    Filer’s U.S. status: Form 1040-NR indicating resident in the U.S. all year See IRM 3.21.3.83
    Form 1040-PR or Form 1040-SS filed with a U.S. Form W-2 See IRM 3.21.3.81
    Bona fide Puerto Rico resident with no U.S. filing requirement See IRM 3.21.3.80.1.1
    Bona fide Puerto Rico resident claiming Additional Child Tax Credit (Form 1040 or Form 1040A (2017 and prior)) See IRM 3.21.3.80.1.1
    Article XXV of the U.S.-Canada Income Tax Treaty claimed on Form 1040 and missing Form 1040-NR See IRM 3.21.3.15

  6. When sending the return back to the taxpayer for correspondence:

    1. Line through your TE number

    2. Remove Form 3471-E and any other internal documents, if attached

      Note:

      If second correspondence is required, remove the original Form 9143 or Form 13557.

    3. Do not detach attachments.

    4. Delete any IRS Received Date.

    5. If the address is missing, illegible or incomplete, perfect from an attached envelope or from a TY18 Schedule 6. If unable to perfect, research.

    6. If an international address and domestic address are both present, circle out International address and perfect the domestic address.

    7. When sending the return back for a missing or invalid signature, or for a missing or invalid signature plus additional items, edit an Action Trail indicating, Returned for Signature, the correspondence form used, and the boxes or items requested (e.g., Returned for Signature, F9143 - 1, 4, 13, MMDDYY). Do not edit an Action Trail if only a misfiled return is being sent back to the taxpayer.

      Note:

      The date may be edited or stamped following local procedures.

    8. Stop editing the return.

    9. Complete Form 9143 or Form 13557.

    10. Attach the correspondence sheet to the return immediately below the caption area.

    11. Remove the return from the batch and place it in the designated area.

  7. When preparing Form 9143 or Form 13557:

    1. Write legibly to ensure that the taxpayer understands what information is being requested.

    2. Check the appropriate box(es).

    3. Complete all information required for each paragraph ( e.g., forms, lines, amounts, etc.).

    4. Edit money amounts in dollars and cents. Bracket negative amounts.

Correspondence When Not Sending Returns Back to the Taxpayer

  1. Complete all possible editing and identify all correspondence issues, when you are not sending the return back to the taxpayer.

  2. When the first correspondence condition is identified, correspond for all missing required forms, schedules, and/or withholding documentation, regardless of correspondence tolerances identified in the line-by-line instructions.

    Exception:

    Only correspond for Form 1116, Form 8283, Schedule 8812, and Schedule EIC when the tolerance in line-by-line IRM instructions is met.

  3. If the address is missing, illegible, or incomplete:

    1. Perfect from an attached envelope.

    2. If unable to perfect from an attached envelope, research.

    3. If an address cannot be found after research, see paragraph 4.

  4. When an address cannot be found through research:

    • Do not correspond.

    • Edit the local Campus address in the Caption area.

    • Follow No Reply instructions. See IRM 3.21.3.6.4.

  5. A correspondence action sheet (CAS) is a form used to generate a letter requesting information from a taxpayer. A CAS is used with a return that is not sent back to the taxpayer. The following CAS forms are used:

    1. Form 13900 is used to generate Letter 4087C (International and Streamlined Filing Compliance Procedures returns). See Exhibit 3.21.3-15.

    2. Form 13975 is used to generate Letter 2894C for Form 1040-SS and Letter 2894C-SP for Form 1040-SS (sp) and Form 1040-PR (TY22 and prior) (International returns). See Exhibit 3.21.3-16.

    3. Form 3696-A is used to generate miscellaneous Correspondex (C) letters (e.g., Letter 369C used to deny reasonable cause).

  6. Prepare Form 13900 (Letter 4087C) or Form 13975 (Letter 2894C/Letter 2894C-SP) using the following steps:

    1. Write legibly.

    2. Check all appropriate boxes.

    3. Complete all information required for each paragraph selected (e.g., forms, lines, amounts, etc.)

    4. Edit money amounts in dollars and cents. Bracket negative amounts.

    5. On prior year returns only, edit the tax year in YYYY format in field (04).

    6. Always select the fax number paragraph applicable to your campus for paper returns.

  7. Prepare the CAS, and attach to the tax return face-up below the caption area.

  8. Edit Action Code "215" on all returns requiring correspondence if the return is not being mailed back to the taxpayer, unless Action Code "300" can be edited.

  9. If a received date is required and not present on the return, edit the received date before corresponding and see IRM 3.21.3.8 for received date editing instructions.

Replies to Correspondence

  1. Move all correspondence sheets to the back of the return. If second correspondence is required, remove Form 9143 or Form 13557.

  2. Ensure that the return has been perfected. See the Correspondence Action Table at IRM 3.21.3.6.5 for instructions to process "no reply" , "undeliverable" , and "incomplete reply" correspondence.

  3. Edit the received date on returns identified as Returned for Signature; following the instructions in IRM 3.21.3.8.1 (6).

  4. For additional "No Reply" instructions, see IRM 3.11.3.5.3.2.

No Reply/Incomplete Reply/Undeliverable Correspondence

  1. Move all correspondence sheets to the back of the return. If second correspondence is required, remove Form 9143 or Form 13557.

  2. Use the Correspondence Action Table and continue processing the return if any of the following are true:

    • Taxpayer does not provide ALL required information.

    • Correspondence is returned by the USPS as "undeliverable."

    • One or more correspondence conditions were not included when the first correspondence was sent.

  3. Edit CCC "U" on all no reply returns, except when either:

    1. The correspondence was not required, or

    2. One or more correspondence conditions were not included when the first correspondence was sent.

  4. When the correspondence sheet (Form 9143 or Form 13557) is not attached, assume all correspondence conditions were included when the correspondence was sent unless there is evidence to the contrary.

  5. If a no reply correspondence condition is not identified in IRM 3.21.3.6.5, Correspondence Action Table, edit CCC "U" and take no further action.

  6. If CCC "3" is required, edit it first.

Correspondence Action Table

  1. Form 1040:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Article XXV of the U.S.-Canada Income Tax Treaty and Form 1040-NR not attached Convert to Form 1040-NR.
    Bona fide resident of Puerto Rico filing Form 1040 or Form 1040A (TY17 and prior) "X" any exclusion pertaining to IRC 933 and continue processing.
    Line 25d - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form W-2, Form 1042-S, Form 8805, Form 8288-A and/or Form 8959 are not attached "X" line 25d.

    Caution:

    If a letter is attached signed by the U.S. Competent Authority, accept the letter as proof of Form 1042-S withholding and do not "X" line 25d.

    Line 25d - Early-filed Form 8288-A and Form 843 is not attached "X" line 25d.
    Line 25d - Filer’s U.S. Status and Form 1040-NR not attached Move amount on line 25d to dotted portion of line 33.
    Line 25d - SSA-1042S or RRB-1042S attached and no green card and/or declaration statement attached "X" line 25d.
    Line 33 (dotted portion) - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8689 is not attached "X" line 33.
    Loose Schedule H - Cannot determine if Schedule H should be filed loose or attached to a Form 1040
    • Process Schedule H with a dummied Form 1040. See IRM 3.11.3 and IRM 3.21.3.47.

    • If signature or documentary evidence missing, also edit CCC "3" .

    Loose Schedule H (sp) - Cannot determine if Schedule H (sp) should be filed loose or attached to a Form 1040-SS (sp)
    • Process Schedule H (sp) with a dummied Form 1040-SS (sp). See IRM 3.21.3.47.

    • If signature or documentary evidence missing, also edit CCC "3" .

  2. Schedule 1:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Schedule 1, Line 9 - Form 2555 or Form 2555-EZ (TY18 and prior) is not attached and one or more of these indications are present:
    • IRC 911

    • Notation of Form 2555 or Form 2555-EZ (TY18 and prior)

    • Foreign Earned Income Exclusion (Schedule 1, line 8d)

    • Foreign Housing Exclusion (Schedule 1, line 8d)

    • Foreign Housing Deduction (Schedule 1, line 24j)

    1. "X" Schedule 1, line 9 and line 25, and

    2. Edit CCC "U" .

    Note:

    If there is no other foreign aspect of the return, rebatch the coded return as domestic.

    Schedule 1, Line 9 - Incomplete Treaty information "X" Schedule 1, line 9 and ensure amount is present on line 1a, Form 1040.
    Schedule 1, Line 9 - IRC 893 and the number of the Executive Order and written evidence not attached "X" Schedule 1, line 9.
    Schedule 1, Line 9 - Sec. "965" noted and "IRC 965 Transition Tax Statement" is not attached
    • Edit RPC "F" .

    • TY17 only: also edit Action Code "300" .

  3. Form 2555 and Form 2555-EZ (TY18 and prior):

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    If any of the following are missing or incomplete:
    • page 1

    • page 2

    • page 3

    1. "X" Schedule 1, line 9 and line 25,

    2. "X" Form 2555 or Form 2555-EZ (TY18 and prior), and

    3. Edit CCC "U"

    Note:

    If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Bona Fide Residence or Physical Presence Dates are missing
    1. "X" Schedule 1, line 9 and line 25,

    2. "X" Form 2555 or Form 2555-EZ (TY18 and prior), and

    3. Edit CCC "U" .

    Note:

    If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Taxpayer enters beginning and ending dates that do not include part of the tax year of the return
    1. "X" Schedule 1, line 9 and line 25,

    2. "X" Form 2555 or Form 2555-EZ (TY18 and prior), and

    3. Edit CCC "U" .

    Note:

    If the deleted Form 2555 or Form 2555-EZ (TY18 and prior) is the only foreign aspect of the return, rebatch the coded return as domestic.

    Joint return with an indication each spouse has their own income and only one Form 2555 or Form 2555-EZ (TY18 and prior) is attached
    1. "X" Schedule 1, line 9 and line 25,

    2. "X" Form 2555 or Form 2555-EZ (TY18 and prior), and

    3. Edit CCC "U" .

    Note:

    If the deleted Form 2555 or Form 2555-EZ (TY18 and prior) is the only foreign aspect of the return, rebatch the coded return as domestic.

    Exception:

    If the joint filers are a missionary team, divide the income equally between the two filers on separate Forms 2555.

  4. Form 2555-EZ Only (TY18 and prior):

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Form 2555-EZ (TY18 and prior) is attached and any of the following is claimed:
    • Foreign earned income is more than the maximum allowed for the tax year

    • Self-employment income

    • Business/moving expenses

    • Foreign housing exclusion or deduction

    • Other than a calendar year return that covers a 12-month period

    1. "X" Schedule 1, line 9 and line 25,

    2. "X" Form 2555-EZ (TY18 and prior), and

    3. Edit CCC "U" .

    Note:

    If the deleted Form 2555 or Form 2555-EZ (TY18 and prior) is the only foreign aspect of the return, rebatch the coded return as domestic.

  5. Form 4563 or IRC 931:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Form 1040 indicates IRC 931 or Income from American Samoa and Form 4563 is not attached
    1. "X" Schedule 1, line 9 and line 25, and

    2. Edit CCC "U" .

  6. Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Form W-2 attached and Form 1040 not filed Convert.
    Part I, line 3 has an amount and Schedule SE or Part V is missing
    1. Divide Self-Employment Tax amount by .153 to determine the subtotal amount.

    2. Divide the subtotal amount by .9235 to determine the total self-employment income amount.

    3. Prepare a dummy Schedule SE for the primary taxpayer if the Social Security Wages are $160,200 or less for TY23.

      Note:

      For prior year, see IRM 3.21.3.86.14

      .

    4. Edit the total self-employment income amount on Schedule SE, line 3.

    Part I, line 4 has an amount, and Schedule H, Schedule H (sp), or Schedule H-PR is not attached. "X" Part I, line 4.
    All are true:
    • Part I, line 12 has a non-zero amount

    • The dotted line by Part I, line 12 has an indication of "Form 8959"

    • Form 8959 is not attached

    "X" Part I, line 12.
    One Schedule SE or Part V is submitted for 2 taxpayers
    1. Divide Self-Employment Tax amount by .153 to determine the subtotal amount.

    2. Divide the subtotal amount by .9235 to determine the total self-employment income amount.

    3. Prepare a dummy Schedule SE for the primary taxpayer if the Social Security Wages are $160,200 or less for TY23.

      Note:

      For prior year, see IRM 3.21.3.86.14

      .

    4. Edit the total self-employment income amount on Schedule SE, line 3.

  7. Form 1040-NR, Page 1:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Filed for two taxpayers: Two names present, two incomes reported, and two signatures
    1. Circle out secondary taxpayer,

    2. Edit CCCs "3" , "U" , and "Y" , and

    3. Edit action trail: "no reply two taxpayers."

    Invalid treaty information provided, or taxpayer does not reference a valid treaty benefit
    1. "X" the exclusion amount,

    2. Ensure the amount is included in lines 1a - 9, and

    3. Edit CCC "U" .

  8. Form 1040-NR, Page 2:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Line 25d is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and supporting Form W-2 series, Form 1099 series, Form 4852, Form 8959, or supporting documentation is not attached "X" line 25d.

    Note:

    DO NOT edit CCC "U" .

    Line 25e - Section 1446 credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8805 or similar withholding document is not attached "X" line 25e.

    Note:

    DO NOT edit CCC "U" .

    Line 25f - Entry is present and Form 8288-A is not attached "X" line 25f.

    Note:

    DO NOT edit CCC "U" .

    Line 25f - Early-filed Form 8288-A and Form 843 is not attached "X" line 25f.

    Note:

    DO NOT edit CCC "U" .

    Line 25g shows an entry and Form 1042-S, Form SSA-1042S, or Form RRB-1042S is not attached "X" line 25g.

    Note:

    DO NOT edit CCC "U" .

    Caution:

    If a letter is attached signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not "X" line 25g.

  9. Form 1040-NR, Schedule A (Sequence 7A - Itemized Deductions):

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Line 3 -
    • Amount present more than $500 and Form 8283 is not attached

    • $20,000 or more, Art indicated on Form 8283, and separate appraisal not attached

    • $500,000 or more, and separate appraisal not attached

    • Form 8283, page 2, has significant entries but not signed

    "X" Line 3.
    Line 6 - Entry is present and Form 4684 is not attached
    1. "X" line 6, and

    2. Edit CCC "U" .

  10. Form 1040-NR, Schedule NEC (Sequence 7B - Tax on Income Not Effectively Connected With a U.S. Trade or Business)

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Cannot determine correct country of permanent address
    1. Multiply the gross not effectively connected income (sum of 13a, 13b, 13c, and 13d) by 30%, and

    2. Edit the result to Form 1040-NR, page 2, line 23a.

  11. Dual-Status Returns:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    If a determination cannot be made about which return to process or the "Dual-Status Statement" is missing Edit CCC "U" , and do one of the following:
    1. When both Form 1040, and Form 1040-NR or Form 1040-NR-EZ are present, process Form 1040-NR, or convert Form 1040-NR-EZ to Form 1040-NR and process, as the "Dual Status Return," and use the Form 1040 as the "Dual Status Statement."

    2. When only one form is present, always process as a Form 1040-NR.

      Note:

      Dummy Form 1040-NR, if missing.

    Filing Status Code (FSC) is 2 and both taxpayers have income
    1. Circle out the name of the secondary taxpayer,

    2. Edit CCCs "3," "U," and "Y," and

    3. Edit action trail: "no reply with two incomes."

  12. Form SSA-1042S and/or Form RRB-1042S:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Withholding claimed and no U.S. documentation submitted
    1. "X" withholding amount and income where found,

    2. Edit CCCs "3," "U," and "Y," and

    3. Edit action trail: "SSA/RRB-1042S."

  13. For additional no reply instructions, see IRM 3.11.3.5.3.2.

Editing for ALL International Returns

  1. Editing prepares returns and attachments for transcription and computer processing.

  2. In addition to the following subsections, see IRM 3.11.3.4.1 - 3.11.3.4.2.6.

Transcription Lines (T-Lines) and Transcription Compute Lines (T-Compute Lines)

  1. For complete instructions, see IRM 3.11.3.3.2.

Sequence of Transcribed Schedules and Forms

  1. In the upper-right margin of each form or schedule is a preprinted number called a sequence code. The Integrated Submission and Remittance Processing (ISRP) operators transcribe forms and schedules by their sequence code. ISRP sequence codes range from 01 through 79.

  2. Any form or schedule with a sequence number between 01 and 79 that is not transcribed must be deleted. See the table in IRM 3.21.3.7.2 (11) for a list of the sequence codes for all transcribed schedules and forms.

  3. Delete any document, form, or schedule that will not be transcribed when there is a transcribed form/schedule after it. For a large number of non-transcribed forms, "X" the top page and combine the remaining pages together with a rubber band, staple, or clip. Leave all non-transcribable forms/schedules intact after the last transcribed page.

    Note:

    Form 8938, Statement of Specified Foreign Financial Assets is transcribed in a separate program. Refer to Exhibit 3.21.3-1

    .

  4. Delete any form that shares a sequence number with a transcribed form.

    Note:

    Examples include, but are not limited to, the following:

    Form or Schedule Sequence Number
    Form 2106 54A (TY07 and prior)
    Form 3468 52 (TY09 and prior)
    Form 3903 62 (TY10 and prior)
    Form 4563 68 (TY18 and prior)
    Form 5884-B 65
    Form 8621 69
    Form 8801 74 (TY19 and prior)
    Form 8829 66 (TY09 and prior)
    Form 8862 43A
    Form 8949 12A (TY18 and prior)
    Schedule D-1 12A (TY10 and prior)

  5. "X" a transcribed schedule or form if it is blank or has no significant T-line entries, unless specifically instructed otherwise.

    Exception:

    Do not "X" Form 8938 when there are no significant entries on T-Lines.

  6. If any schedule or form is attached with "Alt Min Tax" , "AMTCR" , "AMT" or "Alternative Minimum Tax" or similar statement notated across the top, "X" the form or schedule.

  7. Delete duplicate forms or schedules with identical amounts that are filed for the same taxpayer.

  8. For transcribed forms or schedules with multiple pages, ensure the pages are together and in the proper order (page 1, page 2, etc.).

  9. Arrange Schedules 1 through 3 in sequential order behind Form 1040 or Form 1040-NR. When processing Form 1040-NR, keep Schedule A, Schedule NEC, and Schedule OI together as page 1, page 2, and page 3 of Sequence 07.

    Exception:

    When a transcribed form or schedule is found on the back side of Form 1040 or Form 1040-NR, it is not necessary to photo copy and move behind Schedules 1-3.

  10. Leave Form W-2, Form 1099, other U.S. withholding documents, Form 1040-V, taxpayer statements, deposit slips, small forms, or other items where they were found, if they do not obstruct T-lines or any part of the caption area.

  11. These are the transcribed forms and schedules, their sequence numbers, and the returns to which they can be attached:

    Note:

    If the return is converted, refer to the form type of the converted return.

    Form/Schedule Sequence Number 1040 1040-NR 1040-SS/1040-SS (sp)/1040-PR
    Schedule 1 01 Yes Yes No
    Schedule 2 02 Yes Yes No
    Schedule 3 03 Yes Yes No
    Schedule A, Form 1040 07 Yes No No
    Schedule A, Form 1040-NR 7A No Yes No
    Schedule NEC 7B No Yes No
    Schedule OI 7C No Yes No
    Schedule B 08 Yes No No
    Schedule C; Schedule C (sp); Schedule C-EZ (TY18 and prior) 09, 10, 11 Yes Yes Yes
    Schedule D 12 Yes Yes No
    Form 8949 (TY19 and later) 12A Yes Yes No
    Schedule E 13 Yes Yes No
    Schedule F; Schedule F (sp) 14, 15 Yes Yes Yes (not transcribed)
    Schedule R 16 Yes No No
    Schedule SE; Schedule SE (sp) 17, 18 Yes Yes (only Sequence Code 17) Yes
    Form 1116 19 Yes Yes No
    Schedule J 20 Yes Yes No
    Form 2441 21 Yes Yes No
    Form 3800 22 Yes Yes No
    Form 4137 24, 25 Yes Yes (only sequence code 24) No
    Form 4684 26 Yes Yes No
    Form 4797 27 Yes Yes No
    Form 4972 28 Yes Yes No
    Form 5329 29, 30 Yes Yes (only sequence code 29) No
    Form 6198 31 Yes Yes No
    Form 6251 32 Yes Yes No
    Form 8615 33 Yes Yes No
    Form 2555; Form 2555-EZ (TY18 and prior) 34, 35 Yes No No
    Form 4835 37 Yes Yes No
    Form 8839 38 Yes Yes No
    Form 8853 39 Yes Yes No
    Form 8814 40, 41, 42 Yes Yes No
    Schedule EIC 43 Yes No No
    Schedule H; Schedule H (sp); Schedule H-PR (TY22 and prior) 44, 45 Yes Yes (only Sequence Code 44) Yes
    Schedule 8812; Form 8812 (TY11 and prior) 47 Yes Yes No
    Form 8606 48, 49 Yes Yes No
    Form 8863 50 Yes No No
    Form 4952 51 Yes Yes No
    Form 8889 52, 53 Yes Yes (only sequence code 52) No
    Form 8880 54 Yes Yes No
    Form 8995 (TY19 and later) 55 Yes Yes No
    Form 8995-A (TY19 and later) 55A Yes Yes No
    Form 8995-A, Schedule C (TY20 and later) 55D Yes Yes No
    Form 8888 56 Yes Yes Yes
    Form 8978 (TY19 and later) 57 Yes No No
    Form 5405 58, 59 Yes No No
    Form 8919 61, 62 Yes Yes (only sequence code 61) Yes
    Form 8958 63 Yes Yes No
    Form 461 (TY21 and later) 64 Yes Yes No
    Form 8941 65, 66 Yes Yes (only sequence code 65) No
    Form 6252 (TY19 and later) 67 Yes Yes No
    Form 8910 68 Yes Yes No
    Form 8936 69 Yes Yes No
    Form 8936 Schedule A 69A Yes Yes No
    Form 8867 70 Yes Yes Yes
    Form 8959 71 Yes Yes Yes
    Form 8960 72 Yes Yes No
    Form 8962 73, 74 Yes Yes No
    Form 5695 (TY23 and later) 75 Yes Yes No
    Form 965-A (TY19 and later) 76 Yes No No
    Form 9000 (TY21 and later) 77 Yes Yes Yes
    Schedule LEP (TY19 and later) 77A Yes Yes Yes
    Form 8997 (TY21 and later) 78 Yes Yes No
    Form 4136 79 Yes Yes No
    Form 8938 938 Yes Yes No

Form 3471-E

  1. Edit money amounts on Form 3471-E in dollars only for all form types.

  2. Staple Form 3471-E to the last page of the tax return with Form 3471-E facing out.

Dollars and Cents Editing

  1. Allow the taxpayers to round or truncate (drop the cents) amounts.

  2. Use only dollar amounts when computing amounts on forms or schedules.

    Exception:

    Use dollars and cents when computing withholding and excess Social Security tax.

  3. For TY18 and prior, draw a vertical line between the dollars and cents figures when dollars or cents are in the wrong column:

    1. on each line that is to be transcribed, or

    2. down the entire front of the form or schedule

    Exception:

    It is not required to draw a vertical line when column(s) are not present and the dollars and cents have been separated by a decimal.

  4. Dollars and cents editing is required on certain T-lines if any of the following conditions exist:

    1. A substitute form is used with dollars and cents not clearly separated by a decimal point or slash.

      Exception:

      Do not draw a vertical line to separate dollars and cents when only dollar amounts are present on a dollars and cents T-line.

    2. An entry is illegible.

    3. When computing and editing an entry as directed by line-by-line instructions.

      Exception:

      It is not necessary to edit "00" to indicate no cents.

  5. The following line numbers require dollars and cents editing when adjusting or editing:

    1. Form 1040 - lines 24 through 38

    2. Form 1040-NR - lines 24 through 38

    3. Schedule 3 - lines 9 through 14

    4. Form 1040-PR - Part I, lines 6 through 16

    5. Form 1040-SS/1040-SS (sp) - Part I, lines 6 through 16

    6. Form 13900 and Form 13975

    7. Form 9143 and Form 13557

Action Codes

  1. An Action Code consists of three numeric characters and is used to reject a document and identify the reason for rejection.

  2. Edit Action Codes on page 1 of the return in the bottom-center margin.

  3. Assign only one Action Code to a document. Edit Action Codes in the following priority:

    1. "300"

    2. "310"

    3. "4XX"

    4. "6XX"

    5. "2XX"

    6. "3XX"

  4. These Action Codes are for international processing:

    1. "215" - International correspondence

    2. "420" - Verification of Form 8288-A withholding for numbered returns

    3. "651" - Transship international returns to AUSC

      Note:

      When processing returns that were transshipped, delete the Action Code "651" and continue processing.

  5. For a complete list of Action Codes, see Exhibit 3.11.3-2.

Audit Codes

  1. An Audit Code is an alpha or numeric character used to identify a questionable condition for Examination.

  2. Edit Audit Codes horizontally on page 1 of the return in the bottom-right margin.

  3. The most commonly used international Audit Codes are:

    Code Explanation
    H
    • Schedule B, line 8, Yes box is marked, or

    • One or more of the following are attached: Form 926, Form 3520, Form 3520-A, Form 5471, or Form 5472

    K Expatriation return (Form 1040-NR with Form 8854 attached)
    L
    • IRC 6501(d): request for prompt audit or assessment, or

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands, is attached to Form 1040

  4. For a list of additional Audit Codes, see Exhibit 3.11.3-3.

Computer Condition Codes (CCCs)

  1. A Computer Condition Code (CCC) is an alpha or numeric character.

  2. Edit CCCs horizontally in the following locations:

    • Form 1040: page 1 in the blank space to the right of the sentence, Spouse itemizes on a separate return or you were a dual-status alien

    • Form 1040-NR: page 1 above Dependent’s identifying number

    • Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 centered to the right of Part I Total Tax and Credits

  3. Edit Computer Condition Code "C" when Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to Form 1040-NR. CCC "C" is unique to international processing.

  4. When CCC "3" is edited, it must appear first (to the left of any other CCC).

  5. Always edit an Action Trail when CCC "Y" is edited.

    Exception:

    An Action Trail is not required when CCC "Y" is edited to indicate that a return is Dual-Status.

  6. For a list of additional Computer Condition Codes (CCCs), see Exhibit 3.11.3-4.

Form Processing Codes (FPCs)

  1. A Form Processing Code (FPC) is an alpha or numeric character that indicates when a specific form or schedule is attached to a return.

  2. Edit FPCs vertically in the following locations:

    • Form 1040 and Form 1040-NR: page 1 to the right of Line 7

    • Form 1040-SR: page 1 to the right of Line 4b

    • Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 in the margin to the right of Line 7

  3. For TY16 and later, edit FPC "D" if there is a federally declared disaster loss claimed on Schedule A and Form 4684.

  4. For Form 1040-NR only, edit FPC "S" if Schedule SE is attached or there is an entry on Schedule 2, line 4.

  5. For a list of other Form Processing Codes (FPCs), see IRM 3.11.3.

Return Processing Codes (RPCs)

  1. A Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. Edit RPCs horizontally on page 1 of the return in the bottom-left margin.

  3. For a complete list of Return Processing Codes (RPCs), see Exhibit 3.21.3-3 and Exhibit 3.11.3-5.

Special Processing Codes (SPCs)

  1. A Special Processing Code (SPC) is an alpha or numeric character used to flag a condition or trigger a computation. SPCs are used for computer processing and do not post to the Master File. SPCs supplement the Return Processing Codes.

  2. Edit SPCs vertically in the following locations:

    • Form 1040: page 1 to the right of the Spouse’s social security number

    • Form 1040-NR: page 1 to the right of Your identifying number

    • Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 to the right of Spouse's social security number

  3. Edit SPC "P" on all Streamlined Filing Compliance returns. Special Processing Code "P" is unique to international processing.

  4. For a list of additional Special Processing Codes (SPCs), see Exhibit 3.11.3-6.

Received Dates for All International Returns

  1. The received date is the date a return was received by the IRS.

  2. When a received date is required, edit it in "MMDDYY" (Month/Month, Day/Day, Year/Year) format, using the instructions below:

    1. Form 1040: edit in the empty space to the right of "Dependents (see instructions):"

    2. Form 1040A (TY17 and prior): edit to the left of line 6d

    3. Form 1040EZ (TY17 and prior): edit in the center to the left of line 6

    4. Form 1040-SS/Form 1040-SS (sp): edit in the dotted portion to the left of line 5

    5. Form 1040-PR (TY22 and prior): edit in the dotted portion to the left of line 5

    6. Form 1040-NR: edit in the empty space to the right of "Dependents (see instructions):"

    7. Form 1040-NR (TY19 and prior): edit in the dotted portion to the left of line 8

    Note:

    For prior year Form 1040, refer to Job Aid 2431-010 for editing location.

  3. If the received date is present in or above the caption area, delete, and edit the same received date, if required, as instructed above.

  4. If a received date is required but is not present on page 1 of the return, search the return and attachments for a received date, and edit that date as instructed above.

  5. A received date is always required when the return is:

    1. Amended

    2. Delinquent ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. For a fiscal year, prior year, or short year

    4. Early-filed for a decedent (filed before the close of the current year)

    5. Processed June 3, 2024 or later, or the Julian date in the DLN is 155 or later

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ Do not edit a received date if the return is determined to be timely.

    Note:

    A received date is not required for Current Year Programs 46140,46145, 46180, or 46185 until after June 2, or until the Julian date in the DLN is 155 or later.

    Exception:

    Returns batched in Program 46220, 46227, 46228, or 46910 do not require a received date.

  6. Circle a received date when it is present on a return and it is not required.

  7. Circle all but the earliest received date when a return has multiple received dates and one is required.

    Exception:

    For transshipped returns see IRM 3.21.3.8 (12).

    Note:

    Circle all but the earliest valid received dates (including Statute or other valid IRS organization's received dates) when there are multiple received dates present and a received date is required. See IRM 3.21.3.8.1.1. Taxpayer Advocate Service (TAS) received dates are not valid received dates. If multiple received dates are identical, circle all but one received date.

    Exception:

    When the return has been mailed back for missing signature(s), and multiple received dates are present, see IRM 3.21.3.8.1.

  8. If a received date is "X" -ed, circle that received date stamp.

  9. Perfect the received date when it is required and it is not legible or is incomplete. When perfecting edit in the "MMDDYY" format.

  10. When multiple returns are mailed together, the envelope is attached to one return and a dual date stamp is used on the other returns. A dual date stamp has both the postmark date and the received date.

  11. Transshipped Returns - Any of the following are indications of a transshipped return:

    1. A Service Center received date stamp other than Austin (AUSC)

    2. A yellow Optional Form 41, Routing and Transmittal Slip

    3. A blue tag titled ROUTE with the box marked AUSC (Austin)

    4. Any other indications or evidence of a transshipped return which may be identified

  12. If a received date is required and the return was transshipped from any other Service Center (Andover, Atlanta, Brookhaven, Cincinnati {Covington}, Fresno, Kansas City, Memphis, Ogden, or Philadelphia), follow the instructions below:

    Note:

    DO NOT refer to any other instructions in this IRM or in IRM 3.11.3 to determine the received date for any return that can be identified as being transshipped from another Service Center.

    If Then
    The return has been stamped with an AUSC received date and another Service Center stamped received date, Circle out the other Service Center received date (including those that have ramped down), leaving only the AUSC date.
    The return has a Field Assistance/TAC received date stamp, Honor the Field Assistance/TAC received date. Circle any other received date(s).
    The return has only received date(s) stamped from another Service Center,
    1. Circle the received date(s).

    2. Edit a received date (current date minus 10 days).

      Exception:

      If today's date minus 10 days makes the received date earlier than any of the other campus dates, edit the other campus date as the received date.

    The return has only an AUSC received date, Take no action.
    The return has no received date, Edit a received date (current date minus 10 days).

    Exception:

    If the return was transshipped and a determination was made that the return was not foreign or the foreign aspect was deleted, process the return as a domestic return and honor the original received date.

Determining Received Date

  1. Determine the received date in the following priority when it is required and there is no valid date stamp or written received date:

    1. Latest postmark on the envelope or latest date from a designated private delivery service or private metered postmark.

      Note:

      When the envelope or air-bill is not attached, use the postmark date stamped or handwritten on the return to determine the received date.

    2. Service Center Automated Mail Processing System (SCAMPS) digital dates stamped on the envelope.

    3. Latest date by the taxpayer's signature.

      Exception:

      Use the signature date on prior year returns only when it is within the current year. Also, do not use the signature date to determine the received date for replies to correspondence.

    4. Julian date in the DLN minus 10 days.

    5. Today's date minus 10 days.

  2. For current year returns due April 15: Determine the received date; then:

    If the determined date is And the return is being processed Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ June 2 or earlier, Do not edit a received date.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ June 3 or later, Edit "041524" as the received date.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ April 23 or later, Edit the determined date as the received date.

  3. For current year Form 1040-NR (non-effectively connected) returns due June 17: Determine the received date; then:

    If the determined date is And the return is being processed Then
    June 2, 2024 or earlier June 2 or earlier, Do not edit a received date.
    June 16, 2024 or earlier Between June 3 and June 16, Edit the determined date as the received date.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ June 17 or later, Edit "061724" as the received date.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ June 23 or later, Edit the determined date as the received date.

  4. For all prior year returns: Edit the determined date as the received date.

  5. If the stamped received date is three months or more prior to the current date, search the return for an indication the received date is incorrect (such as a postmark or signature date after the received date). If the received date is determined to be incorrect, delete it and edit a new received date following instructions in IRM 3.21.3.8.1 (1).

    Note:

    In 2024, when processing TY22 returns received in 2023,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ check for an envelope postmark date. If the postmark date is "041823" or earlier, circle the received date and edit the postmark date as the new received date.

  6. ALWAYS review each return for the words, "Returned for Signature" or similar statement and a date present in the lower-left corner of the return. These are returns that were originally received missing a signature and were mailed back to the taxpayer. If a date and the notation "Returned for Signature" or similar statement is present, refer to the following instructions for editing the received date:

    1. If the return is Balance Due and a received date is present showing a date within 30 days after the date present in the lower-left corner, use the date sent back for signature as the received date. Delete any other received date(s) that may be present.

    2. If the return is Balance Due and a received date is present showing a date MORE than 30 days after the date present in the lower-left corner, honor the latest received date. Delete any earlier received date(s) that may be present.

    3. If the return is a Refund, Credit Elect or Zero-balance return, honor the latest received date. Delete any earlier received date(s) that may be present.

    Exception:

    For statute returns only, if a received date is present showing a date within 30 days of the Returned for Signature date, circle out the latest received date and edit the earlier received date.

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Caution:

    Take the following action on any International Form 1040, Form 1040-NR, Form 1040-PR, or Form 1040-SS transshipped from another Campus, Territory Office, or Foreign Post:

    If Then
    There is no Austin Service Center (AUSC) received date, Edit the received date using today's date minus 10 days.

Types of Received Dates
  1. A valid Received Date stamp has all of the following:

    1. The word "Received"

    2. Month (alpha or numeric), Day, and Year

    3. The name of the city or the name of the functional area (e.g., Statute, RIVO, CSCO, Exam, ICT, CII, AM, etc.).

    Note:

    A received date from one of these cities is not valid: Andover, Atlanta, Brookhaven, Cincinnati {Covington}, Fresno, Kansas City, Ogden, or Philadelphia. Follow the instructions in IRM 3.21.3.8 (12) for transshipped returns.

  2. Accept a valid Received Date stamp from the following:

    1. Austin (AUSC/AUSPC)

    2. Charlotte, NC

    3. Field Assistance or TAC offices

    4. IRS area/territory

    5. IRS Offices in London, Paris, Beijing or Frankfurt only.

  3. Accept as valid a handwritten or typed received date if edited by an IRS employee in Submission Processing or Return Integrity Verification Operations (RIVO).

    Note:

    A clear indication that a handwritten or typed received date has been edited by RIVO will be the presence of SPC "B" , SPC "M" , and/or "RIVO" noted or stamped in the upper-left margin. Generally, the RIVO edited received date will be earlier than the original, stamped received date.

  4. Accept a received date on an IRS Received Date label (Form 14471) above the caption.

    Note:

    Delete and edit the same received date as instructed in IRM 3.21.3.8 (2).

Post Office Marks
  1. For complete instructions, see IRM 3.11.3.8.2.2.

Private Delivery Service (PDS) Marks
  1. For complete instructions, see IRM 3.11.3.8.2.3.

Timely-Filed Returns

  1. In 2024, a current year return is a return filed for tax year 2023. A current calendar-year return (2312) is considered timely filed when it is received on or before the due date:

    1. April 15, 2024 for Form 1040, Form 1040-SS, Form 1040-SS (sp)

    2. April 15, 2024 for Form 1040-NR (programs 46120 and 46160)

    3. April 15, 2024 for Dual-Status Form 1040 (program 46115), Dual-Status Form 1040-NR (program 46129)

    4. June 17, 2024 for Form 1040-NR (programs 46140 and 46180)

    5. June 17, 2024 for Dual-Status Form 1040-NR (programs 46145 and 46185)

  2. ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. For current calendar-year (2312) returns due April 15th (with the exception of Program 46220, 46227, 46228, or 46910), received on or before April 15, 2024:

    If the document is Then
    Unnumbered and being processed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited or altered in green ink.

    Numbered with a Julian date of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the DLN, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited or altered in green ink.

    Unnumbered and being processed on ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or later, Edit "041524" as the received date if one is not present.
    Numbered with a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the DLN, Edit "041524" as the received date if one is not present.

  4. For current calendar-year Form 1040-NR returns that qualify for an automatic two-month extension, received on or before June 17, 2024:

    If the document is Then
    Unnumbered and being processed before ≡ ≡ ≡ ≡ ≡ ≡ ≡, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited or altered in green ink.

    Numbered with a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited or altered in green ink.

    Unnumbered and being processed on ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Determine the received date if one is not present.
    Numbered with a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the DLN, Determine the received date if one is not present.

Grace Period

  1. By law, a timely-mailed return is a timely-filed return. This applies to both United States Postal Service (USPS) and designated Private Delivery Service (PDS) mail.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡"
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡"

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Late-Filed Return/Reasonable Cause

  1. A return is delinquent when it is filed after the due date without an approved extension.

    Note:

    Taxpayers residing outside the United States and Puerto Rico are entitled to a two-month extension to file.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    "≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    "≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. Edit CCC "N" on a return that qualifies the taxpayer for a special extension when the received date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is an indication (on the return or an attachment) of any of the following:

    1. The taxpayer lived outside the United States and Puerto Rico on the due date of the return.

    2. Caption address outside United States and Puerto Rico.

    3. The taxpayer is in the military or naval service on duty outside the United States and Puerto Rico.

    4. The taxpayer has a APO/DPO/FPO address.

    5. Form 2555 dates indicate still there or continuing.

    6. Form 2555 has an ending date later than the tax year of the return (e.g., 2024, 2025, etc.).

    7. Return indicates Treasury Regulation 1.6081-5(a).

    Note:

    Do not edit CCC "N" on Form 1040-NR or Form 1040-NR-EZ. These taxpayers do not qualify for the special extension

    .

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. When the taxpayer's reasonable cause statement is not acceptable:

    1. Edit CCC "7"

    2. Route for correspondence. Letter 854C (Penalty Waiver or Abatement Disallowed Appeals Procedure Explained) must be issued.

  6. On a late-filed return when reasonable cause is established, take the following action:

    If Then
    Late filing Edit CCC "R" , unless CCC "N" has been edited.
    Late payment or a "Section 6020(b)" notation is present Edit CCC "M" .

  7. Edit CCC "R" on a late filed return when the taxpayer has a Form 4868 or Form 6401 attached to the return and an ITIN or IRSN is present in the primary SSN field. Both ITINs and IRSNs begin with a 9.

    Note:

    If CCC "N" is edited, delete CCC "N" .

  8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Returns filed by taxpayers with an extension are due October 15, 2024. Extension forms are not required to be attached to the return when filed.

    Reminder:

    Do not change the received date when the return was received between October 16, 2024 and October 22, 2024.

  9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    International taxpayers may have an additional extension until December 15, 2023. Extension forms are not required to be attached to the return when filed.

    Reminder:

    Do not change the received date when the return was received between December 16, 2023 and December 22, 2023.

General Instructions for All International Returns

  1. Edit RPC "L" and CCC "B" if there are no significant T-line entries present or edited from attachments on lines:

    • Form 1040: 1a through 38

    • Form 1040A (TY17 and prior): 7 through 51

    • Form 1040EZ (TY17 and prior): 1 through 14

    • Form 1040-NR: 1a through 38

    • Form 1040-NR-EZ (TY19 and prior): 3 through 26

    Reminder:

    When applicable, the Dependency Status Indicator (DSI) (TY17 and prior) is required even if RPC "L" is edited.

  2. Form 1040-SS and Form 1040-PR: Edit RPC "L" if there are no significant T-line entries present or edited from attachments on line 3 through 16.

  3. Computer-generated returns are identified by a three-alpha character software code in the bottom margin of page 1 or 2 of Form 1040 or Form 1040-NR, or page 1, 2, 3, or 4 of Form 1040-SR, Form 1040-SS, or Form 1040-PR. Edit RPC "V" when the tax return is computer generated. Also, edit SPC "Y" if FFF (separate from the software code) is present in the bottom margin.

    Exception:

    Do not edit RPC "V" or SPC "Y" if the return is a prior year return, or there is an indication the return was prepared by Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) (e.g., the presence of an "S" within the P-TIN field).

  4. For TY19 and TY20 returns identified as Economic Impact Payment (EIP) returns, no special processing is required. Disregard any notations of EIP on the return, and process per current instructions.

  5. If the return contains page 1 from Form 1040 and page 2 from Form 1040-NR or vice-versa:

    • Convert and process as Form 1040-NR unless Schedule OI is attached and the taxpayer indicates presence in the U.S. for 365 or 366 days.

    • If the taxpayer indicates presence in the U.S. for 365 or 366 days, then convert and process return as Form 1040.

  6. All amounts are to be reported in U.S. currency only. If amounts are reported in foreign currency, give the return to the workleader, who will convert any amounts reported in foreign currency to U.S. dollars using the exchange rate table appropriate for the tax period of the filer's return. See https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange, and use December rates for the tax year of the return. Divide the foreign currency amount by the exchange rate.

  7. For early-filed returns, such as gambling:

    1. Edit Action Code "480" ,

    2. Edit the tax period in YYMM format, and

    3. Edit the received date if not present.

  8. Some situations will require special editing procedures. Examine the return for indications of these conditions. Edit these returns using instructions in IRM 3.11.3.6, Special Situations and Returns, unless otherwise instructed in line-by-line instructions in IRM 3.21.3:

    Special Situations IRM Reference
    Combat Zone and other Military Operations IRM 3.11.3.6.1.1
    Examination Cases IRM 3.11.3.6.1.5
    Fiduciary Relationship (Minor Child, POA) IRM 3.11.3.11
    Frivolous Filer/Non-Filer Returns

    Note:

    Any return with a 1099-OID should be treated as frivolous.

    Note:

    There are also FRIV 1040-NR Sole Proprietor - UK returns

    IRM 3.11.3.6.1.6
    Hardship
    When the Taxpayer Advocate Service (TAS) Liaison walks a hardship return through Code & Edit:
    • Perform all normal editing.

    • Edit CCC "O" to freeze the refund

    • Edit CCC "Y" to send the return to Error Resolution System (ERS)

    • "X" the refund line on the return.

    • Do not correspond. If correspondence conditions are identified during editing, give the return back to TAS.

    IRM 3.11.3.6.1.4
    Identity Theft: Taxpayer submits Form 14039, Form 14039 (SP) or police report(s) claiming identity theft Exhibit 3.21.3-1
    Killed in Terrorist Action (KITA) IRM 3.11.3.6.1.2
    Natural Disaster/Emergency Relief Program IRM 3.11.3.6.1.3

    Exception:

    The exception applies to domestic withholding only. Follow normal IRM procedures for withholding from Form 8805, Form 8288-A and Form 1042-S.

    Refund Schemes IRM 3.11.3.6.1.7
    Suicide Threats IRM 3.11.3.6.1.9
    Special Returns IRM Reference
    Amended Returns IRM 3.11.3.6.2.1
    Blank Returns IRM 3.11.3.6.2.3
    Blind Trust Returns IRM 3.11.3.6.2.22
    Blocked or Deferrable Income Returns IRM 3.11.3.6.2.6
    Correspondence Imaging Inventory (CII) Returns IRM 3.11.3.6.2.7
    Combined Tax Liability Returns IRM 3.11.3.6.2.8
    Community Property or Registered Domestic Partnership Returns IRM 3.11.3.6.2.9 and IRM 3.21.3.9.2
    52-53 Week Returns IRM 3.11.3.6.2.21
    Form 8938, Statement of Foreign Financial Assets Exhibit 3.21.3-1 and IRM 3.11.3.6.2.10
    Incomplete Returns IRM 3.11.3.6.2.4
    Form 8379, Injured Spouse Allocation IRM 3.11.3.6.2.11
    Form 8857, Innocent Spouse Relief Request IRM 3.11.3.6.2.12
    Misblocked Returns IRM 3.11.3.6.2.15 and IRM 3.21.3.4.1
    Misfiled Returns IRM 3.11.3.6.2.16
    Reinput Returns IRM 3.11.3.6.2.17
    Returns Secured by Collection IRM 3.11.3.6.2.18
    Short Period Returns IRM 3.11.3.6.2.19

    Note:

    Edit Action Code "215" on International Returns.

    Substitute for Return (SFR) IRM 3.11.3.6.2.20
    Unprocessable Returns IRM 3.11.3.6.2.2

Streamlined Filing Compliance Procedures

  1. Treat as Streamlined Filing Compliance Procedures if any are present:

    • Notation of "Streamlined Foreign Offshore"

    • Notation of "Streamlined Domestic Offshore"

    • Package of returns addressed to Mail Stop 6063 AUSC

    • Taxpayer mentions the "Streamlined" procedures in an attached letter

  2. Returns postmarked on or after July 1, 2014 will follow the Streamlined Filing Compliance Procedures processing instructions as outlined at IRM 3.21.3.9.1.1.

  3. Submissions consisting only of Form 1040-NR are not processed using Streamlined Filing Compliance Procedures. Forms 1040-NR must have been reviewed by LB&I per IRM 3.21.3.9.1.1 LB&I will indicate this by leaving an action trail in the left margin.

  4. Streamlined packages may contain a mixture of Form 1040, Form 1040-NR, and Dual Status returns.

    • Fully code all returns.

    • Tag Forms 1040-NR for rebatch with a purple rebatch tag. Mark the Streamlined 1040-NR box.

    • Edit action trail "Streamlined Package Complete" in the left margin on each return in the package.

    Note:

    If the Form 1040 is the controlling document in a Dual Status return, do not tag the return for rebatching.

  5. Unless otherwise instructed, it is important that all returns submitted by a taxpayer be kept together. Streamlined packages tagged for rebatching will require special handling. Forms 1040-NR will be rebatched into appropriate programs. All program transmittals and returns must stay together through the remainder of the pipeline process.

  6. If Letter 4087C and/or an explanation stating that the taxpayer is responding to a 4087C is attached, or if there is an envelope addressed to MS 6126, treat as a "reply to Streamlined correspondence." Route the uncoded package to Rejects using the yellow Streamlined tag.

    Exception:

    Do not route to Rejects if a notation "Process as Original" or "PAO" is present on the return.

  7. All returns submitted under the Streamlined Filing Compliance Procedures must have a valid Taxpayer Identification Number (TIN). If a return submitted to the Streamlined Procedures is received without a Taxpayer Identification Number (TIN), search the package for a valid TIN. If no TIN is found, route the uncoded package to Entity Control for an IRSN using yellow Streamlined tag.

    Reminder:

    An IRSN must be assigned before the package can be routed to Statute. The assignment of an IRSN to a submission made by a taxpayer required to use an SSN does not constitute waiver by the IRS of the eligibility requirements for the Streamlined Filing Compliance Procedures.

  8. Any Streamlined package that contains any return marked amended/duplicate/copy or indication of Copy to ICT submitted under this procedure should be routed uncoded to LB&I at MS 4305 AUSC using yellow Streamlined tag.

    Note:

    If the Certification Form 14653 or Form 14654 is marked "Amended" , then the Streamlined package must be reviewed by LB&I before processing. If an amended certification form is attached to an amended return, and there isn’t an indication of prior LB&I review, then route the package to MS 4305 AUSC using yellow Streamlined tag.

    Note:

    LB&I will review the returns and determine the actions that need to be taken by Submission Processing. Follow the directives provided by LB&I when the return is received back from LB&I review. LB&I will make the notations in the lower-left margin.

    Note:

    If a statute year Form 1040-X without an "AM Streamlined Cover sheet" attached has not been cleared by Statute, route the entire package uncoded to LB&I at MS 4305 AUSC using yellow Streamlined tag.

  9. If a return in the package requires Statute Clearance, route the entire uncoded package to LB&I, STOP 4305 AUSC.

    Exception:

    Statute year Forms 1040-X received with an "AM Streamlined cover sheet" already attached or an LB&I reviewed notation or stamp do not need to be routed to LB&I.

  10. When the Attachment Guide requires routing the actual return to another department (e.g., Collections, Exam), route to LB&I MS 4305 AUSC by attaching the yellow Streamlined tag to the uncoded package, checking the "other" box, and writing the reason for routing to LB&I.

  11. When the Attachment Guide requires research, route to LB&I MS 4305 AUSC by attaching the yellow Streamlined tag to the uncoded package, check the "TC 150 research" box if TC 150 research is required, or check the "other" box for all other research.Also, write the reason for routing to LB&I.

  12. When attachments are received separated from returns (FBARs, certifications, correspondence, etc.), attach them to corresponding tax years. If the attachment does not correspond to a tax year, attach to the latest Streamlined tax year.

    Exception:

    If original BMF forms are listed on the certification, route entire package to LB&I at MS 4305 AUSC. Otherwise, route BMF forms to R&C and leave action trail on related tax year (if any).

  13. Follow local procedures for completing and routing Forms 1040-X with an Accounts Management cover sheet.

2014 Streamlined Filing Compliance Procedures
  1. Review all instructions in IRM 3.21.3.9.1 prior to processing with Streamlined Filing Compliance Procedures.

  2. All streamlined returns should be coded with SPC "P" .

  3. When a complete streamlined package is received, edit:

    • CCC "M"

    • CCC "P"

    • CCC "R"

      Note:

      Do not edit CCC "N" if editing CCC "M" , CCC "P" , and CCC "R" .

      Caution:

      Do NOT edit CCC "M" , CCC "P," and CCC "R" if corresponding for a streamlined issue such as the certification. If CCC "M" , CCC "P" , and CCC "R" are not edited, see IRM 3.21.3.8.4 for CCC "N" instructions.

  4. The instructions for editing CCC "7" on streamlined returns will not apply if the return has CCC "M" , CCC "P" , and CCC "R" edited.

  5. Follow normal coding instructions as outlined in IRM 3.21.3 and IRM 3.11.3.

  6. If the package is incomplete, see IRM 3.21.3.9.1.2.

  7. Once it has been determined that a streamlined package is complete:

    1. If a copy of the certification is not attached to each tax year in the package, photocopy and attach.

    2. If the taxpayer provides an explanation on a separate statement, the statement must also be copied and attached to the return.

    Note:

    Use pink tag to indicate the number of copies and which returns need copies.

  8. Once all returns have a photocopy of the certification, detach the certification with the original signature. Route this original certification to LB&I, STOP 4305 AUSC, using blue routing tag.

  9. If a package contains Form(s) 1040-X AND the certification is complete with all tax years:

    1. Separate the Form(s) 1040-X.

    2. A copy of the certification MUST be attached to each Form 1040-X.

    3. Edit an action trail, "Streamlined Package Complete," in the left margin on each return in the package.

    4. When an AM Streamlined Coversheet is attached to each Form 1040-X in the package, route to ICT using a blue routing tag. Keep multiple Forms 1040-X together.

    5. When a streamlined Form 1040-X is missing an AM Streamlined Coversheet, attach a yellow streamlined tag, check the box, "other," and notate, missing coversheet. Route to LB&I, STOP 4305 AUSC.

    Exception:

    If streamlined correspondence is required, follow IRM 3.21.3.9.1.2 (2).

Correspondence for 2014 Streamlined Filing Compliance Procedures
  1. If the items below are not submitted with a new Streamlined package, correspond:

    1. Items required for a complete Streamlined Foreign Offshore filing:
      - Original signature(s) of the taxpayer(s) under a jurat on at least one Certification.

      Note:

      If the tax return is married filing jointly then correspond if one or both signatures are missing.

      Exception:

      Any return received from LB&I with the notations of "Process as Streamlined" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.


      - Form 14653 (Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures).

    2. Items required for a complete Streamlined Domestic Offshore filing:
      - Amount of taxpayer's miscellaneous offshore penalty (only packages with Form 1040-X require a penalty computation).
      - An original signature is required under a jurat on at least one certification.

      Note:

      If the tax return is married filing jointly then correspond if one or both signatures are missing.

      Exception:

      Any return received from LB&I with the notations of "Process as Streamlined" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.


      - Form 14654 (Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures).

      Note:

      If the taxpayer submits Streamlined package with Form 14438 questionnaire instead of a certification, correspond using paragraph "E" instructing the taxpayer to follow current Streamlined procedures.

    Note:

    A substitute certification form is acceptable as long as it contains all of the relevant information listed above including a signature under a jurat. Correspond if missing.

  2. If any Streamlined correspondence is required, follow the instructions below:

    • Use Form 13900 and only correspond on one tax year.

    • Use Action Code "215" on each return, except Form 1040-X.

    • Keep the package together - including any Form(s) 1040-X.

    • Place an Accounts Management cover sheet on each Form 1040-X.

      Reminder:

      Keep the package together.

  3. If correspondence is required AND there are NO Streamlined issues, follow the instructions below:

    • Use Form 13900 to correspond.

    • Use Action Code "215" on each return, except Form 1040-X.

    • Keep the package together with the exception of Form(s) 1040-X,

    • Ensure each return has a copy of the certification and route the original certification to LB&I at MS 4305.

      Caution:

      If you are separating Form(s) 1040-X, remember to use the AM cover sheet and attach a copy of the certification to the return(s). Edit an action trail "Streamlined Package Complete" on each return in the package.

Amended/Duplicate Returns Submitted for 2014 Streamlined Filing Compliance Procedures
  1. See IRM 3.21.3.9.1.1.

Community Property or Registered Domestic Partnership Returns - General Information

  1. If taxpayers are married and are subject to the community property laws of a foreign country, a United States state, or a United States Territory, they generally must follow those laws to determine their income for United States tax purposes unless:

    1. Both taxpayers are nonresident aliens.

    2. One taxpayer is a nonresident alien and the other is a United States citizen or resident and they do not both choose to be treated as United States residents.

  2. If one taxpayer is a nonresident alien, the following rules apply to community income.

    1. Earned income of a spouse, other than trade or business income and a partner’s distributive share of partnership income, is treated as the income of the taxpayer whose services produced the income. That taxpayer must report all of it on a separate tax return.

    2. Trade or business income, other than a partner distributive share of partnership income, is treated as the income of the person who exercises substantially all of the management and control over the trade or business. That taxpayer must report all of it on a separate return.

    3. Partnership income (or loss). A partner distributive share of partnership income is treated as the income (or loss) of the partner. The partner must report all of it on a separate return.

  3. Income derived from the separate property of one taxpayer (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that taxpayer. That taxpayer must report all of it on a separate return. Use the appropriate community property law to determine what is separate property.

    Note:

    Income can no longer be split under Community Property provisions.

  4. All other community income is treated as provided by the applicable community property laws.

Decedent Return

  1. For ALL international returns, see IRM 3.11.3.10 - 3.11.3.10.6.

  2. In addition to the instructions above, special editing is required when an Additional Information Line (AIL) is required for a foreign address. If a foreign address AIL is present, and a decedent AIL is present or has been edited as a second AIL, take the following actions for a refund return:

    1. DO NOT edit CCC "L" or CCC "W" .

    2. Edit CCC "Y" and an action trail of "Manual Refund" .

      Exception:

      Do not edit CCC "Y," if CCC "3" has been edited. If the taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not edit CCC "Y" . (An IRSN begins with a 9 and the middle two digits are other than 50-65, 70-88, and 90-99. The middle two digits identify the campus location where it was issued.)

Tax Period for International Returns

  1. See IRM 3.21.3.84.1 for Form 1040-NR and Form 1040-NR-EZ specific instructions.

  2. Australian residents often use a June (06) fiscal tax period ending date that coincides with the Australian accounting period. Follow taxpayer intent and edit YY06 for the tax period when June 30th is indicated as the tax period ending date on the tax return for an Australian resident.

  3. New Zealand residents often use a March (03) fiscal tax period ending date that coincides with the individual New Zealand accounting period. Follow taxpayer intent and edit YY03 for the tax period when March 31st is indicated as the tax period ending date on the tax return for a New Zealand resident.

  4. U.K. residents use a fiscal tax period that ends on April 5th.

  5. For additional instructions refer to IRM 3.11.3.7.

    Caution:

    See IRM 3.21.3.84.1 for additional information Form 1040-NR or Form 1040-NR-EZ instructions.

General Instructions for Editing All International Returns

  1. The following subsections contain instructions for:

    • Caption Information

    • Taxpayer Identification Number

    • Name and Additional Information Line

    • Mailing Address

    • City and State

    • ZIP Code

    • Country Name

  2. Additional instructions may be found within form-specific instructions.

Caption Information and Editing

  1. Required Caption Information Includes:

    1. Primary Taxpayer Identification Number (P-TIN)

    2. Secondary Taxpayer Identification Number (S-TIN), if applicable

    3. Name(s)

    4. Additional Information Line (which may be present to further identify the taxpayer's location or representative)

    5. Mailing Address

    6. City/State

    7. Foreign Province/State or Territory/Foreign Mail Routing Code/Postal Code

    8. Country (if applicable)

    9. ZIP Code when available

  2. Do not change the name control when it has been edited in red by: Entity Unit, ITIN Operation, or RPS employee. Use the Entity/ITIN/RPS editing to perfect the:

    1. Name Control for the caption.

    2. TIN on attachments - Schedule C, Schedule EIC, Schedule H, Schedule SE, Form 2441, Form 4137, Form 5405, Form 8839, Form 8853, Form 8863, Form 8919, Form 8941, and Form 8958.

    Note:

    The name control for a newly assigned TIN or IRSN may have been edited and underlined by the ITIN Operation or Entity Unit.

  3. Search the return and attachments for any missing caption information and perfect the caption if all missing information is found. For TY18, edit international address information from Schedule 6 to the caption if not already present when a complete address cannot be found elsewhere on the return.

  4. For additional instructions, see IRM 3.11.3.9.1 and 3.11.3.9.2. In addition to these instructions, form specific instructions must be followed for Form 1040-NR and Form 1040-NR-EZ. See IRM 3.21.3.84.3 through IRM 3.21.3.84.5.

Taxpayer Identification Number

  1. For complete instructions see IRM 3.11.3.9.2.1.

Primary TIN
  1. If the P-TIN is missing or incomplete, examine the return and its attachments and edit the P-TIN, if found. Circle an incomplete P-TIN.

  2. If there is an indication the taxpayer has used a TIN that is not their own, take no action.

    Example:

    The taxpayer shows an ITIN on the return and an SSN on attached Form(s) W-2.

  3. If the primary taxpayer’s TIN includes a notation of “NRA” or “nonresident” and the secondary taxpayer has an SSN/ITIN and income, edit the secondary SSN/ITIN as the primary TIN and reverse the order of the names.

  4. See IRM 3.21.3.84.3.1.1 for Form 1040-NR and Form 1040-NR-EZ specific instructions.

  5. For additional instructions, see IRM 3.11.3.9.2.1.1.

Secondary TIN
  1. Edit the S-TIN from the return or attachments if it is missing or incomplete, and the Filing Status (FS) is "2," "3," or "6."

    Exception:

    A Secondary TIN is not allowed on a Form 1040-NR or Form 1040-NR-EZ.

  2. For additional instructions, see IRM 3.11.3.9.2.1.2 and IRM 3.21.3.84.4.1.

Canadian TIN
  1. Canadian TIN: Canada assigns a Canadian TIN in a 3-3-3 (000-000-000) format. If it can be determined that the TIN is a Canadian TIN, examine the return and attachments for a TIN in a 3-2-4 (000-00-0000) format:

    1. If found, circle the Canadian TIN, and edit the correct U.S. TIN (000-00-0000 format).

    2. If not found, circle the Canadian TIN.

ITIN
  1. ITINs are issued to individuals who do not qualify for Social Security Numbers (SSNs). The ITIN is issued for tax purposes only and is obtained by completing a Form W-7, Application for IRS Individual Taxpayer Identification Number.

  2. Stop editing the return and take the following actions when Form W-7 or Form W-7(SP) is attached to the return:

    1. Unnumbered:
      • Pull the return from the batch. Attach Form W-7 to the front of the return.
      • Edit the Received Date to the left of the line 6 area on Form W-7/W-7(SP) in "MMDDYY" format and route the entire return to the ITIN unit.

    2. Numbered: Edit Action Code "610" .

Internal Revenue Service Number (IRSN)
  1. These numbers are used for internal processing only when the taxpayer does not qualify for an SSN or ITIN. An IRSN will start with a 9 (nine) and the middle two digits are other than 50-65, 70-88, and 90-99. The middle two digits identify the Campus location where it was issued from. The fourth and fifth digits for the Austin Campus are 06, 18, and 66.

Name and Additional Information Lines

  1. Each return processed must have a legible last name. Research following local procedures when the name is illegible and cannot be perfected.

  2. There are two lines available for taxpayer identification:

    1. The name line is for the first name, middle initial and last name(s) of the primary and secondary (if present) taxpayer(s). This includes any suffix.

    2. The additional information line (AIL) is used to further identify the taxpayer or contain a foreign street address.

      Example:

      Additional name, address or representative information may be shown.

Name Line
  1. For complete instructions, see IRM 3.11.3.9.2.2 and IRM 3.11.3.9.2.2.1.

Additional Information Line
  1. An AIL can contain the following information:

    1. A fiduciary, taxpayer representative, or in-care-of (c/o or %) information

    2. A parent signing for a minor child (see Figure 3.21.3-1)

    3. A location other than a street address (e.g., building, college, company) (see IRM 3.11.3.9.2.2.2)

    4. Mailing address of a foreign country

      Note:

      A P.O. Box can be an AIL.

    5. Private Mail Box (PMB)

    6. For a Puerto Rico address, see IRM 3.21.3.12.3.3

  2. If any of the above items listed in IRM 3.21.3.12.3.2 (1) are present, edit and/or underline the AIL.

    Exception:

    Do not underline the foreign mailing address if no province, city, or postal code is present.

  3. If a foreign address is present on Form 1040, Form 1040A, or Form 1040EZ and a name is present or has been edited as a second AIL, underline both. Then take the following actions for REFUND returns:

    1. For Decedent Returns, do not edit CCC "L" or CCC "W" .

    2. Edit CCC "Y" and an action trail of "Manual Refund" .

      Exception:

      Do not edit CCC "Y" , if CCC "3" has been edited. If the taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not edit CCC "Y" .(An IRSN begins with a 9 and the middle two digits are other than 50-65, 70-88, and 90-99. The middle two digits identify the Campus location where it was issued from. The fourth and fifth digits for the Austin Campus are 06, 18 and 66.)

  4. For additional instructions, refer to IRM 3.11.3.9.2.2.2.

    Figure 3.21.3-1

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Additional Information Line (Puerto Rico)
  1. The Additional Information Line (AIL) may be found anywhere in the caption area.

    Note:

    See IRM 3.21.3.12.3.3 (3)(g) below for examples of correct editing of address.

  2. Underline as the AIL, urbanizations, subdivisions, buildings, and Private Mail Boxes, unless it is the only element of the mailing address. In the table below are common abbreviations used to refer to urbanizations, subdivisions, buildings, and Private Mail Boxes.

    Exception:

    If a building (edificio) is a necessary part of the main address instead of just additional information, don’t underline it as an AIL.

    Abbreviations Urbanizations, Subdivisions, and Buildings
    ALT Altura
    ALTS Alturas
    BDA Barriada
    BO Barrio
    COLINAS Colinas
    COND Condominio
    COOP Cooperativa
    DEPT Departamento
    EDIF or EDF Edificio
    EST Estancias
    EXT Extension
    IND Industrial
    JARD Jardines
    MANS Mansiones
    PARC Parcelas
    PARQ Parque
    PMB Private Mail Box
    PUERTO Puerto
    QBDA Quebrada
    QTAS Quintas
    RPTO Reparto
    RES Residencial
    SECC Seccion
    SECT Sector
    TERR Terraza
    URB Urbanizacion
    VILLA Villa

  3. For Puerto Rico only, the following are different types of address formats:

    1. Four-line address containing Name, Urbanization, House Number and Street Name, City, State, and ZIP Code.

    2. Three-line address containing Name, House Number and Street Name, City, State, and ZIP Code.

      Exception:

      Some areas in Puerto Rico do not have street names or repetitive house numbers. The urbanization name substitutes as the street name and becomes the primary identifier.

      Example:

      Name, House Number and Urbanization Name, City, State, and ZIP Code.

    3. Public Housing Projects (residenciales) without street names or repetitive apartment numbers. In these cases, the apartment number is the primary number and the public housing project becomes the street name.

      Example:

      Name, Apartment Number and Residential Name, City, State, and ZIP Code.

    4. Apartment Buildings and Condominiums with a physical (street) address containing Name, Building Name, Street Number, Apartment Number, City, State, and ZIP Code.

    5. Buildings without a physical address. Certain Condominiums are located on an unnamed street and may not have an assigned number. The name of the Condominium substitutes as the street name and the number 1 is used when no building number exists.

    6. Urbanization - denotes an area, sector or residential development within a geographic area. Commonly used in Puerto Rico urban areas, it is an important part of the addressing format, as it describes the location of a specific street. In Puerto Rico, identical street names and address number ranges can be found within the same ZIP Code. In these cases, the urbanization name is the only element that correctly identifies the location of a particular address. Generally, the abbreviation URB is placed before the urbanization name.

    7. Below is a table of examples of correct address coding:

      Tax Return Address Correct Coding
      URB. Jardines de San Blas A-4 URB. Jardines de San Blas A-4
      Estancias De Tortuguero,
      521 Calle Tulipa
      Estancias De Tortuguero
      521 Calle Tulipa
      Bo Rocha Comunidad LaSalle HC 02 Box 12811 Bo Rocha Comunidad LaSalle
      HC 02 Box 12811
      Puerto Nuevo 512 Calle Aragon Puerto Nuevo
      512 Calle Aragon
      Urb San Rafael EST Calle Violeta E-19 Buzon 246 Urb San Rafael EST
      Calle Violeta E-19 Buzon 246
      Cond. Hato Rey Plaza Jesus T Pinero #200 Apt 6-M Cond. Hato Rey Plaza
      Jesus T Pinero #200 Apt 6-M
      URB Ciudad Jardin de Bairoa 88 Calle Franca URB Ciudad Jardin de Bairoa
      88 Calle Franca
      Villa Fortuna / Via Leticia 4LS-10 Villa Fortuna
      Via Leticia 4LS-10
      Plaza Antillana 151 Calle Caesar Gonzalez Apt 6203 Plaza Antillana
      151 Calle Caesar Gonzalez Apt 6203
      Reina de Los Angeles U-11 Calle 1 Reina de Los Angeles
      U-11 Calle 1

Mailing Address

  1. There are two types of international mailing addresses:

    1. U.S. Territory address

    2. Foreign Country address (address not within the 50 United States, District of Columbia, or any U.S. Territory)

  2. For domestic addresses, refer to IRM 3.11.3.

International Mailing Address
  1. A U.S. Territory Address includes:

    1. Street Address - if the street address is missing or incomplete, underline the name control.

      Caution:

      Do not delete any reference of Urbanization or URB for Puerto Rico.

      Note:

      For Puerto Rico address AIL editing, see IRM 3.21.3.12.3.3.

      Note:

      Multiple Addresses or no Mailing Address, see IRM 3.11.3

      .

    2. City

    3. U.S. Territory - must be abbreviated with a valid two (2) character state abbreviation. Circle out the U.S. Territory, and edit the abbreviation listed below. See Figure 3.21.3-2:
      • AS - American Samoa
      • GU - Guam
      • MP - Commonwealth of the Northern Mariana Islands
      • PR - Puerto Rico
      • VI - Virgin Islands

    4. ZIP Code - Edit the ZIP code, if missing. See Exhibit 3.21.3-6 and Figure 3.21.3-3 if unable to edit the ZIP code.

      Figure 3.21.3-2

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      Figure 3.21.3-3

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  2. Federated States of Micronesia, Marshall Islands, and Palau are not territories, but they use the same addressing method as U.S. territories:

    1. Street Address

    2. City

    3. Country name abbreviated with a valid two (2) character state abbreviation. Circle out the country name, and edit the abbreviation listed below:
      FM - Federated States of Micronesia
      MH - Marshall Islands
      PW - Palau

    4. ZIP Code - edit the ZIP code if missing. See Exhibit 3.21.3-6 if unable to edit the ZIP code.

  3. A Foreign Country Address includes:

    1. Street Address - underline the street address or location as the additional information line

      Caution:

      When an address is short (no city, state, province, or postal code is present), such as those from Hong Kong, the use of an AIL is not needed - Do Not Underline the AIL, but do /country/$. See Figure 3.21.3-4.

      Note:

      If a P.O. Box and street address are present, underline both as the AIL.

      Note:

      If the street address is missing or incomplete, refer to IRM 3.11.3.9.2.3.

    2. City

    3. Foreign Province/State/County and Foreign mail routing code/postal code

    4. Foreign Country Name in a /country name/$ format (see Figure 3.21.3-5)

  4. If a domestic and foreign address are both present, circle out the foreign address.

    Note:

    If the deleted address is the only foreign aspect of the return, rebatch the coded return to a domestic program.

    Figure 3.21.3-4

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    Figure 3.21.3-5

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City
  1. Many cities share names with states/provinces or countries. Do not delete the city name.

  2. For domestic addresses, refer to IRM 3.11.3.9.2.4.

State
  1. For domestic addresses, refer to IRM 3.11.3.9.2.4.

Province/State/County of Foreign Addresses
  1. States/provinces/counties for the countries listed below must be abbreviated. Circle out the state/province/county, and edit the abbreviation in its place. See Exhibit 3.21.3-5 for a list of abbreviations.

    • Australia

    • Brazil

    • Canada

    • Cuba

    • Italy

    • Mexico

    • Netherlands

    Caution:

    Many cities share names with states/provinces. Do not delete or abbreviate a city name.

    Note:

    See Figure 3.21.3-6 for coding examples.

    Figure 3.21.3-6

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ZIP Code and Foreign Postal Code (International Mail Routing)
  1. U.S. territories must have a ZIP Code; edit if missing. See Exhibit 3.21.3-6.

  2. A mail routing code/postal code for foreign addresses can contain alpha and/or numeric characters. If missing, edit the mail routing code following the state or province if it can be readily determined. See Figure 3.21.3-7

  3. For domestic addresses, see IRM 3.11.3.

    Figure 3.21.3-7

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APO/FPO/DPO Addresses

  1. APO/FPO/DPO addresses are military mail addresses. APO/FPO/DPO addresses are considered domestic addresses.

  2. APO, FPO or DPO serves as the city name in the mailing address and AA, AE or AP serves as the state code.

  3. Military mail is first mailed to a central processing center in a U.S. city and then transferred to the military mail system. If the taxpayer provides the U.S. city name, circle the city, and edit the appropriate state code using the table below:

    City Edit State Code
    Miami, FL AA
    New York, NY AE
    San Francisco, CA AP

  4. If the taxpayer provides the name of a foreign city or country, circle the foreign city or country name, and edit the appropriate state code using the table below:

    If the foreign city/country is located in Edit State Code
    Central America, South America, or the Caribbean AA
    Europe, the Middle East, Africa, or Canada AE
    Asia or the Pacific AP

  5. For additional instructions, see IRM 3.11.3.

Country Name

  1. The name of the country in a foreign address must be edited using "/Country/$."

    Caution:

    If a foreign city/country is present, along with an APO/DPO/FPO address, circle the foreign address, leaving the APO/DPO/FPO address.

  2. If a domestic and foreign address are both present, circle out the foreign address.

    Note:

    If the deleted address is the only foreign aspect of the return, rebatch the coded return as domestic.

  3. When an address is short (no city, state, province, or postal code), such as those from Hong Kong, the use of an AIL is not needed - Do Not Underline the AIL, but edit /Country/$. See Figure 3.21.3-4.

  4. If the country is missing and it can be readily determined, edit the country. See Exhibit 3.21.3-7.

  5. The country name in a foreign address must be spelled out. See examples below and Figure 3.21.3-8:

    • UAE - circle and edit /United Arab Emirates/$

    • UK - circle and edit /United Kingdom/$

    • ROC - circle and edit /Taiwan/$

    • SAR - circle and edit /Hong Kong/$ or /Macau/$, as appropriate

    • PRC or PROC - circle and edit /China/$

    Exception:

    The countries listed below must be abbreviated as follows:

    Country Abbreviation
    Ashmore and Cartier Islands Ashmore and Cartier Is
    Bosnia and Herzegovina Bosnia Herzegovina
    British Indian Ocean Territory British Indian Oc Terr
    British Virgin Islands British VI
    Central African Republic Central African Rep
    French Southern and Antarctic Lands FR Southern Antarctic
    Heard Island and McDonald Islands Heard Is McDonald Is
    Macedonia, The Former Yugoslav Republic of; or Macedonia North Macedonia
    Saint Pierre and Miquelon St Pierre Miquelon
    Saint Vincent and The Grenadines St Vincent Grenadines
    Serbia and Montenegro Serbia Montenegro
    South Georgia and The South Sandwich Islands S Georgia S Sandwich
    Turks and Caicos Islands Turks and Caicos Is

    Figure 3.21.3-8

    This is an Image: 34010008.gif

    Please click here for the text description of the image.

  6. Hong Kong and China are considered separate countries for tax purposes. If the taxpayer puts "Hong Kong China" as the country in the caption area, circle out China.

  7. Macau (or Macao) and China are considered separate countries for tax purposes. If the taxpayer puts "Macau (or Macao) China" as the country in the caption area, circle out China.

  8. If the country name contains, "Republic of," or Kingdom of, edit to leave the country name.

    Exception:

    If R.O.C. or Republic of China is present in the caption, circle and edit "/Taiwan/$."

  9. If any of the countries that are part of the United Kingdom (Great Britain, England, Northern Ireland, Scotland, and Wales) are present in the caption, circle and edit the country as "/United Kingdom/$."

  10. Accept Palestine, Palestinian Territories, or similar as the country name when no other country is present in the caption area.

Filing Status Editing - General Information for Form 1040/Form 1040A/Form 1040EZ

  1. The filing status (FS) is used to determine the taxpayer’s standard deduction amount, eligibility for the earned income tax credit, and to compute their tax.

  2. The instructions in this subsection are for determining and editing the correct FS when processing Form 1040, Form 1040A, or Form 1040EZ.

    Reminder:

    Form 1040A and Form 1040EZ are valid for TY17 and prior only.

  3. Edit the filing status by either checking the appropriate box or by editing the Filing Status Code (FSC) to the appropriate area.

  4. The meanings of the filing status codes are:

    1. FSC "1" - Single

    2. FSC "2" - Married filing jointly

    3. FSC "3" - Married filing separately (MFS) (spouse dependent/exemption is not claimed)

    4. FSC "4" - Head of household (HOH)

    5. FSC "5" - Qualifying surviving spouse (QSS)

    6. FSC "6" - Married filing separately (MFS) (spouse dependent/exemption is claimed)

  5. Edit CCC "Q" when the filing status is 4 or 5, there are no dependents listed on the return, and a qualifying non-dependent is listed:

    • In the filing status section of the return,

    • On Form 2441,

    • On Form 8814, or

    • On Schedule EIC.

Determining the Filing Status

  1. For complete instructions see IRM 3.11.3.12.2 through IRM 3.11.3.12.2.5.

Dependents for Form 1040/Form 1040A

  1. For complete instructions, see IRM 3.11.3.13.

    Exception:

    The instruction to edit a dependent that did not live in the United States to position 5 does not apply when the dependent lived with the taxpayer in a foreign country or U.S. territory.

Dependent Coding

  1. For complete instructions, see IRM 3.11.3.13.1.

Dependent Name Control and TIN

  1. For complete instructions, see IRM 3.11.3.13.2.

Form 1040 - General Information

  1. Some returns require special editing procedures. The tax examiner must review the return for taxpayer notations or other indications of the conditions found in the Special Returns section in IRM 3.21.3.9 or IRM 3.11.3.

  2. If there is any indication that the taxpayer is claiming the benefit of Article XXV (Non-Discrimination) of the U.S.-Canada Income Tax Treaty (e.g., notated by the taxpayer in the top-center margin of the tax return) and Form 1040-NR is not attached, correspond for Form 1040-NR using Form 9143.

    Note:

    Use the following literal when corresponding for Article XXV (Non-Discrimination): "If you are claiming Article XXV of the U.S. - Canada Income Tax Treaty, you must file Form 1040-NR. Please complete, sign, and return Form 1040-NR along with all necessary forms, schedules, and federal tax withholding statements."

Income, Adjustments, and Credits - Lines 1a Through 33

  1. Edit amounts on lines 1a through 23 in dollars only.

  2. Edit amounts on lines 24 through 33 in dollars and cents.

Line 1a - Total Amount from Form(s) W-2, Box 1
  1. If the taxpayer claims exempt income under IRC 933 on Form 1040, Form 1040A (TY17 and prior), or Form 1040EZ (TY17 and prior), see IRM 3.21.3.80.2.

  2. If the taxpayer claims an exclusion under IRC 931 on Form 1040, Form 1040A (TY17 and prior), or Form 1040EZ (TY17 and prior), see IRM 3.21.3.76.1.2.

  3. If the taxpayer claims exempt income under IRC 893 or 871, see IRM 3.21.3.16.8.

  4. If the taxpayer exempts income under IRC 911 or claims the Foreign Earned Income Exclusion on Schedule 1, line 8d or 8z, see IRM 3.21.3.41.1.

    Caution:

    If a Foreign Earned Income Exclusion is claimed on Schedule 1, line 8d or 8z, ensure that the taxpayer reported all the related earned income either on Form 1040 on lines 1a through 1h or on Schedule 1 on line 3, 5, 6, or 8z. If the taxpayer did not report the earned income, edit the income to a line as follows: edit Form W-2, box 1 income to Form 1040, line 1a; edit income that belongs on Form 1040, lines 1b through 1h to Form 1040, line 1z; edit Schedule C income to Schedule 1, line 3; edit Schedule E income to Schedule 1, line 5; and edit Schedule F income to Schedule 1, line 6. If source of income cannot be determined, edit income to line 1a.

  5. For additional instructions, see IRM 3.11.3.

Line 1b - Household Employee Wages (HSH) (Not Transcribed)
  1. If an amount is present on line 1b, edit SPC "E" .

Line 1e - Taxable Dependent Care Benefits (DCB) - Form 2441 (Not Transcribed)
  1. If an amount is present on line 1e, Form 2441 must be attached. If missing, correspond for Form 2441.

Line 1f - Employer-Provided Adoption Benefits - Form 8839 (Not Transcribed)
  1. If an amount is present on line 1f, Form 8839 must be attached. If missing, correspond for Form 8839.

Line 1g - Wages - Form 8919 (Not Transcribed)
  1. If an amount is present on line 1g, Form 8919 must be attached. If missing, correspond for Form 8919.

Line 1i - Nontaxable Combat Pay Election
  1. Nontaxable Combat Pay is entered on line 1i. If found elsewhere on return, delete where found and edit to line 1i.

Line 1z - Total Wages
  1. Compute and edit line 1z when it is blank, dash, zero, or illegible and there are any entries on lines 1a through 1h.

Lines 2a and 2b - Tax-Exempt Interest and Taxable Interest
  1. For complete instructions, see IRM 3.11.3.

Lines 3a and 3b - Qualified Dividends and Ordinary Dividends
  1. For complete instructions, see IRM 3.11.3.

Lines 4a and 4b - IRA Distributions and Taxable IRA Distributions
  1. For complete instructions, see IRM 3.11.3.

Lines 5a and 5b - Pensions and Annuities and Taxable Pensions and Annuities
  1. For complete instructions, see IRM 3.11.3.

Lines 6a, 6b, and 6c- Social Security Benefits and Taxable Social Security Benefits
  1. If the taxpayer resides in one of the countries listed below, "X" any reported Social Security Benefits where found:

    • Canada

    • Egypt

    • Germany

    • Ireland

    • Israel

    • Italy (must also be a citizen of Italy for the exemption to apply)

      Note:

      In order for Italy to qualify, they must have an Italian address.

    • Romania

    • United Kingdom (including Great Britain, England, Northern Ireland, Scotland, and Wales)

  2. If Social Security income, Form SSA-1042S, Form RRB-1042S, and withholding are the only income/withholding reported on the return, see IRM 3.21.3.15.1.28

  3. If the taxpayer reports worldwide income (i.e., there are multiple types of income and/or withholding reported on the return) AND the only "questionable" aspect of the return is the presence of Form SSA-1042S, process the return as submitted and edit Form SSA-1042S withholding to the dotted portion of line 33 of Form 1040.

  4. Edit CCC "H" when the taxpayer marks the line 6c box.

  5. For additional instructions, see IRM 3.11.3.

Line 7 - Capital Gain or Loss
  1. For complete instructions, see IRM 3.11.3.

Line 8 - Other Income
  1. For complete instructions, see IRM 3.11.3.

Line 9 - Total Income
  1. Compute and edit line 9 when it is blank, dash, zero, or illegible and there are any entries on lines 1z, 2b, 3b, 4b, 5b, 6b, 7, or 8.

    Exception:

    Do not adjust or compute line 9 if making an adjustment to Form 1040, line 1a or Schedule 1, line 9.

Line 10 - Adjustments to Income
  1. For complete instructions, see IRM 3.11.3.

Line 11 - Adjusted Gross Income
  1. Compute and edit line 11 when it is blank, dash, zero, or illegible by subtracting line 10 from line 9.

Line 12 - Standard Deduction or Itemized Deductions (Not Transcribed)
  1. If there is an indication near line 12 or a statement for line 12 that the taxpayer is prorating their standard deduction under IRC 933, accept the taxpayer's prorated amount for the standard deduction. Do not correspond for Schedule A.

  2. For additional instructions, see IRM 3.11.3.

Line 13 - Qualified Business Income Deduction
  1. If a Qualified Business Income Deduction amount is present, Form 8995 or Form 8995-A must be attached. If missing, correspond for Form 8995-A.

    Note:

    See IRM 3.11.3, Form 8995/8995-A/8995-A Schedule C - Qualified Business Income Deduction, for possible editing of FPC "H" .

Line 15 - Taxable Income
  1. For complete instructions, see IRM 3.11.3.

Line 16 - Tax
  1. For complete instructions, see IRM 3.11.3.

Line 17 - Additional Taxes (Not Transcribed)
  1. For complete instructions, see IRM 3.11.3.

Line 19 - Child Tax Credit or Credit for Other Dependents - Schedule 8812
  1. Reserved

Line 20 - Nonrefundable Credits (Not Transcribed)
  1. If an amount is present on line 20, Schedule 3 must be attached. Correspond, if missing.

  2. For additional instructions, see IRM 3.11.3.

Line 21 - Total Statutory Credits
  1. Compute and edit line 21 when it is blank, dash, zero, or illegible by adding lines 19 and 20.

Line 23 - Other Taxes
  1. If an amount is present on line 23, and Schedule 2 is not attached or Schedule 2 is attached and lines 4 through 18 are blank, correspond for Schedule 2.

    Exception:

    If a Schedule 2 can be dummied from attachments, do not correspond unless already corresponding for other missing information.

  2. For additional instructions, see IRM 3.11.3.

Line 24 - Total Tax
  1. For complete instructions, see IRM 3.11.3.

Lines 25a through 25d - Withholding
  1. U.S. source income is reported on Form W-2, Form 1042-S, Form SSA-1042S, Form RRB-1042S, Form 1099 series, Form 8805, Form 8288-A, or a statement of income.

  2. Valid sources of U.S. Withholding include Form W-2, Form SSA-1042S, Form RRB-1042S, Form 1042-S, Form 1099 series, Form 8805, Form 8288-A, and Form 8959. Review all withholding documents to ensure that the withholding amounts claimed by the taxpayer are U.S. Withholding (Federal Income Tax Withheld). Withholding from Guam and CNMI can be claimed on lines 25a through 25d.

    Caution:

    If the only income on the return is from Guam, see IRM 3.21.3.77 or from the Commonwealth of the Northern Mariana Islands, see IRM 3.21.3.78.

  3. If the return contains withholding from American Samoa (Form W-2AS), Puerto Rico (Form 499R-2/Form W-2PR), or Virgin Islands (Form W-2VI), take one of the following actions:

    1. If all of the withholding is from American Samoa (Form W-2AS), Puerto Rico (Form 499R-2/Form W-2PR), or Virgin Islands (Form W-2VI), "X" withholding on line 25d.

      Caution:

      If the only income on the return is from American Samoa, see IRM 3.21.3.76; from Virgin Islands, see IRM 3.21.3.79; or from Puerto Rico, see IRM 3.21.3.80.

    2. If U.S. withholding is also claimed, adjust the withholding amount to include only the U.S. withholding.

  4. If line 25d is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and a source of withholding is not attached, correspond for withholding support if unable to verify the amount through research. Minimum requirements for substitute statement are: Name of Employer or EIN, Income, and Withholding.

    Exception:

    If the research indicates the withholding is claimed from Form 1042-S, correspond for withholding support.

    Note:

    Research IRP for withholding (when available) before corresponding. Do not research if corresponding for other missing information. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Follow the instructions below for line 25d:

    If Line 25d is And Then
    Blank, Dash, or Zero At least one source of withholding is present on Form W-2, Form W-2G, Form 1099 (series), or IRS Transcript Edit the withholding amount(s) to line 25d.

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Any amount and support for the withholding is present Any withholding is from:
    • Form 1099-OID or

    • Form 1099-A

    Refer the return to Frivolous Return Program (FRP).
    Any amount The supporting withholding document is a foreign document "X" line 25d.

  6. Edit CCC "8" on a refund return when withholding is significant and there is only a single supporting document attached that is one of the following:

    • A substitute statement (e.g., substitute Form W-2 or employer-provided earnings statement with year-to-date totals) or attachment or worksheet

      Note:

      If the only support for withholding is from a single or multiple Forms 4852 and there are no other withholding documentation is present, edit CCC "8" .

    • Handwritten

    • Other than computer-printed Form W-2

    • Altered name, SSN, wages, or federal income tax withheld

      Exception:

      Do not edit CCC "8" when Form 1099-R, Form W-2G, or IRS income document is attached, or if the return is identified as a military or combat zone return.

      Note:

      To be considered a "single supporting document," the document must show support from only one employer. Consider Form 4852 and an employer-provided earnings statement with the same employer and identical amounts to be a "single supporting document" .

  7. If Form 1042-S is attached to Form 1040, take the following actions:

    If Then
    Refund and the only income reported is from the Form 1042-S Correspond for filer's U.S. status, using Form 9143, box 24.

    Exception:

    Do not correspond if the taxpayer states they are a U.S. Resident Alien or the taxpayer has provided a copy of their resident alien card. Delete Form 1042-S withholding from line 25d and edit to the dotted portion of line 33.

    "Worldwide Income" is reported or the return is other than a refund Delete Form 1042-S withholding from line 25d and edit to the dotted portion of line 33.

  8. Delete Form 8805 withholding from line 25d, and edit to the dotted portion of line 33, Form 1040.

    1. If the TIN on Form(s) 8805 is missing or other than the TIN in the caption area, and the credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"X" the credit where reported.

      Exception:

      If a TIN has been newly assigned, but is not on Form 8805 Do Not "X" the credit.

      Note:

      Any statement or document from a withholding agent that is submitted in lieu of Form 8805 must include the name and address of the U.S. withholding agent, the agent’s U.S. TIN (EIN or SSN), and the name in which the tax withheld was reported. If the name or TIN of the taxpayer claiming the refund is different or withholding agent information is not included, "X" the credit.

  9. If Form 8288-A is attached or noted on any line, follow the instructions in IRM 3.21.3.15.1.28 (10), IRM 3.21.3.15.1.28 (11), and IRM 3.21.3.15.1.28 (12).

  10. If any Form 8288-A credit is claimed, verify that Form 8288-A is attached and the Date of Transfer on Form 8288-A (box 1) is within the Tax Period of the return being filed.

    1. If Form 8288-A or a signed or initialed settlement statement/closing agreement is not attached, correspond.

    2. If the Date of Transfer on Form 8288-A (box 1) or the signed or initialed settlement statement/closing agreement is not within the Tax Period of the return, "X" the entry where reported and edit only the credit(s) that are within the tax period of the return. If the return is being filed for a fiscal period, verify that the Date of Transfer falls within the fiscal period.

      Caution:

      If "Original DOT" is notated on the top right side of Form 8288-A, accept that date as the official Date of Transfer.

  11. If the Date of Transfer on Form 8288-A is in 2024 and:

    1. The return is numbered, "X" the credit(s).

    2. The return is unnumbered and Form 843 is attached, detach Form 843 along with Form 8288-A and route to Accounts Management. "X" line 25d and process the return.

    3. The return is unnumbered and Form 843 is not attached, send the return back to the taxpayer. Correspond using Form 9143, box 25.

    Reminder:

    If "Original DOT" is notated on the top right side of Form 8288-A, accept that date as the official Date of Transfer.

  12. All Form 8288-A credits must be verified following procedures in IRM 3.21.25.17. If Form 8288-A is attached with a Date of transfer within the Tax Period of the return, and the return is:

    1. Numbered: Request verification of the credit from the FIRPTA Unit and edit Action Code "420" .

    2. Unnumbered: Follow the table below:

      If And Then
      Credits have not been verified   Completely code and edit the return, then place return in designated area for verification.

      Note:

      The verification slip (Form 13698) or printout is attached to the tax form after the credit verification is completed.

      Credits are verified The verified amount is the same or greater than the amount the taxpayer reported, Delete the Form 8288-A credit from line 25d and edit the taxpayer’s entry on the dotted portion of line 33.
      Credits are verified The verified amount is less than the amount the taxpayer reported,
      1. "X" the amount reported by the taxpayer.

      2. Delete the amount from line 25d and edit the verified amount to the dotted portion of line 33.

  13. Form 1040 filed with Form SSA-1042S/Form RRB-1042S:

    1. Forms 1040 on which the taxpayer reports worldwide income (wages, interest, investment income, self-employment income, SE tax, etc.) along with Form SSA-1042S/Form RRB-1042S benefits are not subject to the 30% tax rate and should be processed without citizenship or residency documentation. Process per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 25d and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 33, Form 1040.

    2. Nonresident aliens who file jointly with a U.S. citizen and elect to be treated as resident aliens for tax purposes are not subject to the 30% tax rate. Process per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 25d and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 33, Form 1040.

    3. Residents of U.S. Territories are not subject to the 30% tax rate. Process per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 25d and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 33, Form 1040.

  14. A resident alien (without worldwide income) can receive a refund for incorrectly withheld taxes on Social Security Benefits reported on Form SSA-1042S/Form RRB-1042S from SSA or IRS. If SSA cannot refund the taxes withheld, the IRS will process a tax return and refund the withholding when ALL the criteria below is met:

    • The taxpayer files either Form 1040 or Form 1040A (TY17 and prior)

    • A copy of the "green card" is attached

    • A signed declaration is attached that includes the following statement (or a signed statement with similar wording):
      "The SSA withheld taxes erroneously because I am a U.S. permanent resident and my green card has neither been revoked nor administratively or judicially determined to have been abandoned. I am filing a U.S. income tax return for the taxable year as a resident alien reporting all of my worldwide income. I have not yet claimed benefits for the taxable year under an income tax treaty as a nonresident alien."

    1. If the taxpayer is filing to claim a refund and does not attach a green card and/or declaration statement (see criteria above), "X" the withholding and correspond for the following if missing:
      • Green card

      Note:

      The reference made to green card includes, Form I-551 for all years after 1996 and Form I-151 is only acceptable as proof of permanent residency for TY96 and prior. See Exhibit 3.21.3-13.


      • A signed declaration statement

    2. If the taxpayer is claiming a refund, both green card and declaration statement are attached, and none of the conditions in IRM 3.21.3.15.1.28 (13) are met, "X" the withholding.

Line 26 - Estimated Tax Payments
  1. For complete instructions, see IRM 3.11.3.

Line 27 - Earned Income Credit (EIC)
  1. Taxpayers residing outside of the U.S. are generally not entitled to EIC.

  2. If the taxpayer is not claiming EIC, edit RPC "B" .

  3. If a taxpayer is claiming EIC and attaches a valid Form 2555 or Form 2555-EZ (TY18 and prior), and excludes foreign earned income, "X" both the Form 1040, line 27 amount and Schedule EIC, if attached.

  4. If the taxpayer is claiming EIC and claims income is exempt under IRC 933, disallow EIC. "X" both Form 1040, line 27 and Schedule EIC, if attached.

  5. If the taxpayer is claiming EIC and resided outside of the U.S. for the entire year, disallow EIC. "X" both Form 1040, line 27 and Schedule EIC, if attached.

    Note:

    Do not use the caption address to determine if the taxpayer resided outside the U.S. for the entire year.

  6. If the return has a U.S. address and all earned income (e.g., wages, self-employment) is from a U.S. territory, then "X" both Form 1040, line 27 and Schedule EIC, if attached.

  7. If none of the conditions in paragraphs (3) through (6) are present, the taxpayer may qualify for EIC if they resided inside the U.S. for more than half of the tax year and they also met all requirements for EIC given in IRM 3.11.3. Indications that the taxpayer resided inside the U.S. for more than half of the tax year are either:

    • The taxpayer's address on Form(s) W-2 is one of the 50 states or District of Columbia or

    • The taxpayer paid state or local taxes to one of the 50 states or District of Columbia

    Note:

    The taxpayer’s address in the caption and the employer’s address on Form(s) W-2 are not indications.

    1. If the taxpayer qualifies, allow EIC.

    2. If the taxpayer does not qualify, "X" line 27 and Schedule EIC, if attached.

      Exception:

      Do not "X" line 27 and Schedule EIC if the only reason for deleting is that a source of earned income is missing, when research for the source has not yet been done.

  8. U.S. military personnel stationed outside of the U.S. on extended active duty are considered to live in the U.S. during that duty period for purposes of the EIC. They must also meet all requirements for EIC given in IRM 3.11.3. If the taxpayer met all requirements, allow EIC. To determine whether the taxpayer is military personnel, search the signature area, Forms W-2(s) and/or attachments for any of the following indications:

    1. The occupation in signature area indicates U.S. Air Force, U.S. Army, U.S. Coast Guard, U.S. Marines, U.S. Navy, etc.

    2. DCPS CIVPAY DIRECTORATE

    3. DFAS - PE/P

    4. DFAS - ATTN: DFAS - PMTC/IN

    5. Defense Finance and Accounting Service Cleveland Center

    6. USAF - Active Duty

    7. DFAS - PMJFC/DE

    8. Commanding Office USCG Human Resources Service Information Center

  9. Correspond when EIC is being claimed and the source of income is not indicated or attached (W-2) and cannot be determined through research:

    1. If using Form 13900, use paragraph a.

    2. If using Form 9143, use paragraph 10.

  10. For additional instructions, see IRM 3.11.3.

Line 28 - Additional Child Tax Credit (Schedule 8812)
  1. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, has only Puerto Rico source income (e.g., Form(s) 499R-2/W-2PR), and appears to be filing only to claim the additional child tax credit, correspond following the instructions at IRM 3.21.3.80.1.1 (2).

    Exception:

    If you can determine the taxpayer is U.S. military personnel, see instructions in (3) below.

    Note:

    Do not convert Form 1040 or Form 1040A (TY17 and prior) to Form 1040-PR/SS.

  2. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, but is filing a Form 1040 to report non-Puerto Rico source income along with claiming the additional child tax credit, continue processing the Form 1040.

  3. If the taxpayer is a resident of CNMI, Guam, American Samoa, or Virgin Islands, "X" line 28 unless IRM 3.21.3.15.1.31 (4) applies.

  4. If the taxpayer is a resident in any of the U.S. territories and you can determine the taxpayer is U.S. Military personnel, the taxpayer is considered a resident of the U.S. for the entire year and the return should be processed using the domestic instructions in IRM 3.11.3. Search the occupation area, Forms W-2, and/or attachments for any indications such as the following:

    1. The occupation in the signature area indicates military, U.S. Air Force, U.S. Army, U.S. Coast Guard, U.S. Marines, or U.S. Navy.

    2. DCPS CIVPAY DIRECTORATE

    3. DFAS-PE/P

    4. DFAS-ATTN:DFAS-PMTC/IN

    5. Defense Finance and Accounting Service Cleveland Center

    6. USAF- Active Duty

    7. DFAS-PMJFC/DE

    8. Commanding Office USCG Human Resources Service Information Center

  5. If an amount is present on line 28 and at least three qualifying children with SSNs are claimed as dependents, Schedule 8812 must be attached. If missing, correspond for Schedule 8812.

    Note:

    For TY18 and later, ITINs are not valid on Schedule 8812.

  6. For additional instructions, see IRM 3.11.3.

Line 29 - Refundable American Opportunity Credit
  1. If an amount is claimed on line 29, Form 8863 must be attached. If missing, correspond for Form 8863.

    Note:

    If the taxpayer has an entry on both Schedule 3, line 3 and Form 1040, line 29, correspond for only one missing Form 8863. Use the first entry amount and line number on the return/Schedule.

Line 31 - Other Payments and Refundable Credits (Schedule 3, Line 15)
  1. If there is an amount on Line 31, Schedule 3 must be attached. If missing and cannot be dummied from attachments, correspond for Schedule 3.

  2. See IRM 3.11.3 for instructions on dummying or corresponding.

Line 32 - Total Other Payments and Refundable Credits
  1. Compute and edit line 32 when blank and there are entries leading to a total.

    Note:

    Do not include "888" when it has been edited on line 27.

Line 33 - Total Payments
  1. Take one of the following actions when there is an amount on line 33, lines 25d through 32 are blank, and no withholding documents are present:

    If there is an amount on line 33 of And Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is a significant entry on Form 1040, line 1a, 4b, or 5b or Schedule 1, line 7 Correspond for an explanation of Form 1040, line 33.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is no significant entry on Form 1040, line 1a, 4b, or 5b or Schedule 1, line 7 Edit the amount to Form 1040, line 26.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is a significant entry on Form 1040, line 1a, 4b, or 5b or Schedule 1, line 7 Edit the amount to Form 1040, line 25d, and edit RPC "G" .
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is no significant entry on Form 1040, line 1a, 4b, or 5b or Schedule 1, line 7 Edit the amount to Form 1040, line 26.

  2. For additional instructions, see IRM 3.11.3.

Refund or Amount Owed - Lines 34 through 38

  1. Edit amounts on lines 35 through 38 in dollars and cents.

  2. Line 34 is not a T-line. Lines 35a and 37 are T-Compute lines.

Line 35a - Refund
  1. For complete instructions, see IRM 3.11.3.

Lines 35b, 35c, and 35d - Direct Deposit Information
  1. For complete instructions, see IRM 3.11.3.

Line 36 - Estimated Tax Credit Elect
  1. For complete instructions, see IRM 3.11.3.

Line 37 - Amount You Owe (Balance Due)
  1. For complete instructions, see IRM 3.11.3.

Line 38 - Estimated Tax Penalty (Form 2210 or Form 2210-F)
  1. For complete instructions, see IRM 3.11.3.

Third Party Designee

  1. Reserved

Signature

  1. For complete instructions, see IRM 3.11.3.

Occupation

  1. Reserved

Identity Protection Personal Identification Number (IP-PIN)

  1. Identity Protection Personal Identification Number (IP PIN) is located in the "Sign Here" area of the return.

  2. For additional instructions, see IRM 3.11.3.

Paid Preparer Data

  1. For complete instructions, see IRM 3.11.3.

Preparer Code
  1. For complete instructions, see IRM 3.11.3.

Preparer TIN (PTIN)
  1. For complete instructions, see IRM 3.11.3.

Preparer Phone Number
  1. For complete instructions, see IRM 3.11.3.

Schedule 1 (Sequence 01) - Additional Income and Adjustments to Income

  1. The following information pertains to Schedule 1 only.

  2. For TY20 and later, Schedule 1 may be filed with Form 1040 or Form 1040-NR. See IRM 3.21.3.84.19.

  3. The following are the T-lines and T-Compute lines on Schedule 1:

    T-Lines T-Compute Lines
    Line 1 Line 9
    Line 2a Line 25
    Lines 3 through 7  
    Line 8r (TY22 and later)  
    Line 9  
    Lines 11 through 18  
    Lines 19a and 19b  
    Lines 20 and 21  
    Line 23  
    Line 25  
    Form 982 Indicator (dotted area left of Line 11)  

  4. Lines 1 through 10 are for additional income and lines 11 through 26 are for adjustments to income.

  5. For additional instructions, see IRM 3.11.3.

Schedule 1, Line 1 - Taxable Refunds

  1. Reserved

Schedule 1, Lines 2a and 2b - Alimony Received and Date of Divorce

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 3 - Business Income or Loss

  1. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or U.S. Virgin Islands files Form 1040, reporting self-employment tax on Schedule 2, line 4, and the only income on the return is from Schedule C, Schedule E (Part II), and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040, and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  2. If Schedule 1, line 3 contains self-employment income of $434 or more and Schedule SE is not attached and Schedule 2, line 4 does not have a significant entry:

    • Edit RPC "S" if the taxpayer resides in one of the following countries:

      RPC "S" Countries:
      Australia
      Austria
      Belgium
      Brazil
      Canada
      Chile
      Czech Republic
      Denmark
      Finland
      France
      Germany
      Greece
      Hungary
      Iceland
      Ireland
      Italy
      Japan
      Luxembourg
      Netherlands
      Norway
      Poland
      Portugal
      Slovak Republic (Slovakia)
      Slovenia
      South Korea
      Spain
      Sweden
      Switzerland
      United Kingdom

      Reminder:

      Includes Great Britain, England, Northern Ireland, Scotland, and Wales

      Uruguay

  3. For additional instructions, see IRM 3.11.3.

    Exception:

    Do not correspond for SE tax liability when the taxpayer resides in one of the countries listed in IRM 3.21.3.16.3 (2) above.

Schedule 1, Line 4 - Other Gains or Losses

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 5 - Rental Real Estate, Royalties, Partnerships, S Corporations, and Trusts

  1. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or U.S. Virgin Islands files Form 1040, reporting self-employment tax on Schedule 2, line 4, and the only income on the return is from Schedule C, Schedule E (Part II), and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040, and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  2. For additional instructions, see IRM 3.11.3.

Schedule 1, Line 6 - Farm Income or Loss

  1. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or U.S. Virgin Islands files Form 1040, reporting self-employment tax on Schedule 2, line 4, and the only income on the return is from Schedule C, Schedule E (Part II), and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040, and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  2. If Schedule 1, line 6 contains Self-Employment income of $434 or more and Schedule SE is not attached and Schedule 2, line 4 does not have a significant entry:

    • Edit RPC "S" if the taxpayer resides in one of the following countries:

      RPC "S" Countries:
      Australia
      Austria
      Belgium
      Brazil
      Canada
      Chile
      Czech Republic
      Denmark
      Finland
      France
      Germany
      Greece
      Hungary
      Iceland
      Ireland
      Italy
      Japan
      Luxembourg
      Netherlands
      Norway
      Poland
      Portugal
      Slovak Republic (Slovakia)
      Slovenia
      South Korea
      Spain
      Sweden
      Switzerland
      United Kingdom

      Reminder:

      Includes Great Britain, England, Northern Ireland, Scotland, and Wales

      Uruguay

  3. For additional instructions, see IRM 3.11.3.

    Exception:

    Do not correspond for SE tax liability when the taxpayer resides in one of the countries listed in IRM 3.21.3.16.6 (2) above.

Schedule 1, Line 7 - Unemployment Compensation (UEC)

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Lines 8a through 8z - Other Income

  1. For international entries on Lines 8a through 8z, follow the table below:

    If And Then
    Line 8z indicates Article XXV (Non-Discrimination) of the U.S.-Canada Income Tax Treaty Form 1040-NR is not attached Correspond for Form 1040-NR. See IRM 3.21.3.83.5.

    Note:

    Use Form 9143 and the following literal when corresponding for Article XXV, "If you are claiming Article XXV of the U.S.-Canada Income Tax Treaty, you must file Form 1040-NR. Please complete, sign, and return Form 1040-NR along with all necessary forms, schedules, and federal tax withholding statements."

    Entry on line 8d, or line 8z indicates Form 2555 or Form 2555-EZ (TY18 and prior) Exclusion Form 2555 or Form 2555-EZ (TY18 and prior) is missing Correspond.
    Entry on line 8d, or line 8z indicates Form 2555 or Form 2555-EZ (TY18 and prior) Exclusion Taxpayer resides in:
    • Baker Island

    • Howland Island

    • Jarvis Island

    • Johnston Atoll

    • Kingman Reef

    • Midway Atoll

    • Palmyra Atoll

    • Wake Island

    Take the following actions:
    1. "X" Schedule 1, line 9,

    2. "X" Form 2555 or Form 2555-EZ,

    3. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9, and

    4. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Exception:

    If a return shows income earned in the Federated States of Micronesia, Marshall Islands, or Palau Islands and Form 2555 or Form 2555-EZ is attached and valid, ALLOW the exclusion.

    Entry on line 8d, or line 8z indicates Form 2555 or Form 2555-EZ (TY18 and prior) Exclusion Two Forms 2555 and/or Form 2555-EZ (TY18 and prior) are submitted, and only one Form 2555 and/or Form 2555-EZ is valid
    1. Adjust Schedule 1, line 9 by deleting the amount for the invalid Form 2555 or Form 2555-EZ,

    2. "X" the invalid Form 2555 or Form 2555-EZ, and

    3. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9.

    Line 8z indicates Form 2555 or Form 2555-EZ (TY18 and prior) Exclusion It is a positive amount Take one of the following actions:
    1. If amount is verified to be a valid exclusion, ensure the exclusion is included as a negative in the total on Schedule 1, line 9, and ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9.

    2. If amount is not a valid exclusion, "X" Schedule 1, line 9, "X" Form 2555 or Form 2555-EZ, and ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9.

    Line 8z indicates IRC 871 (Capital Gains) Taxpayer excludes this on Schedule 1, line 8z and/or 9 If the income is not included on Form 1040, line 7 or Schedule 1, line 4, edit the income to Form 1040, line 7.
    Line 8z indicates IRC 893 or employee of international organization or foreign government Taxpayer provides all of the following:
    • Evidence of non-U.S. citizen status (e.g., copy of an A or G visa, or green card),

    • Written evidence from the U.S. Citizenship and Immigration Services (USCIS) confirming USCIS Form I-508 has not been signed and filed,

    • If an employee of a foreign government, a copy of the U.S. State Department Internal Revenue Code (IRC) Section 893(b) certification or other evidence of meeting the requirements of IRC Section 893(a)(2) and (3), and

    • If an employee of an international organization, either the number of the Presidential Executive Order or an international organization that is listed in Exhibit 3.21.3-4.

      Note:

      IRC 893 does not apply to the North Atlantic Treaty Organization (NATO) or the Ottawa Agreement.

    Allow the exempt amount on Schedule 1, line 9. If the income is not reported on Form 1040, line 1a or Schedule 1, line 3, 5, or 6, edit the income to Form 1040, line 1a.
    Line 8z indicates IRC 893 or employee of international organization or foreign government Taxpayer does not provide all items listed in the box above Correspond. When using Form 13900, mark box K.
    Line 8z indicates IRC 911   See rows 2-5 of this table relating to claim of Form 2555 Exclusion.
    Line 8z indicates IRC 931   See IRM 3.21.3.76.1.2.
    Line 8z indicates IRC 933   See IRM 3.21.3.80.2.
    Line 8z shows a negative amount Taxpayer notates foreign income Correspond for an explanation.
    Line 8z shows one or more of the following:
    • Self-Employment income

    • Form 1099-NEC, box 1 amount

    • Form 1099-MISC, box 7 amount

    Form 2555 or Form 2555-EZ is attached to exclude the income If the income is not reported on Form 1040, line 1a or Schedule 1, line 3, 5, or 6, edit the Self-Employment income, Form 1099-NEC, box 1 amount and/or Form 1099-MISC, box 7 amount to Form 1040, line 1a.
    Line 8z shows one or more of the following:
    • Self-Employment income

    • Form 1099-NEC, box 1 amount

    • Form 1099-MISC, box 7 amount

    Self-Employment income is $434 or more, Schedule SE is not attached, and Schedule 2, line 4 does not have a significant entry Take one of the following actions:
    1. If the taxpayer resides in one of the following countries, edit RPC "S" :

      • Australia

      • Austria

      • Belgium

      • Brazil

      • Canada

      • Chile

      • Czech Republic

      • Denmark

      • Finland

      • France

      • Germany

      • Greece

      • Hungary

      • Iceland

      • Ireland

      • Italy

      • Japan

      • Luxembourg

      • Netherlands

      • Norway

      • Poland

      • Portugal

      • Slovak Republic (Slovakia)

      • Slovenia

      • South Korea

      • Spain

      • Sweden

      • Switzerland

      • United Kingdom

        Reminder:

        Includes Great Britain, England, Northern Ireland, Scotland, and Wales)

      • Uruguay

    2. If the taxpayer does not reside in one of the countries listed above, edit RPC "N" .

    Line 8z indicates a treaty Taxpayer provides:
    • The name of the foreign country of which the taxpayer is a citizen or resident and whose tax treaty with the U.S. provides the exempt status,

    • The treaty article number that allows the exemption, and

    • The amount of "exempt" income during the tax year

    Verify the treaty article and maximum exemption amounts using Exhibit 3.21.3-10:
    1. If valid, ensure the allowed amount of exempt income is included as a negative in the Schedule 1, line 9 total. If the taxpayer has not already reported the income, edit the income to the appropriate line.

      Exception:

      Taiwan and Hong Kong are not considered to be China and are not allowed to exclude income based on China treaties.

    2. If invalid, "X" Schedule 1, line 9, and make sure the income is reported.

    Line 8z indicates a treaty Taxpayer does not provide ALL items listed above. Correspond.

  2. Line 8r, "Scholarship and fellowship grants not reported on Form W-2," is a T-line. If there is an entry on this line, see IRM 3.21.3.16.9 for instructions.

  3. A Fulbright Grant received by a U.S. citizen or U.S. resident alien taxpayer for the purpose of lecturing or teaching in a foreign country is considered a payment for services and is subject to U.S. tax.

    Note:

    If the Fulbright Grant was paid by an agency of the U.S. government, the income may be excluded under the IRC 911, provided the taxpayer is not a U.S. government employee.

  4. If the Housing Deduction amount from Form 2555, line 50 is entered on Schedule 1, line 8z or 9, "X" Schedule 1, line 9, and add the Housing Deduction amount to Schedule 1, line 25. If both the Housing Deduction and the Foreign Earned Income Exclusion are claimed together on Schedule 1, line 8d or 8z, adjust line 9 to remove the Housing Deduction, and add the Housing Deduction to line 25. See IRM 3.21.3.41.9 (7).

  5. Qualified airline employees may exclude some income reported as wages on Form W-2, box 1. This income will be included on Form 1040, line 1a and excluded as a negative on Schedule 1, line 8d or line 8z as "airline payment." Accept as filed.

  6. For additional instructions, see IRM 3.11.3.

Schedule 1, Line 8r - Scholarship and Fellowship Grants Not Reported on Form W-2

  1. Generally, a taxpayer’s entry on Schedule 1, line 8r should include only the amount of scholarship and fellowship grants not reported on Form W-2, reduced by any amount used to pay for tuition and required, course-related expenses.

  2. Scholarship and fellowship income shown on Form W-2 should be reported on Form 1040, line 1a. If it is determined this Form W-2 income is included in the line 8r entry:

    1. Edit the Form W-2 gross income to Form 1040, line 1a, if not already included,

    2. Do not adjust or compute Form 1040, line 9 or 11, and

    3. "X" or adjust the line 8r amount to exclude the income moved to Form 1040, line 1a.

  3. If a taxpayer is claiming that a scholarship or fellowship grant reported on a Form 1098-T or a Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) is exempt under a tax treaty, verify the treaty claim:

    1. If the claim is valid, take the following actions:
      • Edit the gross scholarship and fellowship grant to line 8r, if not already reported there,
      • Verify, or adjust as necessary, that the allowed amount of treaty-exempt grant is included as a negative amount in the Schedule 1, line 9 total, and

      Note:

      The taxpayer is instructed to report the treaty-exempt grant as a negative amount on line 8z along with the required treaty information. If this was correctly done, the proper exemption may already be included in line 9.


      "X" the treaty exemption if found elsewhere on the return.

    2. If the claim is invalid, take the following actions:
      • Edit or adjust the line 8r amount as necessary, following the table instructions in IRM 3.21.3.16.9 (5),
      • Edit or adjust the Schedule 1, line 9 total to account for any adjustments to line 8r and any disallowance of a treaty exemption claim made in lines 8a through 8z, and
      "X" the treaty exemption if found elsewhere on the return.

  4. One or more of the following documents must be attached to support an entry on line 8r. If missing, correspond:

    • Form 1098-T

    • A statement from a college or an educational institution (on their letterhead) that states the amount of the grant, the grantor's name, the dates it covers, and the expenses the grant covers

    • Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) issued by a college or an educational institution

      Note:

      This may be attached when a nonresident alien becomes a resident alien for tax purposes but still receives a Form 1042-S.

  5. After following the above paragraphs, if at least one of the items in IRM 3.21.3.16.9 (4) above is present and EITHER there is still an amount on line 8r that the taxpayer is not validly exempting under a treaty on lines 8a through 8z OR there is a Form 1098-T or a Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) issued by a college or an educational institution attached to the return, where the income is not reported anywhere, follow the instructions in the table below:

    If And Then
    You calculate (1) minus (2) below by:
    1. Adding:

      • All Form 1098-T scholarships or grants, box 5 amounts,

      • All grant income from educational institution statements, and

      • All Form 1042-S (Income Code 16) gross income, box 2 amounts

    2. Subtracting:

      • All Form 1098-T payments received for qualified tuition and related expenses, box 1 amounts and

      • All tuition and required, course-related expenses (fees, books, supplies, equipment) from educational institution statements, receipts, etc.

    The amount calculated by adding all the items in (1) and then subtracting all the items in (2) is greater than the line 8r entry, including when line 8r is blank or zero Edit or adjust line 8r to equal the calculated amount.

Schedule 1, Line 9 - Total Other Income

  1. If line 9 is blank, dash, zero, or illegible and there are any entries on lines 8a through 8z, compute and edit line 9 by adding lines 8a through 8z.

Schedule 1, Line 11 Dotted Portion - Form 982 Indicator

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 11 - Educator Expenses

  1. Reserved

Schedule 1, Line 12 - Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials (Form 2106)

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 13 - Health Savings Account Deduction (Form 8889)

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 14 - Moving Expenses for Members of the Armed Forces (Form 3903)

  1. If an amount is present on Schedule 1, line 14 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 3903 (or similar statement) must be attached. If missing, correspond for Form 3903.

    Note:

    If the taxpayer is only claiming an expense for storage fees while out of the United States, Form 3903 is not required.

Schedule 1, Line 15 - Deductible Part of Self-Employment Tax

  1. Reserved

Schedule 1, Line 16 - Self-Employed SEP, SIMPLE, and Qualified Plans

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 17 - Self-Employed Health Insurance Deduction

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Lines 19a, 19b, and 19c - Alimony Paid, Recipient's TIN, and Date of Divorce

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 20 - IRA Deduction

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 21 - Student Loan Interest Deduction

  1. Reserved

Schedule 1, Line 22

  1. Reserved

Schedule 1, line 23 - Archer MSA Deduction

  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Lines 24a through 24z - Other Adjustments (Not Transcribed)

  1. Delete the following adjustments from Schedule 1, lines 11 through 23, and ensure the amounts are included in the Schedule 1, line 25 total:

    • "403(b)" - contributions by certain chaplains to section 403(b) plans

    • "501(c)(18)(D)" - contributions to certain pension plans

    • "ED67(e)" - (TY18 and later) Excess Deductions of section 67(e) expenses from Form 1041 Schedule K-1

    • "Housing Deduction" - Form 2555, line 50

    • "Jury Pay" - jury duty pay

    • "PPR" - Personal Property Rental deductible expenses

    • "RFST" - Reforestation amortization and expenses

    • "Sub-Pay TRA" - repayment of Supplemental Unemployment Benefit (SUB) payments received in a prior year under the Trade Act of 1974 (TRA)

      Exception:

      "X" the SUB pay amount where found and subtract the amount from Form 1040, line 1a when there is no indication that the adjustment is for benefits received in a prior year.

    • "UDC" - legal fees for Unlawful Discrimination Claims

    • "USOC" - United States Olympic Committee-deduction for Olympic and Paralympic medals and prize money

    • "WBF" - Whistle Blower Fees

  2. Delete the adjustments in (1) above when found elsewhere on the return, and edit the amounts to be included in the Schedule 1, line 25 total.

  3. If there is an amount on Schedule 1, line 24j, or if Schedule 1, line 24z has an amount identified as "Form 2555" , "IRC 911" , "Housing Deduction" , "IRC 931" , or something similar:

    If And Then
    Taxpayer resides in:
    • Baker Island

    • Howland Island

    • Jarvis Island

    • Johnston Atoll

    • Kingman Reef

    • Midway Atoll

    • Palmyra Atoll

    • Wake Island

      Take the following actions:
    1. "X" Schedule 1, line 25,

    2. "X" Form 2555 or Form 2555-EZ (TY18 and prior),

    3. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 9, and

    4. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    The taxpayer does NOT reside in one of the areas mentioned above Form 2555 is missing Correspond for Form 2555.

  4. Edit the Housing Deduction amount from Form 2555, line 50 to the total of Schedule 1, line 25, if not already done by the taxpayer.

  5. If a taxpayer claims an adjustment to income on Schedule 1, line 24z for anything other than the items listed in (1) above, "X" Schedule 1, line 25.

  6. If there is an amount on Schedule 1, line 24z with no explanation present, "X" Schedule 1, line 25.

Schedule 1, Line 25 - Total Other Adjustments

  1. If line 25 is blank, dash, zero, or illegible and there are any entries on lines 24a through 24z, compute and edit line 25 by adding lines 24a through 24z.

Schedule 1, Line 26 - Total Adjustments to Income

  1. For complete instructions, see IRM 3.11.3.

Schedule 2 (Sequence 02) - Additional Taxes

  1. The following information pertains to Schedule 2 only.

  2. For TY20 and later, Schedule 2 may be filed with Form 1040 or Form 1040-NR. See IRM 3.21.3.84.20.

  3. The following are the T-lines and T-Compute Lines on Schedule 2:

    T-Lines T-Compute Lines
    Lines 1 and 2 Line 7
    Line 4 Line 18
    Lines 7-16  
    Line 18  
    Line 19 (TY21 only)  
    Line 20  

  4. Lines 1 through 3 are for tax and lines 4 through 21 are for other taxes

  5. For additional instructions, see IRM 3.11.3.

Schedule 2, Line 1 - Alternative Minimum Tax (Form 6251)

  1. If an amount is present on Schedule 2, line 1, Form 6251 must be attached. Correspond, if missing.

    Reminder:

    Edit FPC "5" when Form 6251 is attached.

Schedule 2, Line 2 - Excess Advance Premium Tax Credit Repayment (Form 8962)

  1. If an amount is claimed on Schedule 2, line 2, Form 8962 must be attached. Correspond, if missing.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A, if not attached, using paragraph "s" .

    2. When corresponding for Form 8962 on Form 9143, also correspond for Form 1095-A, if not attached, using the following literal:
      "Send a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive one or your Form 1095-A is incorrect, visit www.healthcare.gov or your state Marketplace website."

Schedule 2, Line 3 - Total

  1. Reserved

Schedule 2, Line 4 - Self-Employment Tax (Schedule SE)

  1. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, or U.S. Virgin Islands files Form 1040, reporting self-employment taxes on Schedule 2, line 4, and the only income on the return is from Schedule C, Schedule E (Part II) and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040, and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  2. For additional instructions, see IRM 3.11.3.

Schedule 2, Line 7 - Total Additional Social Security and Medicare Tax (Form 4137 or Form 8919)

  1. For complete instructions, see IRM 3.11.3.

Schedule 2, Line 8 - Additional Tax on IRAs or Other Tax-Favored Accounts (Form 5329)

  1. For complete instructions, see IRM 3.11.3.

Schedule 2, Line 9 - Household Employment Taxes (Schedule H)

  1. If an amount is present on line 9, Schedule H must be attached. Correspond for Schedule H, if missing.

Schedule 2, Line 11 - Additional Medicare Tax (Form 8959)

  1. If an amount is present on line 11, Form 8959 must be attached. Correspond for Form 8959, if missing.

Schedule 2, Line 12 - Net Investment Income Tax (Form 8960)

  1. If an amount is present on line 12, Form 8960 must be attached. Correspond for Form 8960, if missing.

Schedule 2, Line 16 - Recapture of Low-Income Housing Credit (Form 8611)

  1. If Form 8611 is missing and the line 16 amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond for Form 8611.

Schedule 2, Lines 17a through 17z - Other Additional Taxes (Not Transcribed)

  1. For complete instructions, see IRM 3.11.3.

Schedule 2, Line 18 - Total Additional Taxes

  1. If line 18 is blank, dash, zero, or illegible and there are any entries on lines 17a through 17z, compute and edit line 18 by adding lines 17a through 17z.

Schedule 2, Line 20 - Section 965 Net Tax Liability Installment (Form 965-A)

  1. If an amount is present on line 20, and Form 965-A is missing, correspond for Form 965-A only if corresponding for other missing information.

  2. If an amount is present on line 20, edit RPC "F" .

    Note:

    If Form 965-A is attached and there is no entry on line 20, do not edit RPC "F" .

Schedule 2, Line 21 - Total Other Taxes

  1. Reserved

Schedule 3 (Sequence 03) - Additional Credits and Payments

  1. The following information pertains to Schedule 3 only.

  2. For TY20 and later, Schedule 3 may be filed with Form 1040 or Form 1040-NR. See IRM 3.21.3.84.21.

  3. The following lines are T-lines and T-Compute lines on Schedule 3:

    T-Lines T-Compute Lines
    Lines 1 through 4 Line 7
    Lines 5a - 5b Line 14
    Lines 6a - 6d  
    Line 6e (TY21 and TY22 only)  
    Lines 6f and 6g  
    Lines 6h through 6l (first line with amount)  
    Line 6m  
    Line 7  
    Lines 9 through 12  
    Line 12b (TY20 - SFL)  
    Line 13a  
    Line 13b (TY23 and later)  
    Line 13b (TY21 and TY22 - SFL)  
    Line 13h (TY21 and TY22 - SL2)  
    Line 13g (TY21 only)  
    Line 14  

  4. Lines 1 through 8 are for nonrefundable credits and lines 9 through 15 are for other payments and refundable credits.

  5. For additional instructions, see IRM 3.11.3.

Schedule 3, Line 1 - Foreign Tax Credit (Form 1116)

  1. If more than $300 (more than $600, for FS 2) is claimed on Schedule 3, line 1, Form 1116 or similar statement must be attached. If missing, or if no significant amount is present on line 7, 8, 24, or 35, correspond for Form 1116.

  2. Taxpayers earning income in the following countries are not allowed to take a foreign tax credit for foreign taxes paid to these countries. If the taxpayer takes the foreign tax credit (see Form 1116, Part II, line 8) with respect to taxes paid to any of the following countries (see Form 1116, Part I, line i, columns A, B, and C), "X" both Form 1116, line 8 and Schedule 3, line 1.

    Country Starting Date Ending Date
    Iran January 1, 1987 Still in Effect
    North Korea January 1, 1987 Still in Effect
    Sudan February 12, 1994 Still in Effect
    Syria January 1, 1987 Still in Effect

Schedule 3, Line 2 - Credit for Child and Dependent Care Expenses (Form 2441, Line 11)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 3 - Education Credits (Form 8863, Line 19)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 4 - Retirement Savings Contributions Credit (Form 8880)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 5a - Residential Clean Energy Credit (Form 5695, Line 15)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 5b - Energy Efficient Home Improvement Credit (Form 5695, Line 32)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Lines 6a through 6z - Other Nonrefundable Credits

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 6f - Clean Vehicle Credit
  1. For TY23 and later, if there is an amount on line 6f, at least one Form 8936 Schedule A must be attached. If missing, correspond for Form 8936 Schedule A.

    Note:

    For TY23 and later, do not correspond for Form 8936.

Schedule 3, Line 6m - Credit for Previously Owned Clean Vehicles
  1. For TY23 and later, if there is an amount on line 6m, at least one Form 8936 Schedule A must be attached. If missing, correspond for Form 8936 Schedule A.

    Note:

    For TY23 and later, do not correspond for Form 8936.

Schedule 3, Line 7 - Total Other Nonrefundable Credits

  1. If line 7 is blank, dash, zero, or illegible and there are any entries on lines 6a through 6z, compute and edit line 7 by adding lines 6a through 6z.

Schedule 3, Line 9 - Net Premium Tax Credit (Form 8962)

  1. If an amount is claimed on Schedule 3, line 9, Form 8962 must be attached. If missing, correspond.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A, if not attached, using paragraph "s" .

    2. When corresponding for Form 8962 on Form 9143, also correspond for Form 1095-A, if not attached, using the following literal:
      "Send a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive one or your Form 1095-A is incorrect, visit www.healthcare.gov or your state Marketplace website."

Schedule 3, Line 10 - Amount Paid with Request for Extension to File (Form 4868)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 11 - Excess Social Security and Tier 1 RRTA Tax Withheld

  1. Taxpayers in U.S. Territories may claim excess Social Security and RRTA taxes withheld. However, the withholding must be verified via attached Form(s) W-2AS, Form(s) W-2CM, Form(s) W-2GU, Form(s) W-2VI, Form(s) 499R-2/W-2PR, and Form(s) W-2.

  2. For additional instructions, see IRM 3.11.3.

Schedule 3, Line 12 - Credit for Federal Tax on Fuels (Form 4136)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13a - Form 2439

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13b - Credit for Repayment of Earlier Year Income

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13c - Elective Payment Election (EPE) (Not Transcribed)

  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13z - Other Payments or Refundable Credits (Not Transcribed)

  1. If line 13z was used for other refundable credits that do not have a specific line, follow the table below:

    If the credit claimed is Then
    Form 8689 "X" line 14, and see IRM 3.21.3.79.1.2 for additional instructions.
    Form 8805
    1. If Form 8805 is attached, "X" line 14, and edit Form 8805 withholding to the dotted portion of Form 1040, line 33.

    2. If Form 8805 is not attached, correspond.

    Form 1042-S
    1. If Form 1042-S is attached, "X" line 14, and edit Form 1042-S withholding to the dotted portion of Form 1040, line 33.

    2. If Form 1042-S is not attached, correspond.

    Form 8288-A
    1. If Form 8288-A is attached with a Date of Transfer within the tax period of the return, "X" line 14, and edit the verified amount of the Form 8288-A withholding to the dotted portion of Form 1040, line 33.

    2. If Form 8288-A is attached with a Date of Transfer not within the tax period of the return, "X" line 14.

      Exception:

      When a Date of Transfer is in 2024, correspond.

    3. If Form 8288-A is not attached, correspond.

Schedule 3, Line 14 - Total Other Payments or Refundable Credits

  1. If line 14 is blank, dash, zero, or illegible and there are any entries on lines 13a through 13z, compute and edit line 14 by adding lines 13a through 13z.

Conversion of Form 1040A (TY17 and Prior) and Form 1040EZ (TY17 and Prior)

  1. Convert every Form 1040A and Form 1040EZ to Form 1040.

  2. Convert international conditions as follows:

    Attached to or Entry on Form 1040A or Form 1040EZ Action on Form 6114 or appropriate schedules
    • Form 1042-S with "Worldwide Income"

    • Form SSA-1042S attached to Form 1040EZ

    • Form 8288-A (after credit verification)

    • Form 8689

    • Form 8805

    Edit withholding to the dotted portion of Form 6114, line 33.
    Form 4563 or IRC 931 See IRM 3.21.3.76.1.3.
    Housing Deduction Edit housing deduction from Form 2555, line 50 to Schedule 1, line 25.
    IRC 871 Edit capital gain income to Form 6114, line 7, and edit exempt amount to Schedule 1, line 9 as a negative.
    IRC 893 Edit earned income to Form 6114, line 1a, and edit exempt amount to Schedule 1, line 9 as a negative.
    Valid Form 2555 or Form 2555-EZ, or IRC 911 Edit foreign income to Form 6114, line 1a, and edit foreign earned income exclusion to Schedule 1, line 9 as a negative.
    Valid Treaty Exempt Income Edit gross income amount to Form 6114, line 1a, and edit verified amount exempt by treaty to Schedule 1, line 9 as a negative.

  3. For additional instructions, see IRM 3.11.3.

Schedule A (Sequence 07) - Itemized Deductions

  1. The following lines on Schedule A are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 4
    Line 3 Line 7
    Line 4 Line 10
    General Sales Tax Checkbox Line 14
    Lines 5a through 5c Line 17
    Lines 6 and 7  
    Lines 8a through 8c  
    Line 8d (TY21 and prior)  
    Lines 9 through 17  
    Line 18 Checkbox  

  2. A taxpayer may take a deduction on lines 5a, 5b, and/or 5c for taxes imposed by a U.S. possession.

  3. A taxpayer may take a deduction on line 6 for income taxes paid or accrued during the year to:

    • a foreign country

    • any political subdivision, agency, or instrumentality of the country

  4. If the taxpayer is prorating their itemized deductions (Schedule A) under IRC 933, accept the taxpayer’s prorated amount for itemized deductions. When two amounts are present on line 17, "X" the larger amount.

  5. Schedule A (sequence 7A), Schedule NEC (sequence 7B), and Schedule OI (sequence 7C) are attachments for Form 1040-NR.

  6. For additional instructions, see IRM 3.11.3.

Schedule B (Sequence 08) - Interest and Ordinary Dividends

  1. The following lines on Schedule B are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 2: edited to the left of line 2 There are no T-Compute Lines
    Line 3  
    Line 6: edited above the instructions for line 6  
    Foreign Account Indicator  
    FinCEN Form 114 Indicator, Report of Foreign Bank and Financial Accounts (FBAR)  

    Note:

    "X" Schedule B when attached to a Form 1040-NR.

  2. For additional instructions, see IRM 3.11.3.

Schedule C (Sequence 09, 10, 11) - Profit or Loss from Business

  1. The following lines on Schedule C are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    SSN Line 1
    Lines A, B, C, D, F, H, I, and J Line 2
    Statutory Employee Indicator Box Line 3
    Lines 1 through 4 Line 28
    Line 6  
    Line 9  
    Line 13  
    Line 15  
    Line 16a  
    Line 17  
    Line 18  
    Line 21  
    Lines 24a and 24b  
    Line 25  
    Lines 26 through 27b  
    Line 28  
    Line 30  
    Line 32, At-Risk Indicator Boxes (no editing required)  
    Line 35  
    Line 41  

  2. If the taxpayer is a bona fide resident of PR and indicates Schedule C income is excluded under IRC 933, take the following actions:

    1. "X" the Schedule C,

    2. Prepare a dummy Schedule C, and

    3. When dummying Schedule C, edit $1 for Gross Receipts (line 1), and edit the NAICS code if furnished by the taxpayer. Do not compute line 3.

  3. For additional instructions, see IRM 3.11.3.

Schedule D (Sequence 12) - Capital Gains and Losses

  1. The following lines on Schedule D are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Yes/No Checkbox (TY19 and later) Line 7
    Line 1a, columns (d) and (e) Line 15
    Lines 1b-3, columns (d), (e), and (g)  
    Line 5  
    Line 7  
    Line 8a, columns (d) and (e)  
    Lines 8b-10, columns (d), (e), and (g)  
    Line 12  
    Line 13  
    Line 15  
    Line 18  
    Line 19  

  2. For additional instructions, see IRM 3.11.3.

Form 8949 (Sequence 12A) - Sales and Other Dispositions of Capital Assets

  1. The following lines on Form 8949 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Entries with "Z" Code: There are no T-Compute lines
    Part I, columns (a), (b), and (g)  
    Part I indicator, edited to the right of Part I, column h  
    Part II, columns (a), (b), and (g)  
    Part II indicator, edited to the right of Part II, column h  
    Entries with "Y" Code (TY20 and later):  
    Part I, columns (a), (c), and (g)  
    Part I indicator, edited to the right of Part I, column h  
    Part II, columns (a), (c), and (g)  
    Part II indicator, edited to the right of Part II, column h  

  2. For complete instructions, see IRM 3.11.3.

Schedule E (Sequence 13) - Supplemental Income and Loss

  1. The following lines on Schedule E are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Checkboxes A and B Lines 23a through 23e
    Line 14, columns A-C Lines 24 and 25
    Lines 23a through 23e Line 29a, columns (h) and (k)
    Lines 24 and 25 Line 29b, columns (g) and (i)
    Line 27, checkboxes Lines 30 and 31
    Line 29a, columns (h) and (k) Lines 35 and 36
    Line 29b, columns (g) and (i) Line 39
    Lines 30 and 31  
    Line 34a, column (d)  
    Line 34b, column (c)  
    Lines 35 and 36  
    Line 37 - edited to the left of line 37  
    Lines 39 and 40  
    Lines 42 and 43  

  2. For additional instructions, see IRM 3.11.3.

Schedule F (Sequence 14, 15) - Profit or Loss from Farming

  1. The following lines on Schedule F are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines B, D, F, and G Line 9
    Line 1b Line 33
    Line 2 Line 44
    Lines 3a and 3b Line 50
    Lines 4a and 4b  
    Line 5b  
    Lines 6a and 6b  
    Line 7  
    Line 9  
    Line 13  
    Line 19  
    Line 21a  
    Line 25  
    Line 28  
    Line 33  
    Line 36, At-Risk Indicator Boxes (no editing required)  
    Lines 38a and 38b  
    Line 39a  
    Line 40b  
    Line 44  
    Line 50  

  2. If the taxpayer is a bona fide resident of PR and indicates Schedule F income is excluded under IRC 933, take the following actions:

    1. "X" the Schedule F,

    2. Prepare a dummy Schedule F, and

    3. When dummying Schedule F, edit $1 for Gross Income (line 9), and edit the NAICS code, if furnished by the taxpayer.

  3. For additional instructions, see IRM 3.11.3.

Schedule R (Sequence 16) - Credit for the Elderly or the Disabled

  1. The following lines on Schedule R are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 9 Line 13c
    Line 11  
    Line 13c  

  2. For additional instructions, see IRM 3.11.3.

Schedule SE (Sequence 17, 18) - Self-Employment Tax

  1. The Schedule SE Section A ("short form" ) is valid for TY19 and prior only.

  2. The following lines on Schedule SE are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    TIN Line 3
    Lines 1a through 3 Line 8d
    SE Quarters Covered - edited to the right of line 4c  
    Line 5a  
    Line 8d  
    SE Farm Code - edited in the center-bottom margin  

  3. For additional instructions, see IRM 3.11.3.

Form 1116 (Sequence 19) - Foreign Tax Credit

  1. The following lines on Form 1116 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Number of additional Forms 1116 filed - edited to right margin of Part I heading Line 1a
    Line 1a Lines 6 through 8
    Lines 6 through 8 Line 14
    Line 14 Line 17
    Lines 16 and 17 Line 21
    Lines 21 through 24 Line 23
    Lines 34 and 35 Line 35

  2. If the amount on Form 1116, line 1a is the same as the amount reported on Form 2555, line 26 or Form 2555-EZ, line 17 (TY18 and prior), then:

    1. Adjust Form 1116, line 1a by subtracting the greater of Form 2555, line 42 or 45, or Form 2555-EZ, line 18 (TY18 and prior) from Form 1116, line 1a. See Figure 3.21.3-9.

    2. If Form 1116, line 1a is reduced to zero, "X" the amount on Schedule 3, line 1.

    Caution:

    If more than one Form 2555 or Form 2555-EZ (TY18 and prior) (each taxpayer can use either Form 2555 or Form 2555-EZ (TY18 and prior)) is attached, use the combined amounts for Forms 2555, lines 26 and/or Forms 2555-EZ, lines 17 (TY18 and prior) to compare to line 1a.

  3. If the taxpayer's intent is not to use Form 1116 (e.g., Form 1116, line 35 is blank or zero and Schedule 3, line 1 is blank or zero) or if the taxpayer claims a negative or zero on Form 1116, line 35, "X" Form 1116.

  4. Taxpayers earning income in the following countries are not allowed to take a foreign tax credit for foreign taxes paid to these countries. If the taxpayer takes the foreign tax credit (see Form 1116, Part II, Line 8) with respect to taxes paid to any of the following countries (see Form 1116, Part I, letter i, column A, B, or C), "X" both Form 1116, line 8 and Schedule 3, line 1.

    Country Starting Date Ending Date
    Iran January 1, 1987 Still in Effect
    North Korea January 1, 1987 Still in Effect
    Sudan February 12, 1994 Still in Effect
    Syria January 1, 1987 Still in Effect

  5. For additional instructions, refer to IRM 3.11.3.

    Exception:

    Do not refer to IRM 3.11.3 when Form 1116 has been deleted per IRM 3.21.3.29 (3) above.

    Figure 3.21.3-9

    This is an Image: 34010009.gif

    Please click here for the text description of the image.

Schedule J (Sequence 20) - Income Averaging for Farmers and Fishermen

  1. The following lines on Schedule J are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 2a and 2b There are no T-Compute lines
    Line 8  
    Line 12  
    Line 16  
    Lines 19 through 21  

  2. For additional instructions, see IRM 3.11.3.

Form 2441 (Sequence 21) - Child and Dependent Care Expenses

  1. The following lines on Form 2441 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Checkbox A Line 3
    Checkbox B (TY22 and later) Line 26
    Checkbox B (For TY21, edit "ABD" )  
    Line 1, columns (a) and (c)  
    Line 1, column (d) (TY22 and later)  
    Line 2, Checkbox (not edited)  
    Line 2, columns (a), (b), (c), and (d) - (for the first 2 qualifying persons)  
    Lines 3 through 5  
    Line 9b  
    Line 12  
    Line 16  
    Line 25  
    Line 26  

  2. For additional instructions, see IRM 3.11.3.

Form 3800 (Sequence 22) - General Business Credit

  1. The following lines on Form 3800 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Part I, Lines 1 through 5 Part II, Line 25
    Part II, Lines 24 through 26 Part II, Line 36
    Part II, Line 36  
    Part III, Checkbox I (TY21 and TY22 only)  
    Part III, Line 1a, column j  
    Part III, Line 1b, columns b and g - j  
    Part III, Line 1c, column j  
    Part III, Line 1d, columns b, g, and j  
    Part III, Line 1e, column j  
    Part III, Line 1f, columns b, g, and j  
    Part III, Line 1g, columns b and g - j  
    Part III, Line 1h, column j  
    Part III, Line 1i, column j  
    Part III, Line 1j, column j  
    Part III, Line 1k, column j  
    Part III, Line 1l, column j  
    Part III, Line 1m, column j  
    Part III, Line 1n, column j  
    Part III, Line 1o, columns b and h - j  
    Part III, Line 1p, column j  
    Part III, Line 1r, column j  
    Part III, Line 1s, columns b, g, and j  
    Part III, Line 1t, column j  
    Part III, Line 1u, columns b, g, and j  
    Part III, Line 1w, column j  
    Part III, Line 1x, columns b and g - j  
    Part III, Line 1y, column j  
    Part III, Line 1aa, column j  
    Part III, Line 1bb, column j  
    Part III, Line 1cc, column j  
    Part III, Line 1dd, column j  
    Part III, Line 1ee, column j  
    Part III, Line 1ff, column j  
    Part III, Line 1zz, column j  
    Part V, column b Data Present Indicator - edited on Page 3 in the bottom-center margin  
    Amount from Form 3468, Part VII, Line 1i - edited on Page 3 in the bottom-right margin  
    Part III, Line 3, column j  
    Part III, Line 4a, columns b, g, and j  
    Part III, Line 4e, columns b, g, and j  
    Part III, Line 4h, column j  
    Part III, Line 4j, column j  
    Part III, Line 4k, column j  
    Part III, Line 5, column j  

  2. For current year and prior year instructions, see IRM 3.11.3.

Form 4137 (Sequence 24, 25) - Social Security and Medicare Tax on Unreported Tip Income

  1. The following lines on Form 4137 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Taxpayer TIN Line 2
    Lines 1A through 1E, columns (a) through (d)  
    Lines 2 and 3  
    Lines 5 and 6  
    Line 8  

  2. For additional instructions, see IRM 3.11.3.

Form 4684 (Sequence 26) - Casualties and Thefts

  1. The following lines on Form 4684 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    FEMA Disaster Declaration Number Line 13
    Line 1, Property A ZIP Code Line 14
    Line 13 Line 16
    Line 14  
    Line 16  

  2. For additional instructions, see IRM 3.11.3.

Form 4797 (Sequence 27) - Sale of Business Property

  1. The following lines on Form 4797 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1a through 1c Line 9
    Lines 7 through 9  
    Gain on sale of animals - edited to Page 1, bottom-center margin  

  2. For additional instructions, see IRM 3.11.3.

Form 4972 (Sequence 28) - Tax on Lump-Sum Distributions

  1. The following lines on Form 4972 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 5b Line 12
    Line 6  
    Lines 11 and 12  
    Line 18  
    Line 30  

  2. For additional instructions, see IRM 3.11.3.

Form 5329 (Sequence 29, 30) - Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

  1. The following lines on Form 5329 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spousal Indicator - edited to the left of the form title Line 4
    Loose form indicator - edited to the right of the entity area Line 8
    Line 4 Line 55
    Line 8  
    Line 17  
    Line 25  
    Line 33  
    Line 41  
    Line 49  
    Line 51  
    Line 55  
    IRA Condition Code - edited to Page 2, bottom-right margin  

  2. For additional instructions, see IRM 3.11.3.

Form 6198 (Sequence 31) - At-Risk Limitations

  1. The following lines on Form 6198 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 5 Line 5
    Lines 20 and 21  

  2. For additional instructions, see IRM 3.11.3.

Form 6251 (Sequence 32) - Alternative Minimum Tax - Individuals

  1. The following lines on Form 6251 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 2c through 3 There are no T-Compute lines
    Line 8  

  2. For additional instructions, see IRM 3.11.3.

Form 8615 (Sequence 33) - Tax for Certain Children Who Have Unearned Income

  1. The following lines on Form 8615 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines A and B There are no T-Compute lines.
    Lines 1 and 2  
    Line 18  

  2. For additional instructions, see IRM 3.11.3.

Form 2555 and Form 2555-EZ (TY18 and prior) (Sequence 34, 35) - Foreign Earned Income Exclusion

  1. The following lines on Form 2555 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Post of Duty (POD) Code - top-center margin Line 22g (total allowances)
    Line 10 (Bona Fide Residence beginning date) Line 33 (housing expenses)
    Line 10 (Bona Fide Residence ending date) Line 42 (Foreign Earned Income Exclusion)
    Line 13a (declaration question - right margin) Line 50 (Housing Deduction)
    Line 14 (number of days in U.S. on business - right margin, just above 15a)  
    Line 16 (Physical Presence qualifying period beginning date)  
    Line 16 (Physical Presence qualifying period ending date)  
    Line 18 (number of days in U.S. on business - right margin)  
    Line 19 (foreign wages)  
    Line 22g (total allowances)  
    Line 25 (excludable Meals and Lodging)  
    Line 33 (housing expenses)  
    Line 36 (Housing Exclusion)  
    Line 42 (Foreign Earned Income Exclusion)  
    Line 45 (Housing Exclusion, Foreign Earned Income Exclusion, or both)  
    Line 50 (Housing Deduction)  

  2. The following lines on Form 2555-EZ are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Post of Duty (POD) Code - top-center margin Line 18
    Line 1b (Bona Fide Residence beginning and ending dates)  
    Line 2b (Physical Presence qualifying period beginning and ending dates)  
    Line 12 (number of days in U.S. on business - right margin, just above Part IV)  
    Line 17 (foreign wages)  
    Line 18 (Foreign Earned Income Exclusion)  

General Information for Form 2555 and Form 2555-EZ

  1. U.S. citizens or resident aliens living abroad are taxed on their worldwide income but may qualify to exclude from gross income up to $120,000 of their foreign earnings for tax year 2023 (per IRC 911(b)(2)(D)). In addition, they may be able to exclude or deduct certain foreign housing amounts.

  2. To claim the foreign earned income exclusion and, the foreign housing exclusion or the foreign housing deduction, the taxpayer must satisfy all three of the following requirements:

    • The taxpayer’s tax home must be in a foreign country or countries,

    • The taxpayer must have foreign earned income, and

    • The taxpayer must be one of the following:

    A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes any tax year in its entirety and includes part of the tax year of the return.

    Note:

    An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis.

    A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect that has a nondiscrimination clause and who is a bona fide resident for an uninterrupted period that includes an entire tax year and includes part of the tax year of the return.
    A U.S. citizen or resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, which also includes part of the tax year of the return.

  3. If the tax home on Form 2555 or Form 2555-EZ (TY18 and prior) is in a foreign country, the taxpayer is entitled to elect the IRC 911 foreign earned income exclusion even if the address on the Form 1040 is an address in the U.S. or in a U.S. territory.

  4. Taxpayers claiming a foreign earned income exclusion are not entitled to claim a credit for foreign taxes paid on the income that is being excluded. Editing is required if the amount on Form 1116, line 1a is the same as the total foreign earned income claimed by the taxpayer on Form 2555 or Form 2555-EZ. See IRM 3.21.3.29 for processing instructions.

General Editing Instructions for Form 2555 and Form 2555-EZ

  1. Use the following table for general editing instructions for Form 2555 and Form 2555-EZ:

    Reminder:

    Form 2555-EZ is valid for TY18 and prior only.

    If And Then
    Taxpayer claims unearned income, including any of the following:
    • Alimony

    • Annuities

    • Capital gains

    • Dividends

    • Gambling winnings

    • Interest

    • Pensions

    • Retirement

    • Social Security benefits

    • Unemployment benefits

    Earned income is also claimed
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, adjust Schedule 1, line 9 to only exclude the earned income,

    2. "X" the amount(s) on Form 2555, lines 42 and/or 45 or Form 2555-EZ, line 18, and

    3. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9.

    Taxpayer claims unearned income, including any of the following:
    • Alimony

    • Annuities

    • Capital gains

    • Dividends

    • Gambling winnings

    • Interest

    • Pensions

    • Retirement

    • Social Security benefits

    • Unemployment benefits

    No earned income is included
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, "X" Schedule 1, line 9,

    2. If the housing deduction is claimed in the total reported on Schedule 1, line 25, "X" Schedule 1, line 25,

    3. "X" Form 2555 or Form 2555-EZ,

    4. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9, and

    5. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Taxpayer claims self-employment income from Schedule C or Schedule F
    • Reports a net amount on Schedule 1, line 3 or Schedule 1, line 6, and

    • Claims a foreign earned income exclusion for the gross amount by including it in the total reported on Schedule 1, line 9

    Adjust Schedule 1, line 9 to only exclude the net amount.
    Taxpayer:
    1. U.S. Military or

    2. Lives and works in a U.S. territory or

    3. Resides in:

      • Baker Island

      • Howland Island

      • Jarvis Island

      • Johnston Atoll

      • Kingman Reef

      • Midway Atoll

      • Palmyra Atoll

      • Wake Island

     
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, "X" Schedule 1, line 9,

    2. If the housing deduction is claimed in the total reported on Schedule 1, line 25, "X" Schedule 1, line 25,

    3. "X" Form 2555 or Form 2555-EZ,

    4. Ensure income is reported on Form 1040, lines 1a through 7 or Schedule 1, lines 1 through 7 or 9, and

    5. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Exception:

    If a return shows income earned in the Federated States of Micronesia, Marshall Islands, or Palau Islands and Form 2555 or Form 2555-EZ is attached and valid, ALLOW the exclusion.

    Taxpayer makes no attempt to exclude income on Form 1040 or Schedule 1 Form 2555 or Form 2555-EZ does not include a claim for excluded income "X" Form 2555 or Form 2555-EZ.
    Multiple Forms 2555 and/or Form 2555-EZ are attached for one taxpayer  
    1. Combine related T-lines onto one Form 2555,

    2. "X" the other Form(s) 2555 and Form(s) 2555-EZ,

    3. Use the appropriate POD code for the Form 2555 or Form 2555-EZ with the most income on Form 2555, line 26, or Form 2555-EZ, line 17,

    4. Edit dates to include the longest qualifying period reported on all forms, and

    5. When combining Form(s) 2555 with Form(s) 2555-EZ, always combine onto Form 2555. Combine Form 2555-EZ, line 17 with Form 2555, line 19 and Form 2555-EZ, line 18 with Form 2555, lines 42 and 45.

    Note:

    Convert to Form 2555 when only Form(s) 2555-EZ are present and their combined foreign earned income is over the maximum for the year. For TY23, the maximum is $120,000.

    Taxpayer enters beginning and ending dates that do not include part of the tax year of the return   Correspond:
    • If using Form 9143, check box 14.

    • If using Form 13900, use the following literal: To exclude foreign earned income, the qualifying dates on Form 2555 or Form 2555-EZ must cover a part of the tax year of your tax return. Please verify your beginning and/or ending dates, and re-submit your Form 2555.

  2. If Form 2555 or Form 2555-EZ is valid:

    • Ensure that the taxpayer reported all foreign earned income (from Form 2555, line 26, or Form 2555-EZ, line 17) either on the Form 1040 within lines 1a through 1h or on the Schedule 1 in line 3, 5, 6, or 8z. If the taxpayer did not report the earned income, edit the income to a line as follows: edit Form W-2, box 1 income to Form 1040, line 1a; edit income that belongs on Form 1040, lines 1b through 1h to Form 1040, line 1z; edit Schedule C income to Schedule 1, line 3; edit Schedule E income to Schedule 1, line 5; edit Schedule F income to Schedule 1, line 6; edit income to Form 1040, line 1a if source of income cannot be determined; and

    • Ensure the exclusion (taken from the greater of Form 2555, line 42 or 45, or Form 2555-EZ, line 18) is included in the total reported on Schedule 1, line 9. If not, adjust Schedule 1, line 9 to reflect its inclusion as a negative amount.

  3. If Form 2555 or Form 2555-EZ is invalid:

    • Ensure that the taxpayer reported all foreign earned income (from Form 2555, line 26, or Form 2555-EZ, line 17) either on the Form 1040 within lines 1a through 1h or on the Schedule 1 in line 3, 5, 6, or 8z. If the taxpayer did not report the earned income, edit the income to a line as follows: edit Form W-2, box 1 income to Form 1040, line 1a; edit income that belongs on Form 1040, lines 1b through 1h to Form 1040, line 1z; edit Schedule C income to Schedule 1, line 3; edit Schedule E income to Schedule 1, line 5; edit Schedule F income to Schedule 1, line 6; edit income to Form 1040, line 1a if source of income cannot be determined;

    • "X" Schedule 1, line 9,

    • "X" Form 2555 or Form 2555-EZ, and

    • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

Form 2555 for Joint Filers

  1. Only two forms can be processed:

    • One for the primary taxpayer (sequence code 34)

    • One for the secondary taxpayer (sequence code 35)

    Note:

    Taxpayers might file Form 2555-EZ for prior years or the current year. Conversion of Form 2555-EZ to Form 2555 is not required at this point, unless one of the criteria at IRM 3.21.3.86.12.1 (2) is met.

  2. If a Form 2555 or Form 2555-EZ is for the secondary taxpayer, edit Sequence Code "35" .

  3. If two forms are submitted and only one is valid:

    1. Adjust Schedule 1, line 9 by deleting the amount for the invalid Form 2555 or Form 2555-EZ, if applicable,

    2. Adjust Schedule 1, line 25 by deleting the amount for the invalid Form 2555 or Form 2555-EZ, if applicable,

    3. "X" the invalid Form 2555 or Form 2555-EZ, and

    4. Make sure income is reported on the appropriate line.

  4. If two forms are submitted and neither one is valid:

    1. "X" Schedule 1, line 9, if foreign earned income exclusion is claimed,

    2. "X" Schedule 1, line 25, if foreign earned housing deduction is claimed,

    3. "X" both Forms 2555 or Forms 2555-EZ,

    4. Make sure income is reported on the appropriate line, and

    5. If the deleted Forms 2555 or Forms 2555-EZ are the only foreign aspects of the return, rebatch the coded return as domestic.

  5. If only one Form 2555 or Form 2555-EZ is submitted for both taxpayers, correspond for separate Forms 2555 or Forms 2555-EZ. See Figure 3.21.3-10.

    Caution:

    If the spouses are a missionary team, see IRM 3.21.3.41.3 (6) below.

  6. If the spouses are a missionary team and only one Form 2555 or Form 2555-EZ is submitted, DO NOT correspond. Divide the income equally between the two filers on separate Forms 2555.

    Exception:

    If it can be determined that the income was earned by only one spouse, DO NOT divide the income. Process the Form 2555 or Form 2555-EZ as filed.

    Figure 3.21.3-10

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    Please click here for the text description of the image.

Post of Duty (POD) Code

  1. A POD Code must be edited to all Forms 2555 or Form 2555-EZ (TY18 and prior).

  2. Edit the appropriate 2 alpha character POD Code in the top-center margin of Page 1, Form 2555 or Form 2555-EZ according to Exhibit 3.21.3-7. See Figure 3.21.3-11.

    Figure 3.21.3-11

    This is an Image: 34010011.gif

    Please click here for the text description of the image.

  3. Examine Form 2555 or Form 2555-EZ to determine where the foreign income was earned. Use the following priority order when determining the POD assignment:

    1. Address: Form 2555, line 1; Form 2555-EZ, line 4

    2. Tax Home: Form 2555, line 9; Form 2555-EZ, line 11a

    3. Principal Country: Form 2555, line 17

    4. Foreign address on Form 1040

    5. Employer’s foreign address: Form 2555, line 4b: Form 2555-EZ, line 8

    6. Income statement

    Note:

    If multiple countries are present, edit the first with a listed POD.

    Reminder:

    If combining Forms 2555 or Form 2555-EZ (TY18 and prior), edit the POD for the Form 2555 or Form 2555-EZ with the most income on Form 2555, line 26 or Form 2555-EZ, line 17.

  4. If the country in which the foreign income is earned is not listed in the POD Table, edit POD Code "XX" .

  5. If you cannot determine the POD after using instructions in IRM 3.21.3.41.4 (3) above, edit POD Code "XX" .

Determining Bona Fide Residence and Physical Presence Dates

  1. A U.S. citizen is considered a bona fide resident of a foreign country if his tax home has been in that foreign country for an uninterrupted period of time which includes a full calendar year and part of the tax year of the return. Before editing bona fide dates for restricted countries (Cuba, Iraq, and Libya), see IRM 3.21.3.41.5 (4).

    Note:

    Waiver of minimum time requirements - the minimum time requirements for bona fide residence and physical presence can be waived if the taxpayer must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. The following are the only countries for which a waiver may be claimed for 2023:

    Country Date of Departure On or After
       
       
       
       
       
       

    Note:

    Edit dates to cover a full calendar year using the dates provided by the taxpayer, if available. Otherwise, use the tax year of the return to determine the applicable dates.

  2. To qualify for bona fide residence, the taxpayer must reside in a foreign country or countries for an uninterrupted period that includes an entire tax year and includes part of the tax year of the return.

    Note:

    An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar -year basis.

    Example:

    For TY23, the taxpayer enters bona fide dates of 11/01/2022 to 01/15/2024. The taxpayer completed an uninterrupted period of residence for a full tax year (2023) and therefore meets the bona fide residence test for tax years 2022, 2023, and 2024.

    Example:

    For TY23, the taxpayer enters bona fide dates of 10/01/2022 to 11/30/2023. The taxpayer did not complete an uninterrupted period of residence for a full tax year (2022 or 2023) and therefore does not meet the bona fide residence test in either year, but qualifies for physical presence for both years.

  3. To qualify for physical presence, the taxpayer must be physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months, which also includes part of the tax year of the return.

    Example:

    For TY23, the taxpayer enters physical presence dates of 01/05/2022 to 01/04/2023. The taxpayer meets the physical presence test for both tax years since the dates cover at least 330 days.

    Example:

    For TY23, the taxpayer enters physical presence dates of 01/01/2023 to 11/15/2023. The taxpayer does not meet the physical presence test for 2023 since the dates cover less than 330 days.

  4. A taxpayer living and working in a restricted country cannot claim the benefits under "IRC 911" :

    Caution:

    If the taxpayer meets either bona fide residence or physical presence, but the beginning date was within the restricted period, edit qualifying dates based on the end of the restriction.

    Restricted Country Beginning Date Ending Date
    Cuba

    Exception:

    If a non-military taxpayer files a Form 1040 with a Form 2555 exclusion from United States Naval base at Guantanamo Bay, allow the exclusion.

    January 1, 1987 Still in effect
    Iraq August 2, 1990 July 29, 2004
    Libya January 1, 1987 September 20, 2004

  5. Edit Beginning and Ending Dates in YYMM format for bona fide residence dates:

    • Form 2555 - Part II, line 10 area

    • Form 2555-EZ (TY18 and prior) - Part I, below line 1b

    Exception:

    If the beginning date is 1950 or earlier, then perfect the date in a YYYYMM format (e.g., September 1947 will be edited as "194709" ).

  6. Edit Beginning and Ending Dates in YYMM format for physical presence dates:

    • Form 2555 - Part III, line 16 area

    • Form 2555-EZ (TY18 and prior) - Part I, below line 2b

    Exception:

    If the beginning date is 1950 or earlier, then perfect the date in a YYYYMM format (e.g., September 1947 will be edited as "194709" ).

  7. On a TY23 return, if the dates are missing or don't meet either the bona fide residence or physical presence test, and one of the following notations or similar is present:

    • Adverse conditions or

    • Could not meet 330-day requirement for physical presence due to an emergency (e.g., medical condition or travel restrictions),

    Then allow the foreign earned income exclusion, and edit the physical presence dates provided. If dates are missing, edit dates for the calendar year (beginning date of "2301" and ending date of "2312" ).

  8. If both beginning and ending dates are present or can be determined, follow the table below. (If dates cannot be determined, see IRM 3.21.3.41.5 (9).)

    If And Then
    Only Bona Fide Residence dates are present
    • The dates cover any full calendar year, and

    • The dates include part of the current tax year

    Edit the dates in YYMM format in the Bona Fide Residence section.

    Example:

    If the taxpayer indicates the beginning date as January, 2023 and the ending date as December, 2023, edit "2301" as the beginning date and "2312" as the ending date.


    See Figure 3.21.3-12.
    Only Bona Fide Residence dates are present
    • The dates do not cover any full calendar year, but

    • The dates cover at least 330 days

    Edit the dates in YYMM format in the Physical Presence section. See Figure 3.21.3-13.
    Only Bona Fide Residence dates are present The dates are less than 330 days (unless IRM 3.21.3.41.5 (7) applies)
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, "X" Schedule 1, line 9,

    2. If the housing deduction is claimed in the total reported on Schedule 1, line 25, "X" Schedule 1, line 25,

    3. "X" Form 2555 or Form 2555-EZ, and

    4. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Only Physical Presence dates are present The dates cover at least 330 days Edit the dates in YYMM format in the Physical Presence section.
    Only Physical Presence dates are present The dates do not cover at least 330 days (unless IRM 3.21.3.41.5 (7) applies)
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, "X" Schedule 1, line 9,

    2. If the housing deduction is claimed in the total reported on Schedule 1, line 25, "X" Schedule 1, line 25,

    3. "X" Form 2555 or Form 2555-EZ, and

    4. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Both Bona Fide Residence and Physical Presence dates are present
    • The dates are different, and

    • Both dates meet the criteria for their tests

    Edit the dates for the longest period in the appropriate section. See Figure 3.21.3-14.
    Both Bona Fide Residence and Physical Presence dates are present
    • The dates are the same, and

    • Both dates meet the criteria for their tests

    Edit Bona Fide Residence dates. See Figure 3.21.3-15.
    Both Bona Fide Residence and Physical Presence dates are present Only one set of dates meets the criteria for its test Edit the dates which meet the criteria for its test.
    Both Bona Fide Residence and Physical Presence dates are present Neither sets of dates meets the Bona Fide Residence or Physical Presence tests (unless IRM 3.21.3.41.5 (7) applies)
    1. If the foreign earned income exclusion is claimed in the total reported on Schedule 1, line 9, "X" Schedule 1, line 9,

    2. If the housing deduction is claimed in the total reported on Schedule 1, line 25, "X" Schedule 1, line 25,

    3. "X" Form 2555 or Form 2555-EZ, and

    4. If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return as domestic.

    Taxpayer enters beginning and ending dates that do not include part of the tax year of the return   Correspond:
    • If using Form 9143, check box 14.

    • If using Form 13900, use the following literal: "To exclude foreign earned income, the qualifying dates on Form 2555 or Form 2555-EZ must cover a part of the tax year of your tax return. Please verify your beginning and/or ending dates, and re-submit your Form 2555."

    Caution:

    If the taxpayer enters an ending date beyond the received date of the return, edit the received date as the ending date (e.g., if the taxpayer’s ending date is June 1, 2024 and the return received date is April 25, 2024, then edit the ending date as "2404" ).

    Figure 3.21.3-12

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    Figure 3.21.3-13

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    Figure 3.21.3-14

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    Figure 3.21.3-15

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  9. If beginning and/or ending dates are not present:

    If And Then
    The taxpayer indicates the tax home in the country is for a full calendar year by including notations such as:
    • "since birth"

    • "all my life"

    • "still here"

    • "continues"

    • "N/A"

    • "-"

    Reminder:

    These notations are not all-inclusive.

     
    1. If the beginning date is unknown, edit January of the tax year as the beginning date (e.g., for a TY23 return, edit "2301" ). See Figure 3.21.3-16.

    2. If the ending date is unknown on a current year return:

      • Edit the current date as the ending date if before "042324."

      • After 042224, edit the received date as the ending date (e.g., if the received date is June 2024, edit "2406" ).

      • Edit CCC "N" on a late-filed return when the ending date is after the tax period of the return.

      See Figure 3.21.3-17.

    3. If the ending date is unknown on a prior year return, edit the received date as the ending date.

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"

    Any of the following conditions are present:
    • No beginning date (ending date is present)

    • No ending date (beginning date is present)

    • No dates

    • Only months are present (e.g., Jan.-Dec.)

    The number of days on Form 2555, line 31 or 38 (Form 2555-EZ, line 14) is 365 or 366 Edit qualifying Bona Fide Residence dates to cover a full calendar year. See Figure 3.21.3-18.

    Note:

    If the beginning date is unknown, edit January, and if the ending date is unknown, edit December.

    Any of the following conditions are present:
    • No beginning date (ending date is present)

    • No ending date (beginning date is present)

    • No dates

    • Only months are present (e.g., Jan.-Dec.)

    The number of days on Form 2555, line 31 or 38 (Form 2555-EZ, line 14) is 330-364 Edit qualifying Physical Presence dates to cover a full calendar year. See Figure 3.21.3-19.

    Note:

    If the beginning date is unknown, edit January (YY01), and if the ending date is unknown, edit December (YY12).

    Any of the following conditions are present:
    • No beginning date (ending date is present)

    • No ending date (beginning date is present)

    • No dates

    • Only months are present (e.g., Jan.-Dec.)

    The number of days on Form 2555, line 31 or 38 (Form 2555-EZ, line 14) is less than 330 or blank (unless IRM 3.21.3.41.5 (7) applies) Correspond.

    Note:

    Do not "X" the exclusion (Form 2555 or Form 2555-EZ (TY18 and prior)) based on the number of days being less than 330 days before corresponding with the taxpayer.

    Only a year is provided for either the Bona Fide Residence or the Physical Presence dates   In whichever area the taxpayer entered the year:
    1. Edit the beginning date as YY01, and

    2. Edit the ending date as YY12.

    Figure 3.21.3-16

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    Figure 3.21.3-17

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    Figure 3.21.3-18

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    Figure 3.21.3-19

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Form 2555 - Page 1, Parts I and II

  1. If page 1 is missing, correspond.

    Exception:

    If page 2 is complete, including physical presence dates, and page 1 is missing, dummy page 1 of Form 2555. If Part III is complete, do not correspond for Part II.

  2. POD Code (top-center of Form 2555): See IRM 3.21.3.41.4 and Exhibit 3.21.3-7. If the country cannot be determined, edit POD "XX."

  3. Bona Fide residence dates, Line 10: See IRM 3.21.3.41.5.

  4. Declaration Questions: Edit a “4” in the margin to the right of line 13a if any of the following conditions are found. See Figure 3.21.3-20.

    1. Line 13(a): YES box checked

    2. Line 13(b): NO box checked

    3. Line 15(c): YES box checked

    4. Line 15(d): YES box checked

    Caution:

    Do not edit "4" for declaration questions if dates are being moved from bona fide residence to physical presence or if the only dates present are physical presence dates.

  5. Line 14 columns (c): Days in the United States on business:

    1. "Number of days in U.S. on business" (third and seventh columns under line 14): Add the number of days listed. See Figure 3.21.3-20.

      Exception:

      Do not include days in the U.S. with notations of "illness," "personal," or "vacation."

    2. Edit the sum in the margin to the right of line 14 and just above line 15a. See Figure 3.21.3-20.

    Note:

    If dates are being moved from bona fide residence to physical presence, also move number of days in the U.S. on business, if present. If only physical presence dates are present, move the number of days entered by the taxpayer from page 1 to page 2.

    Figure 3.21.3-20

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Form 2555 - Page 2, Part III

  1. Physical Presence Dates, Line 16: See IRM 3.21.3.41.5.

  2. Line 18 column (e) - Days in the United States on Business:

    1. "Number of days in U.S. on business" (fifth column under line 18): Add the number of days listed.

      Exception:

      Do not include days in the U.S. with notations of "illness," "personal," or "vacation."

    2. Edit the sum in the margin to the right of line 18 and just above the Part IV.

    3. If line 18 column (e) is blank and only Physical Presence dates are present, edit number of days in U.S. on business from line 14c.

Form 2555 - Page 2, Part IV

  1. Page 2 of Form 2555 must be completed by the taxpayer. If page 2 is missing or there are no significant T-line entries present or edited, correspond.

    Note:

    All amounts are to be reported in U.S. currency ONLY. Convert any amounts reported in foreign currency to U.S. dollars using the exchange rate table appropriate for the tax period of the filer’s tax return.

  2. Line 19, Total Wages:

    1. If blank, dash, or zero and an amount is present on line 26, edit the line 26 entry to line 19.

    2. If lines 19 and 26 are blank, dash, or zero and an entry appears on line 20a, edit the amount to line 19.

  3. Line 22g, Total Allowances: Compute and edit when blank, dash, or zero and there are entries present on lines 22a through 22f.

  4. Line 26: Taxpayers claiming a foreign earned income exclusion are not entitled to claim the same amount on Form 1116, line 1a. See IRM 3.21.3.29.

Form 2555 - Page 3, Parts V, VI, VII, VIII, and IX

  1. If the taxpayer is claiming an exclusion from Form 2555, then page 3 must be completed. Either line 42 or line 45 must be present or edited. If both are missing, correspond for Form 2555, Page 3.

    Note:

    If the taxpayer enters zero on line 42 and/or 45, do not correspond; continue processing.

  2. Line 33, Housing Expense: Compute and edit when blank, dash, or zero by subtracting line 32 from line 30.

  3. Line 36, Housing Exclusion:

    1. Qualified individuals may separately elect to claim the housing exclusion or the housing deduction, in addition to the foreign earned income exclusion. The housing exclusion applies only to amounts considered paid for with employer-provided amounts. The housing deduction applies only to amounts paid for with self-employment earnings.

  4. Line 42, Foreign Earned Income Exclusion:

    1. If blank, and line 40 and/or line 41 have entries, then edit the smaller amount to line 42.

    2. If there is no amount present on line 45, ensure the line 42 amount (or combined line 42 amounts, if the primary and secondary taxpayers each submitted a Form 2555) is included as a negative in the total on Schedule 1, line 9.

  5. If the taxpayer is claiming an exclusion, line 42 cannot be edited, and line 45 is blank, then correspond for Form 2555, Page 3.

  6. Line 45, Housing Exclusion and/or Foreign Earned Income Exclusion:

    1. The taxpayer may include an amount for a prior year exclusion by making a notation on the dotted portion of line 45. If this notated amount is included in the total on line 45, accept the taxpayer’s figure. If this amount is the only Form 2555 exclusion claimed, accept the taxpayer’s figures. DO NOT correspond for dates. DO NOT edit POD or dates.

    2. If there is an amount present on line 45 (or on two lines 45, if the primary and secondary taxpayers each submitted a Form 2555), ensure this amount is included as a negative in the total on Schedule 1, line 9. See Figure 3.21.3-21.

  7. Line 50, Housing Deduction:

    1. If blank, dash, zero, or illegible, compute the housing deduction amount by adding lines 48 and 49.

    2. If not already included by the taxpayer, edit the housing deduction amount to be included in the total on Schedule 1, line 25.

    3. If the housing deduction amount is entered on any other line, "X" the entry, and edit it to be included in the total on Schedule 1, line 25.

    Figure 3.21.3-21

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Form 4835 (Sequence 37) - Farm Rental Income and Expenses

  1. The following lines on Form 4835 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 There are no T-Compute Lines
    Line 2a  
    Line 3a  
    Lines 4a and 4b  
    Line 5a  
    Line 6  

  2. For additional instructions, see IRM 3.11.3.

Form 8839 (Sequence 38) - Qualified Adoption Expenses

  1. The following lines on Form 8839 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, columns (a) through (g) Line 21
    Supporting Documentation Indicator - edited below line 1, column (g) Line 29
    Line 3 - edited for Child 1, Child 2, and Child 3  
    Line 5 - edited for Child 1, Child 2, and Child 3  
    Line 11 - edited for Child 1, Child 2, and Child 3  
    Line 13  
    Line 21  
    Line 27 - Edited for Child 1, Child 2, and Child 3  
    Line 28  
    Line 29  
    Documentation Indicator - edited below Line 1, column (g)  

  2. For additional instructions, see IRM 3.11.3.

Form 8853 (Sequence 39) - Archer MSAs and Long-Term Care Insurance Contracts

  1. The following lines on Form 8853 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    TIN There are no T-Compute Lines
    Lines 1-4  

  2. For additional instructions, see IRM 3.11.3.

Form 8814 (Sequence 40, 41, 42) - Parents’ Election to Report Child's Interest and Dividends

  1. The following lines on Form 8814 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Child's Name Control Line 15
    Child's TIN  
    Lines 1a and 1b  
    Line 2a  
    Line 3  
    Line 15  

  2. For additional instructions, see IRM 3.11.3.

Schedule EIC (Sequence 43) - Earned Income Credit

  1. The following lines on Schedule EIC are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Checkbox - Qualifying Filing Separate Indicator There are no T-Compute Lines
    Line 1 - Child's Name Control (Child 1, 2, and 3)  
    Line 2 - Child's SSN (Child 1, 2, and 3)  
    Line 3 - Year of Birth (Child 1, 2, and 3)  
    Line 4a - Under Age 24 checkbox (Child 1, 2, and 3)  
    Line 4b - Disabled checkbox (Child 1, 2, and 3)  
    Line 5 - Relationship Code (Child 1, 2, and 3)  
    Line 6 - Number of Months (Child 1, 2, and 3)  

  2. If the taxpayer's address is outside the U.S., see IRM 3.21.3.15.1.30.

  3. For additional instructions, see IRM 3.11.3.

Schedule H/Schedule H (sp)/Schedule H-PR (Sequence 44, 45) - Household Employment Taxes

  1. The following lines on Schedule H are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Employer's Name Control Line 8d
    Employer's TIN Line 18, column (h)
    Employer's EIN Line 19
    Line 1a Line 24
    Line 1b (TY20 and later)  
    Line 3  
    Lines 5 through 7  
    Line 8b (TY20 and later)  
    Line 8c (TY21 and later)  
    Line 8d  
    Line 8e (TY20 and later)  
    Line 8f (TY21 and later)  
    FUTA Indicator Code - edited under Yes/No boxes, Page 2, Part II  
    Lines 13 through 16  
    Line 17, column (a)  
    Line 18, column (h)  
    Lines 19 and 20  
    Lines 23 and 24  
    Additional States Indicator - edited in bottom-left margin  

  2. If a TY23 or later loose Schedule H (sp) or a TY22 or prior loose Schedule H-PR contains no money amount entries, give the Schedule H (sp) or Schedule H-PR to your work leader. The work leader will dispose of the loose Schedule H (sp) or Schedule H-PR in accordance with classified waste procedures.

  3. When money amounts are reported on a loose Schedule H (sp) or Schedule H-PR, prepare a "dummy" Form 1040-SS (sp). Follow these procedures when preparing a "dummy" Form 1040-SS (sp):

    1. Complete the caption information using the information from the Schedule H (sp) or Schedule H-PR name line and Part IV address area.

    2. Edit FSC "1" or "2" based on the Schedule H (sp) or Schedule H-PR name line.

    3. Edit Form 1040-SS (sp), lines 4, 6, and 16 from Schedule H (sp) or Schedule H-PR, Part II, line 16 or 24 (FUTA tax). (If Part II was not completed, use the amount from Schedule H (sp) or Schedule H-PR, Part I, line 8a.)

    4. Edit CCC "3" .

    5. Edit RPC "Y" .

    6. If Schedule H (sp) or Schedule H-PR is missing a valid signature or documentary evidence, correspond with Form 13975, using the following fill-in:
      "If you are not required to file a tax return, send us a completed Schedule H (sp) or Schedule H-PR, Part IV with your original signature. If someone other than the taxpayer is signing Schedule H (sp) or Schedule H-PR, include a power of attorney, court certificate, or Form 2848."

  4. When a loose Schedule H is received, process the Schedule H using instructions in IRM 3.11.3.

  5. For additional instructions, see IRM 3.11.3.

Schedule 8812 (Sequence 47) - Credits for Qualifying Children and Other Dependents

  1. The following lines on Schedule 8812 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 13 checkboxes (TY21 only) There are no T-Compute Lines
    Line 15 checkbox  
    Line 18a  
    Line 18b  
    Line 21  

  2. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, has only Puerto Rico source income (e.g., Form(s) 499R-2/W-2PR), and appears to be filing only to claim the additional child tax credit, correspond following the instructions at IRM 3.21.3.80.1.1 (2).

  3. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, but is filing a Form 1040 to report non-Puerto Rico source income along with claiming the additional child tax credit, continue processing the return.

  4. Edit the total Social Security and Medicare tax withheld amounts from all Forms W-2 (boxes 4 and 6), Forms 499R-2/W-2PR (boxes 21 and 23), and attachments on Schedule 8812, line 21 when all of the following conditions are present:

    • Schedule 8812, line 21 is blank, dash, or zero,

    • Schedule 8812, line 16b is $4,800 or more, and

    • Form 1040, line 28 has an amount.

    Note:

    The notation "FICA" on an attachment indicates Social Security tax withheld.

  5. If unable to edit an amount to line 21 using the instructions above, "X" Form 1040, line 28.

    Exception:

    Do not"X" Form 1040, line 28 if you can determine that all income is from self-employment or HSH, or if there is an indication that the taxpayer has filed Form 4029.

  6. For additional and prior year instructions, see IRM 3.11.3.

Form 8606 (Sequence 48, 49) - Nondeductible IRAs

  1. The following lines on Form 8606 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spousal Indicator - edited to the left of the form title Line 15c
    Line 7  
    Line 15c  
    Line 16  
    Line 17  
    Line 18  
    Line 22  

  2. For additional instructions, see IRM 3.11.3.

Form 8863 (Sequence 50) - Education Credits (American Opportunity and Lifetime Learning Credits)

  1. The following lines in Part I - Refundable American Opportunity Credit on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 1

  2. The following lines in Part II - Nonrefundable Education Credits on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 10 Line 10

  3. The following lines in Part III - Student and Educational Institution Information on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 20 There are no T-Compute Lines
    Line 21  
    Line 22, Column A, Line 4  
    Line 22, Column B, Line 4  
    Line 23  
    Line 24  
    Line 25  
    Line 26  

  4. For additional instructions, see IRM 3.11.3.

Form 4952 (Sequence 51) - Investment Interest Expense Deduction

  1. The following lines on Form 4952 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 4e There are no T-Compute Lines
    Line 4g  

  2. For additional instructions, see IRM 3.11.3.

Form 8889 (Sequence 52, 53) - Health Savings Accounts (HSAs)

  1. Use Sequence Code "52" for the primary taxpayer and "53" for the secondary taxpayer, even if only one form is filed.

  2. The following lines on Form 8889 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 21 Line 16

  3. For additional instructions, see IRM 3.11.3.

Form 8880 (Sequence 54) - Credit for Qualified Retirement Savings Contributions

  1. The following lines on Form 8880 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 6a and 6b There are no T-Compute Lines

  2. For additional instructions, see IRM 3.11.3.

Form 8995, Form 8995-A, and Form 8995-A Schedule C (Sequence 55/55A/55D) - Qualified Business Income Deduction

  1. Form 8995: The following lines on Form 8995 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 2 and 3 Line 5
    Lines 5 through 7 Line 9
    Line 9 Line 16
    Line 12 Line 17
    Lines 16 and 17  

  2. Form 8995-A: The following lines on Form 8995-A are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 27 through 29 Line 31
    Line 31 Line 40
    Line 34  
    Line 38  
    Line 40  

  3. Form 8995-A, Schedule C: The following lines on Form 8995-A, Schedule C are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 2 Line 6
    Line 6  
  4. For additional instructions, see IRM 3.11.3.

Form 8888 (Sequence 56) - Allocation of Refund (Including Savings Bond Purchases)

  1. The following lines on Form 8888 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1a through 1d There are no T-Compute Lines
    Lines 2a through 2d  
    Lines 3a through 3d  
    Line 4  
    Lines 5a through 5c  
    Line 5c Checkbox  
    Lines 6a through 6c  
    Line 6c Checkbox  
    Line 7  

  2. For additional instructions, see IRM 3.11.3.

Form 8978 (Sequence 57) - Partner’s Additional Reporting Year Tax

  1. The following lines on Form 8978 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Review Year Adj Code Checkbox (below entity) Line 14
    Line 14 Line 16
    Line 16 Line 18
    Line 18  

  2. For additional instructions, see IRM 3.11.3.

Form 5405 (Sequence 58, 59) - Repayment of the First-Time Homebuyer Credit

  1. The following lines on Form 5405 (edit Sequence Code "58" for the primary taxpayer and "59" for the secondary taxpayer, even if only one form is filed) are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    TIN There are no T-Compute Lines
    Line 1  
    Line 3 Checkboxes  
    Lines 4 and 5  
    Lines 7 and 8  

  2. For additional instructions, see IRM 3.11.3.

Form 8919 (Sequence 61, 62) - Uncollected Social Security and Medicare Tax on Wages

  1. The following lines on Form 8919 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Taxpayer TIN Line 6
    Lines 1 through 3, columns (a) through (f) Line 13
    Line 6  
    Line 8  
    Line 13  

  2. For additional instructions, see IRM 3.11.3.

Form 8958 (Sequence 63) - Allocation of Tax Amounts Between Certain Individuals in Community Property States

  1. The following lines on Form 8958 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spouse's or Partner's First Name There are no T-Compute Lines
    Spouse's or Partner's Last Name  
    Spouse's or Partner's Social Security Number  

  2. For additional instructions, see IRM 3.11.3.

Form 461 (Sequence 64) - Limitation on Business Losses

  1. The following lines on Form 461 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 8 through 12 Line 9
    Line 16 Line 12
      Line 16

  2. For additional instructions, see IRM 3.11.3.

Form 8941 (Sequence 65, 66) - Credit for Small Employer Health Insurance Premiums

  1. Only 2 forms can be processed:

    • One for the primary taxpayer (Sequence Code 65)

    • One for the secondary taxpayer (Sequence Code 66)

  2. The following lines on Form 8941 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Identifying Number (Top Right) There are no T-Compute Lines
    A - SHOP (Small Business Health Options Program) Checkbox  
    B - Employment Taxes via Employer Identification Number  
    C - Two-Year Declaration Checkbox  
    Lines 1 through 5  
    Line 10  
    Lines 13 through 16  

  3. For additional instructions, see IRM 3.11.3.

Form 6252 (Sequence 67) - Installment Sale Income

  1. The following lines on Form 6252 are the T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 7
    Lines 2a and 2b Line 19
    Line 7  
    Line 19  
    Line 21  
    Line 23  

  2. For additional instructions, see IRM 3.11.3.

Form 8910 (Sequence 68) - Alternative Motor Vehicle Credit

  1. The following lines on Form 8910 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, columns (a) and (b) There are no T-Compute Lines
    Line 2, columns (a) and (b)  

  2. For additional instructions, see IRM 3.11.3.

Form 8936 (Sequence 69) - Clean Vehicle Credits

  1. The following lines on Form 8936 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 4 Line 4
    Line 7  
    Line 20  

  2. For TY23 and later, correspond for a missing Form 8936 Schedule A if both of these conditions are present:

    • Form 8936 is present with an amount on line 6 or line 19, and

    • Form 3800, Part III, line 1y or line 1aa has an amount.

  3. For prior year instructions, see IRM 3.11.3.

Form 8936 Schedule A (Sequence 69A) - Clean Vehicle Credit Amount

  1. The following lines on Form 8936 Schedule A are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 2 Line 17
    Additional Form 8936 Schedule A Indicator (margin to the right of line 2) Line 26
    Lines 9 and 10  
    Line 17  
    Line 26  

  2. For TY23 and later:

    • Up to two Form 8936 Schedule A can be transcribed.

    • Edit the first two Form 8936 Schedule A, and delete any others.

    • When more than two Form 8936 Schedule A are attached, edit the Additional Form 8936 Schedule A Indicator "1" to the first schedule attached in the margin to the right of line 2.

    • When multiple instances of the same Vehicle Identification Number (VIN) appear on an attached Form 8936 Schedule A, edit Unallowable Code "79" .

  3. For TY22 and prior, "X" Form 8936 Schedule A.

Form 8936 Schedule A, Line 10 - Business/Investment Use Percentage

  1. When an entry is reported on line 10, edit as a three-digit whole number. See chart below:

    Reported As Edit As
    0.00001 000
    0.001 000
    0.01 001
    0.99999 099
    1.00000 100
    .7 070
    .12345 012

Form 8867 (Sequence 70) - Paid Preparer's Due Diligence Checklist

  1. The following lines on Form 8867 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    EIC checkbox There are no T-Compute Lines
    CTC/ACTC/ODC checkbox  
    AOTC checkbox  
    HOH checkbox  
    Line 15  

  2. For additional instructions, see IRM 3.11.3.

Form 8959 (Sequence 71) - Additional Medicare Tax

  1. The following lines on Form 8959 are T-Lines and T-Compute Lines.

    T-Lines T-Compute Lines
    Lines 1 through 3 There are no T-Compute Lines
    Lines 7 and 8  
    Lines 13 and 14  
    Lines 17 through 19  
    Lines 23 and 24  

  2. For additional instructions, see IRM 3.11.3.

Form 8960 (Sequence 72) - Net Investment Income Tax - Individuals, Estates, and Trusts

  1. The following lines on Form 8960 are T-Lines and T-Compute Lines.

    T-Lines T-Compute Lines
    Investment Income checkboxes Line 8
    Lines 1 through 3 Line 11
    Lines 4a and 4b  
    Lines 5a through 5c  
    Lines 6 through 8  
    Lines 9a through 9c  
    Lines 10 and 11  
    Line 13  
    Lines 16 and 17  

  2. For additional instructions, see IRM 3.11.3.

Form 8962 (Sequence 73, 74) - Premium Tax Credit (PTC)

  1. Sequence "73" is used for page 1. Sequence "74" is used for page 2 only if T-line entries are present.

  2. The following lines on Form 8962, Page 1 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Married Filing Separately PTC exception checkbox There are no T-Compute Lines
    Line 2b  
    Line 4 checkboxes  
    Line 8b  
    Lines 11 through 23, columns (a), (b),and (f)  
    Lines 24 and 25  

  3. The following lines on Form 8962, Page 2 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 30 through 33, columns (a) through (g) There are no T-Compute Lines
    Lines 35 and 36, columns (a) through (d)  

  4. For additional instructions, see IRM 3.11.3.

Form 5695 (Sequence 75) - Residential Energy Credits

  1. For TY23 and later, the following lines on the Form 5695 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 4 Line 16
    Checkbox Line 5a  
    Line 5b  
    Checkbox Line 7a  
    Line 8  
    Left of Line 10  
    Line 12  
    Line 16  
    Checkbox Lines 17a through 17c  
    Line 18a  
    Lines 19a and 19c  
    Line 20a  
    Checkbox Lines 21a and 21b  
    Line 22a  
    Line 23a  
    Line 24a  
    Line 25a  
    Checkbox Line 26a  
    Line 26b  
    Lines 29a through 29c  

  2. For TY22 and prior, "X" Form 5695.

Form 5695, Line 10 - Kilowatt Capacity

  1. Using the taxpayer entry in the decimal field to the left of line 10, edit to the left of line 10 an 8-digit whole number comprised of the last 6 digits to the left of the decimal point followed by the first 2 digits to the right of the decimal point. See chart below.

    Note:

    If there are less than 6 digits to the left of the decimal point or less than 2 digits to the right of the decimal point, add enough leading and/or trailing zeros to meet the 8-digit requirement.

    Kilowatt Capacity Entered as Decimal Kilowatt Capacity Edited as a Whole Number
    123 00012300
    222.33 00022233
    333.987654321987 00033398
    .7 00000070
    .987654321987 00000098
    1234567890 56789000
    1234567890.987654321987 56789098

Form 965-A (Sequence 76) - Individual Report of Net 965 Tax Liability

  1. The following lines on Form 965-A are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Part I, column a (first 5 lines) There are no T-Compute Lines
    Part I Additional Data Indicator, edited in margin to the right of Part I, line 1, column e  
    Part I, column j (first 5 lines)  
    Part I, column k (first 5 lines)  
    Part IV, column f (first 5 lines)  
    Part IV Additional Data Indicator, edited in margin to the right of Part IV, line 1, column i  
    Total Line, Page 3  

  2. For additional instructions, see IRM 3.11.3.

Form 9000 (Sequence 77) - Alternative Media Preference

  1. The following lines on Form 9000 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 There are no T-Compute Lines
    Taxpayer Indicator, edited in right margin by SSN  

  2. For additional instructions, see IRM 3.11.3.

Schedule LEP (Sequence 77A) - Request for Change in Language Preference

  1. The following lines on Schedule LEP are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 There are no T-Compute Lines
    Taxpayer Indicator, edited in right margin by SSN  

  2. For additional instructions, see IRM 3.11.3.

Form 8997 (Sequence 78) - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. The following lines on Form 8997 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Part I, 1st line, columns (a), (b), (d), (e), and (f) Part I, line 2, columns (e) and (f)
    Part I Additional Info Indicator - Part I, margin to right of column (f) Part II, line 2, columns (e) and (f)
    Part I, line 2, columns (e) and (f) Part III, line 2, columns (e) and (f)
    Part II, 1st line, columns (a), (b), (d), (e), and (f) Part IV, line 2, columns (e) and (f)
    Part II Additional Info Indicator - Part II, margin to right of column (f)  
    Part II, line 2, columns (e) and (f)  
    Part III, 1st line, columns (a), (b), (d), (e), and (f)  
    Part III Additional Info Indicator - Part III, margin to right of column (f)  
    Part III, line 2, columns (e) and (f)  
    Part IV, 1st line, columns (a), (b), (d), (e), and (f)  
    Part IV Additional Info Indicator - Part IV, margin to right of column (f)  
    Part IV, line 2, columns (e) and (f)  

  2. For additional instructions, see IRM 3.11.3.

Form 4136 (Sequence 79) - Credit for Federal Tax Paid on Fuels

  1. The following lines on Form 4136 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 16, column (d) There are no T-Compute lines

  2. For TY22 and prior, renumber the Sequence Code to "79" in the upper-right margin.

  3. For instructions, see IRM 3.11.3.

American Samoa - Overview

  1. American Samoa (AS) has its own separate and independent income tax system.

  2. Bona fide residents of American Samoa are generally exempt from United States tax on their American Samoa source income.

  3. United States Armed Forces: Bona fide residents of American Samoa include military personnel whose official home of record (i.e., SLR) is American Samoa.

American Samoa (AS) - Filing Requirements Overview

  1. Returns may be filed with both American Samoa and the United States depending on the source of income and the taxpayer’s residency status. The income reported on each return depends on the taxpayer’s residency status in American Samoa.

  2. If the taxpayer is a bona fide resident of AS and a United States citizen, resident, or nonresident alien during the entire year, they may need to file two returns:

    1. An AS tax return.

    2. A U.S. tax return reporting gross worldwide income except income from sources within American Samoa (IRC 931). Form 4563 may be attached.

  3. A taxpayer does not have a United States income tax filing obligation if both are true:

    1. The taxpayer is a bona fide resident of American Samoa.

    2. The taxpayer only has income derived from sources in American Samoa.

    Exception:

    Income received for services performed as an employee of the United States government or any of its agencies cannot be excluded from the United States tax return. If the United States government wages are reported on both the United States and AS tax returns, Form 1116 can be attached to the United States tax return to claim a credit for the taxes paid to AS.

  4. If the taxpayer is not a bona fide resident of AS during the entire tax year and they are a United States citizen or resident alien, they may need to file two returns:

    1. An AS tax return.

    2. A U.S. tax return to report income from worldwide sources. Form 1116 can be used to claim a credit for income paid to American Samoa on American Samoa source income subject to double taxation for income taxes paid.

      Exception:

      Nonresident aliens report only U.S. source and U.S. effectively connected income.

  5. If the taxpayer is not a bona fide resident of AS during the entire tax year and they are a nonresident alien, they may need to file two returns:

    1. An AS tax return.

    2. A U.S. tax return reporting income from U.S. sources.

Processing Form 1040 With Income or Address From American Samoa
  1. If the only source of income is from a Form W-2AS AND there is an indication that the taxpayer is a bona fide resident:

    1. Correspond by preparing Form 3696-A to initiate Letter 86C, which informs the taxpayer that their return has been transshipped to the Tax Division Government of American Samoa for processing.

      Exception:

      Do not prepare Form 3696-A for photocopied returns with a U.S. Territory received date.

    2. Attach Form 3696-A to the tax return and route it to the ERS clerical unit. The ERS clerical unit will issue Letter 86C and transship the tax return to:
      American Samoa Tax Office
      Executive Office Building
      First Floor
      Pago Pago, AS 96799

    Note:

    For numbered returns, edit Action Code "640" , attach Form 4227, and notate "transship to American Samoa for processing."

  2. If there is no indication that the taxpayer is a bona fide resident of American Samoa, continue processing the return.

  3. Taxpayers who reside outside the 50 U.S. states and the District of Columbia generally are not entitled to claim EIC.

    1. If the taxpayer is not claiming EIC, edit RPC "B" .

    2. If the taxpayer is claiming EIC, see IRM 3.21.3.15.1.30.

      Caution:

      If the taxpayer is not a bona fide resident of any U.S. territory and is U.S. military personnel, the taxpayer is considered a resident of the U.S. for the entire year and may be able to claim EIC.

  4. "X" any amount claimed for Additional Child Tax Credit (ACTC) on line 28, unless you can determine the taxpayer is U.S. military personnel. See IRM 3.21.3.15.1.31.

  5. If the taxpayer is claiming withholding from American Samoa, see IRM 3.21.3.15.1.28.

  6. The taxpayer may claim excess Social Security and RRTA taxes withheld. Verify the withholding.

    Note:

    Consider all Forms W-2 submitted when verifying the withholding.

  7. For additional information on bona fide residence rules, military personnel, and military spouses, see IRM 3.21.3.3.6.

Form 1040 With Form 4563 - Exclusion of Income For Bona Fide Residents of American Samoa Under IRC 931
  1. Form 4563 is not transcribed. Do not perfect Form 4563. For TY18 and prior, "X" Form 4563 when it is attached.

  2. Form 4563 is used to figure the amount of income from sources within American Samoa that may be excluded in accordance with IRC 931 from gross income on Form 1040.

  3. This exclusion may be claimed if a taxpayer is a bona fide resident of American Samoa. Eligible taxpayers will file Form 1040 and:

    • Attach Form 4563, and

    • Report worldwide income.

  4. Income that can be excluded in accordance with IRC 931:

    • Income received from sources in American Samoa, and

    • Income effectively connected with the conduct of a trade or business in American Samoa.

  5. If wages and salaries paid by the U.S. government or any of its agencies was excluded under IRC 931:

    1. "X" the exclusion, and

    2. Include the income on the appropriate income line.

  6. If the taxpayer claims the exclusion in accordance with IRC 931, the following are examples of deductions and credits that will be limited on Form 1040:

    • The standard deduction

    • Certain itemized deductions such as medical and dental expenses, gifts to charity, and real estate taxes and mortgage interest on personal residence

  7. If taxpayer reports only U.S. income and attaches a copy of the territory's return indicating that territory income was reported to the territory government, correspond for Form 4563 to exclude the income under IRC 931 or Form 1116 to claim a foreign tax credit on the U.S. return.

  8. If a taxpayer claiming an exclusion on Form 4563 has also claimed EIC, take the following actions:

    1. "X" Schedule EIC,

    2. "X" Form 1040, line 27, and

    3. Edit RPC "B" .

Processing Procedures When Form 4563 is Attached or IRC 931 Exclusion is Claimed
  1. If the taxpayer is claiming the exclusion under IRC 931, Form 4563 must be attached:

    If And Then
    Form 4563 is attached The income and/or exclusion is not reported anywhere on Form 1040 Edit a "1" on Form 3471-E, line 8.
    Form 4563 is attached, Income and/or exclusion is reported and/or excluded
    1. Edit a "1" on Form 3471-E, line 8 (see Figure 3.21.3-22),

    2. "X" the IRC 931 entries on Form 1040 and/or Schedule 1, and

    3. If the deleted entries were the only entries, edit RPC "L" and CCC "B" .

    Form 4563 is not attached, The taxpayer claims the exclusion under IRC 931 Correspond for Form 4563.

    Figure 3.21.3-22

    This is an Image: 34010022.gif

    Please click here for the text description of the image.

Guam - Overview

  1. The Guam system of income taxation is based on the income tax laws of the United States. Guam has its own tax system based on the same tax laws and tax rates that apply to the United States.

  2. Individuals with income from Guam will only file one return, either with Guam or the IRS, unless the taxpayer is a nonresident alien and not a bona fide resident of Guam. See IRM 3.21.3.77.1 for filing requirements.

  3. Members of the U.S. Armed Forces who:

    1. Qualify as a bona fide resident of Guam in a prior tax year, and are absent from Guam solely in compliance with military orders, must file with Guam.

    2. Did not qualify as a bona fide resident of Guam in a prior tax year, and are present in Guam solely in compliance with military orders, must file with the IRS.

Guam - Filing Requirements Overview

  1. If the taxpayer is a United States citizen, resident alien, or nonresident alien and is a bona fide resident of Guam during the entire tax year, they must file their income tax return with Guam.

  2. If the taxpayer is a United States citizen, or resident alien and is not a bona fide resident of Guam during the entire tax year, they must file their income tax return with the IRS. The tax return will include:

    1. Form 1040, reporting income from worldwide sources

    2. All income tax withheld by either the United States or Guam

    3. Any credit for overpayment of income tax to either the United States or Guam

    4. Any payments of estimated tax to either the United States or Guam

    5. Payment of any balance of tax due

    6. Form 5074, if the adjusted gross income is $50,000 or more for the tax year and gross income of $5,000 or more is from sources within Guam

      Exception:

      Military employees do not require a Form 5074.

  3. If the taxpayer is a nonresident alien of the United States and is not a bona fide resident of Guam during the entire tax year, they must:

    1. File a Guam income tax return reporting only their Guam source income

      Note:

      In this situation, Guam source income is any income received for services performed in Guam, even if they were paid by the U.S. government.

    2. File a Form 1040-NR, reporting U.S. source income

Processing Form 1040 with Address or Income from Guam
  1. If there is an indication that the taxpayer is a bona fide resident of Guam:

    1. Correspond using Form 3696-A to initiate Letter 86C, which informs the taxpayer that their return has been transshipped to the Department of Revenue and Taxation, Government of Guam for processing.

      Exception:

      Do not prepare Form 3696-A for photocopied returns with a U.S. Territory received date.

    2. Attach Form 3696-A to the tax return, and route it to the ERS clerical unit. The ERS clerical unit will issue Letter 86C and transship the tax return to:
      Department of Revenue and Taxation
      Taxpayer Services Division
      P.O. Box 23607
      Barrigada, GU 96921

    Note:

    For a numbered return, edit Action Code "640," attach Form 4227, and notate "transship return to the Department of Revenue and Taxation, Government of Guam."

  2. If there is no indication that the taxpayer is a bona fide resident of Guam ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, continue processing the return.

  3. Taxpayers who reside outside the 50 U.S. states and the District of Columbia generally are not entitled to claim EIC.

    1. If the taxpayer is not claiming EIC, edit RPC "B" .

    2. If the taxpayer is claiming EIC, see IRM 3.21.3.15.1.30.

      Caution:

      If the taxpayer is not a bona fide resident of any U.S. territory and is U.S. military personnel, the taxpayer is considered a resident of the U.S. for the entire year and may be able to claim the EIC.

  4. "X" any amount claimed for Additional Child Tax Credit (ACTC) on line 28, unless you can determine the taxpayer is a U.S. military personnel. See IRM 3.21.3.15.1.31.

  5. If the taxpayer files Form 1040 Guam Individual Income Tax Return, send the return to the Department of Revenue and Taxation. See instructions in IRM 3.21.3.77.1.1 (1).

  6. If the taxpayer is claiming withholding from Guam, allow the withholding.

  7. The taxpayer may claim excess Social Security and RRTA taxes withheld. Verify the withholding.

    Note:

    Consider all Forms W-2 submitted when verifying the withholding.

  8. For additional information on bona fide residence rules, military personnel, and military spouses, see IRM 3.21.3.3.6.

Processing Form 1040 with Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)
  1. Form 5074 provides information to the U.S. so that the IRS can figure the individual income tax that is due to Guam or the CNMI.

  2. Form 5074 is required when both are true:

    • A U.S. citizen or resident alien reports adjusted gross income of $50,000 or more, and

    • $5,000 or more of the gross income is derived from Guam or CNMI sources

  3. If Form 5074 is required but not attached, route to the workleader.

  4. The workleader will:

    1. Make one (1) copy of the entire return, including Forms W-2,

    2. Route the copy to Exam, and

    3. Return the original to the tax examiner to be processed.

  5. When Form 5074 is attached to Form 1040, edit Audit Code "L."

Commonwealth of the Northern Mariana Islands - Overview

  1. The Commonwealth of the Northern Mariana Islands (CNMI) system of income taxation is based on the income tax laws of the United States. The CNMI has its own tax system based on the same tax laws and tax rates that apply to the United States.

  2. Individuals with income from the CNMI will file only one return, either with the CNMI or IRS, unless the taxpayer is a nonresident alien and not a bona fide resident of CNMI. The taxpayer’s residency status under IRC 937(a) with respect to the CNMI determines which return they must file.

    1. Bona fide residents with worldwide income - If properly filed with CNMI, a taxpayer will not file a return with the U.S.

    2. Not bona fide residents with worldwide income - Taxpayer should claim withholding from the U.S. or CNMI on the corresponding U.S. or CNMI tax return.

    3. Taxpayers that reside in the CNMI cannot claim the Earned Income Credit, except in limited circumstances.

  3. Members of the U.S. Armed Forces who:

    1. Qualify as a bona fide resident of the CNMI in a prior tax year, and are absent from the CNMI solely in compliance with military orders must file with CNMI.

    2. Did not qualify as a bona fide resident of the CNMI in a prior tax year, and are present in the CNMI solely in compliance with military orders will not qualify as a bona fide resident in the current tax year and must file with the IRS.

  4. For additional information on bona fide residence rules, military personnel, and military spouses, see IRM 3.21.3.3.6.

CNMI - Filing Requirements Overview

  1. If the taxpayer is a United States citizen, resident alien, or nonresident alien and is a bona fide resident of the CNMI during the entire tax year, they must file their income tax return with the CNMI.

  2. If the taxpayer is a United States citizen or resident alien, and is not a bona fide resident of CNMI during the entire tax year, they must file their income tax return with the IRS. The tax return will include:

    1. Form 1040, reporting income from worldwide sources

    2. All income tax withheld by either the United States or CNMI

    3. Any credit for overpayment of income tax to either the United States or CNMI

    4. Any payments of estimated tax to either the United States or CNMI

    5. Payment of any balance of tax due

    6. Form 5074, if the adjusted gross income is $50,000 or more for the tax year and gross income of $5,000 or more is from sources within CNMI

      Exception:

      Military employees do not require a Form 5074.

  3. If the taxpayer is a nonresident alien of the United States and is not a bona fide resident of CNMI during the entire tax year, they must:

    1. File a CNMI income tax return reporting only their CNMI source income, and

      Note:

      In this situation, CNMI source income is any income received for services performed in CNMI, even if they were paid by the U.S. government.

    2. File a Form 1040-NR reporting U.S. source income.

Processing Form 1040 with Address or Income from Commonwealth of the Northern Mariana Islands (CNMI)
  1. If the only source of income is from a Form W-2CM AND there is an indication that the taxpayer is a bona fide resident of CNMI:

    1. Correspond using Form 3696-A to initiate Letter 86C, which informs the taxpayer that their return has been transshipped to the Division of Revenue and Taxation of CNMI for processing.

      Exception:

      Do not prepare Form 3696-A for photocopied returns with a U.S. Territory received date.

    2. Attach Form 3696-A to the tax return and route it to the ERS clerical unit. The ERS clerical unit will issue Letter 86C and transship the tax return to:
      Commonwealth of the Northern Mariana Islands
      Division of Revenue and Taxation
      P.O. Box 5234, CHRB
      Saipan, MP 96950

    Note:

    For a numbered return, edit Action Code "640," attach Form 4227, and notate "transship return to the Division of Revenue and Taxation of CNMI."

  2. If there is no indication that the taxpayer is a bona fide resident of CNMI, continue processing the return.

  3. Taxpayers who reside outside the 50 U.S. states and the District of Columbia generally are not entitled to claim EIC.

    1. If the taxpayer is not claiming EIC, edit RPC "B" .

    2. If the taxpayer is claiming EIC, see IRM 3.21.3.15.1.30.

      Caution:

      If the taxpayer is not a bona fide resident of any U.S. territory and is a U.S. military personnel, the taxpayer is considered a resident of the U.S. for the entire year and may be able to claim the EIC.

  4. "X" any amount claimed for Additional Child Tax Credit (ACTC) on line 28, unless you can determine the taxpayer is a U.S. military personnel. See IRM 3.21.3.15.1.31.

  5. If the taxpayer is claiming withholding from CNMI, allow the withholding.

  6. The taxpayer may claim excess Social Security and RRTA taxes withheld. Verify the withholding.

    Note:

    Consider all Forms W-2 submitted when verifying the withholding

    .

Processing Form 1040 with Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)
  1. Form 5074 provides information to the U.S. so that the IRS can figure the individual income tax that is due to Guam or the CNMI.

  2. Form 5074 is required when both are true:

    • A U.S. citizen or resident alien reports adjusted gross income of $50,000 or more.

    • $5,000 or more of the gross income is derived from Guam or CNMI sources.

  3. If Form 5074 is required but not attached, route to the workleader.

  4. The workleader will:

    1. Make one (1) copy of the entire return, including Forms W-2,

    2. Route the copy to Exam, and

    3. Return the original to the tax examiner to be processed.

  5. When Form 5074 is attached to Form 1040, edit Audit Code "L."

United States Virgin Islands (USVI) - Overview

  1. The USVI system of income taxation is based on the income tax laws of the United States.

  2. In general, a bona fide resident of the USVI files an income tax return with the USVI and not with the IRS.

  3. A United States citizen or resident alien who is not a bona fide resident of the USVI, but has USVI source income, will file an income tax return with the IRS and an identical copy of the U.S. return with the USVI.

United States Virgin Islands - Filing Requirements Overview

  1. In general, bona fide residents of the USVI pay taxes only to the USVI. U.S. citizens or resident aliens (but not bona fide residents of the USVI) with USVI source income pay a portion of tax to each jurisdiction.

    1. Bona fide residents include worldwide income on the USVI return and generally do not file a return with the United States unless using Form 1040-SS to report effectively connected net business income of $400 or more from a trade or business in USVI.

    2. Not bona fide residents with worldwide income file identical returns with the United States and the USVI, and the U.S. Form 8689 must be attached to both returns.

  2. For taxable years ending on or after December 31, 2006, all United States citizens, resident aliens, and nonresident aliens who are bona fide residents of the USVI must file with the USVI and report worldwide income.

  3. For taxable years ending before December 31, 2006, if the taxpayer is a United States citizen, resident alien, or nonresident alien and a bona fide resident of the USVI during the entire tax year, and their gross income is $75,000 or more, the taxpayer must file with:

    1. The USVI and report worldwide income and

    2. The IRS, in order to start the U.S. statute of limitations on assessment, as described in Notice 2007-19.

      Note:

      The tax return filed with the IRS will include taxpayer's name, address, Taxpayer Identification Number (TIN), and signature.

  4. If the taxpayer is a United States citizen or resident alien and not a bona fide resident of the USVI during the entire tax year, the taxpayer must file identical tax returns with the IRS and the USVI if the taxpayer has:

    1. Income from sources in the USVI or

    2. Income effectively connected with the conduct of a trade or business in the USVI.

    Note:

    The taxpayer will complete and attach Form 8689 to both returns to determine how much tax to pay to the U.S. and to the U.S. Virgin Islands.

  5. If the taxpayer is a nonresident alien of the United States and not a bona fide resident of the USVI during the entire tax year, they must file:

    1. A return with the USVI, reporting income from sources in the USVI and

    2. A Form 1040-NR reporting U.S. source income.

  6. For a VI Cover Over return found in a batch of regular returns:

    1. If a return has a "U.S. Claim" stamp in the top margin of the return, take it to the work leader.

    2. Work leader will contact P&A for instructions.

Processing Form 1040 with Address or Income from United States Virgin Islands
  1. If there is an indication that the taxpayer is a bona fide resident of USVI ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the only source of income is from a Form W-2VI:

    1. Correspond using Form 3696-A to initiate Letter 86C, which informs the taxpayer that their return has been transshipped to the Virgin Islands Bureau of Internal Revenue for processing.

      Exception:

      Do not prepare Form 3696-A for photocopied returns with a U.S. Territory received date.

    2. Attach Form 3696-A to the tax return and route it to the ERS clerical unit. The ERS clerical unit will issue Letter 86C and transship the tax return to:
      Virgin Islands Bureau of Internal Revenue
      6115 Estate Smith Bay
      Suite 225
      St. Thomas, VI 00802

    Note:

    For a numbered return, edit Action Code "640," attach Form 4227, and notate "transship to the Virgin Islands for processing."

  2. If there is no indication that a taxpayer is a bona fide resident of the USVI, continue processing the return.

  3. Taxpayers who reside outside the 50 U.S. states and the District of Columbia are not entitled to claim EIC.

    1. If the taxpayer is not claiming EIC, edit RPC "B" .

    2. If the taxpayer is claiming EIC, see IRM 3.21.3.15.1.30.

      Caution:

      If the taxpayer is not a bona fide resident of any U.S. territory and is U.S. military personnel, the taxpayer is considered a resident of the U.S. for the entire year and may be able to claim the EIC.

  4. "X" any amount claimed for Additional Child Tax Credit (ACTC) on line 28, unless you can determine the taxpayer is a U.S. military personnel. See IRM 3.21.3.15.1.31.

  5. If the taxpayer is claiming withholding from Virgin Islands, see IRM 3.21.3.15.1.28.

  6. The taxpayer may claim excess Social Security and RRTA taxes withheld. Verify the withholding.

    Note:

    Consider all Forms W-2 submitted when verifying the withholding.

Form 8689 - Allocation of Individual Income Tax to the Virgin Islands
  1. Form 8689 is used to figure the amount of U.S. tax allocable to the USVI.

    Caution:

    If Form 8689 is attached or there is an indication on the dotted portion of line 33, Form 1040 that the taxpayer is either reporting taxes paid to the USVI or filing in compliance with Notice 2007-19 (zero return, taxpayer's name, address, TIN, and signature), do not send these returns to the USVI. See IRM 3.21.3.79.2.

  2. Taxes paid to the USVI may be claimed as a credit on the dotted portion of Form 1040, line 33 by completing and attaching Form 8689.

    1. If the amount edited to the dotted portion of Form 1040, line 33 or included in the total on Schedule 3, line 14 is greater than the tax on Form 1040, line 24, adjust the credit to equal the tax amount on Form 1040, line 24.

    2. Ensure the credit amount claimed or edited on the dotted portion of Form 1040, line 33 or included in the total of Schedule 3, line 14 has been included in the total of Form 1040, line 33 or Schedule 3, line 14, respectively.

  3. If Form 8689 is not attached and the taxpayer notated Form 8689 on the dotted portion of Form 1040, line 33 and/or is claiming a credit on the dotted portion of Form 1040, line 33 or Schedule 3, line 13z or 14, then correspond for Form 8689 when the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

Processing Form 1040 in Compliance with Notice 2007-19
  1. Review the return for indications the taxpayer is filing in compliance with Notice 2007-19, including:

    1. Notation on the return Notice 2007-19

    2. Zero tax return (no dollar entries)

    3. Affirmation statement indicating filed a USVI Form 1040

    4. Statement of gross income of $75,000 or more

    5. Statement affirming the taxpayer's bona fide residency in the USVI along with a summary of facts on which the residency is based

  2. If an indication is found, the return must be hand carried from function to function.

  3. "X" all entries except:

    • Caption Information,

    • Computer Condition Code (CCC), Return Processing Code (RPC), and

    • Received Date

    Exception:

    If the return includes both Notice 2007-19 and Form 8689, process as Form 1040 with Form 8689. See IRM 3.21.3.79.1.

Processing Form 1040 in Compliance with Notice 2007-31
  1. The USVI Bureau Internal Revenue (BIR) will send to the IRS copies of the taxpayers' returns for 2006 and later when the taxpayer files a return with the USVI BIR and they meet each of the following conditions:

    1. Bona fide resident of USVI and

    2. Gross income of $75,000 or more

  2. The return will be only page 1 of Form 1040 and include a watermark "Filed due to VI Notice 2007-31" in the upper-left corner of page 1 Form 1040.

  3. These returns must be hand carried from function to function.

  4. "X" all entries except:

    • Caption Information

    • RPC "L"

    • CCC "B"

    • RPC "V"

    • Received Date

    Note:

    These are the only valid codes for returns filed under Notice 2007-31.

    Reminder:

    For Virgin Islands filed for Cover Over for Notice 2007-31 as Form 1040A (2017 and prior) or Form 1040EZ (2017 and prior), circle the "A" or "EZ" as applicable in red. The return will then be processed as a prior year Form 1040.

Processing U.S. Virgin Islands (VI) Cover-Over Program Form 1040

  1. The Virgin Islands Bureau of Internal Revenue (BIR) sends Form 1040 and Form 1040A (TY17 and prior) tax returns to the IRS that require special handling and editing, also known as the Cover-Over Program. The returns will be hand carried by the Planning and Analysis staff to each function. After the returns are edited, the Planning and Analysis staff must be notified so the returns can be hand carried to the next function. Use the procedures below to edit these returns.

  2. Delete all dependent entries. For TY17 and prior, also delete all exemption entries.

  3. Edit the following information and lines following line by line instructions:

    1. Caption Information

    2. CCCs, RPCs, and SPC

    3. Received Date

  4. Edit only the Caption Information of the return. If a U.S. address is in the caption area, it must be circled out. Perfect the ZIP code to 00801.

  5. Always edit CCCs:

    • "3" (MUST BE EDITED FIRST)

    • "B"

    • "O"

    Note:

    These are the only valid codes for returns filed with a U.S. Claim stamp in the top margin of the return.

  6. Ensure the received date stamped by the USVI BIR is legible.

    Note:

    Always use the USVI Received Date. If the received date stamped by the USVI is illegible, use the signature date.

  7. Edit RPCs:

    • "B"

    • "K" (Statute Years Only)

      Reminder:

      Do not send these returns to Statute.

    • "L"

    Note:

    These are the only valid codes for returns filed with a U.S. Claim stamp in the top margin of the return.

  8. Edit SPC "B" .

    Note:

    This is the only valid code for returns filed with a U.S. Claim stamp in the top margin of the return.

  9. "X" all entries except:

    • Caption information

    • CCCs, RPCs, and SPC

    • Received Date

Puerto Rico - Overview

  1. The Commonwealth of Puerto Rico has an independent income tax system.

  2. Generally the taxpayer will file returns with both Puerto Rico and the IRS. The income reported on each return depends on the taxpayer’s residency status in Puerto Rico.

Puerto Rico (PR) - Filing Requirements Overview

  1. Generally, returns will be filed with both Puerto Rico and the United States. The income reported on each return depends on the taxpayer's residency status in Puerto Rico.

  2. If the taxpayer is a bona fide resident of Puerto Rico during the entire tax year and is a United States citizen or resident alien, they generally must:

    1. File a Puerto Rico tax return.

    2. If the taxpayer has income from sources other than Puerto Rico, they also file a United States tax return to report income from worldwide sources, but exclude Puerto Rico source income under IRC 933. The taxpayer will not be allowed any deductions or credits that are directly or indirectly allocable to exempt income.

      Exception:

      Income received for services performed as an employee of the United States government or any of its agencies cannot be excluded from the IRS tax return. If United States government wages are reported on both the IRS and Puerto Rico tax returns, Form 1116 can be attached to the IRS tax return to claim a credit for income taxes paid to Puerto Rico.

      Note:

      U.S. government cost of living allowances are excludable from U.S. income tax.

    3. If the taxpayer does NOT have any income other than PR source income, they are ONLY required to file a Puerto Rico return unless using Form 1040-SS to report effectively connected net business income of $400 or more from a trade or business in Puerto Rico.

  3. If the taxpayer is a bona fide resident of Puerto Rico during the entire tax year and is a nonresident alien of the United States, they generally must:

    1. File a Puerto Rico tax return.

    2. If the taxpayer has income from sources other than Puerto Rico, they also file a United States tax return to report income from worldwide sources, but exclude Puerto Rico source income under IRC 933. The taxpayer will not be allowed the standard deduction, cannot file a joint return, and is not allowed deductions for dependents unless the person is a citizen or national of the United States, a resident of the United States, or a resident of a country contiguous to the United States.

      Exception:

      Income received for services performed as an employee of the United States government or any of its agencies cannot be excluded from the IRS tax return. If United States government wages are reported on both the IRS and Puerto Rico tax returns, Form 1116 can be attached to the IRS tax return to claim a credit for income taxes paid to Puerto Rico.

  4. If the taxpayer is not a bona fide resident of Puerto Rico during the entire tax year and is a United States citizen or resident alien, they generally must:

    1. File a Puerto Rico tax return.

    2. File a United States tax return to report income from worldwide sources. Form 1116 can be attached to claim credit for income taxes paid to Puerto Rico or Puerto Rico source income subject to double taxation.

  5. If the taxpayer is not a bona fide resident of Puerto Rico during the entire tax year and is a nonresident alien of the United States, they generally must:

    1. File a Puerto Rico tax return.

    2. File a United States tax return, Form 1040-NR, according to the rules for a nonresident alien, reporting only U.S. source and U.S. effectively connected income.

Processing Form 1040 with Address or Income from Puerto Rico
  1. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, has only Puerto Rico source income (e.g., Form(s) 499R-2/W-2PR), is not reporting self-employment tax, and is not claiming the additional child tax credit, do the following:

    1. Prepare Form 9143 to mail the return back to the taxpayer, and

    2. Use the following fill-in: Since you appear to be a bona fide resident of PR with only PR income, you do not have a U.S. tax filing obligation. If you have not already done so, you should file a return with the Departamento de Hacienda, PO Box 9022501, San Juan, PR 00902-2501. If you wish to file a US return to claim the Additional Child Tax Credit, you must do so on a Form 1040-PR or Form 1040-SS.

    Note:

    For a numbered return, edit Action Code "640," attach Form 4227, and notate "send to taxpayer."

    Exception:

    If the taxpayer is claiming excess Social Security and/or RRTA taxes, process the return.

  2. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, has only Puerto Rico source income (e.g., Form(s) 499R-2/W-2PR), and appears to be filing only to claim the additional child tax credit, do the following:

    1. Prepare Form 9143 to mail the return back to the taxpayer, and

    2. Use the following fill-in: Si usted radica una planilla de contribucion de los Estados Unidos, para reclamar el credito tributario adicional por hijos, a usted se le requiere completar el Formulario 1040-PR o 1040-SS. Consulte la Publicacion 570.

  3. If the taxpayer appears to be a bona fide resident of Puerto Rico ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, but is filing a Form 1040 to report non-Puerto Rico source income, continue processing the Form 1040.

  4. If there is no indication that the taxpayer is a bona fide resident of Puerto Rico, continue processing the return.

  5. If the taxpayer is claiming withholding from Puerto Rico, see IRM 3.21.3.15.1.28.

  6. Taxpayers who reside outside the 50 U.S. states and the District of Columbia generally are not entitled to claim EIC.

    1. If the taxpayer is not claiming EIC, edit RPC "B" .

    2. If the taxpayer is claiming EIC, see IRM 3.21.3.15.1.30.

  7. The taxpayer may claim excess Social Security and/or RRTA taxes withheld. Verify the withholding.

    Note:

    Consider all Forms W-2 submitted when verifying the withholding.

  8. For additional information on bona fide residency rules, military personnel, and military spouses, see IRM 3.21.3.3.6.

Processing Procedures for Excluding income - IRC 933

  1. Individuals that are considered bona fide residents of Puerto Rico during the entire tax year should exclude income derived from sources within Puerto Rico under IRC 933. However, if a bona fide resident of Puerto Rico received income from sources outside Puerto Rico during the tax year, then they generally must also file a return with the IRS reporting their worldwide gross income but excluding Puerto Rico source income. They may claim a Foreign Tax Credit on their U.S. income tax return using Form 1116 for taxes paid to Puerto Rico.

  2. Wages and salaries paid by the U.S. government are subject to U.S. federal income tax. This income does not qualify for the exclusion under IRC 933; therefore, these taxpayers may also be required to file an income tax return with the IRS. These returns may claim the foreign tax credit to avoid double taxation.

    1. If the exclusion is claimed, "X" where found.

    2. Edit the income to Form 1040, line 1a, if not already included.

  3. If the taxpayer is prorating their itemized deductions (Schedule A) under IRC 933, accept the taxpayer's prorated amount for itemized deductions. When two amounts are present on Schedule A, line 17, "X" out the larger amount.

  4. If the taxpayer qualifies under IRC 933 and does not itemize deductions, only the prorated amount of the standard deduction that is allocated to taxable income on Form 1040 is allowable. If the taxpayer has prorated their standard deduction, accept the taxpayer's figure.

  5. TY17 and prior: If the taxpayer is a bona fide resident of Puerto Rico, is exempting all income under IRC 933, and is claiming Additional Child Tax Credit on Form 1040A, convert to Form 1040, and then "X" the income and exclusion where found. See IRM 3.21.3.15.1.31.

  6. If the taxpayer is a bona fide resident of PR and indicates income reported on any Schedule C or Schedule F is excluded under IRC 933, take the following actions for each of these schedules:

    1. "X" the schedule.

    2. Prepare a dummy schedule.

    3. Edit the SSN.

    4. For Schedule C, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ if furnished by the taxpayer. Do not compute line 3. See Figure 3.21.3-23.

    5. For Schedule F, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ if furnished by the taxpayer.

  7. If Schedule SE is present, accept the taxpayer's figures.

  8. If income excluded under IRC 933 is reported anywhere on the return, delete the income and exclusion where found, including from Form 1040, line 1z, if applicable. Do not adjust line 9 or 11.

  9. When the taxpayer claims income exempt under IRC 933 and claims EIC, disallow EIC. "X" both Form 1040, line 27 and Schedule EIC, if attached.

  10. If Form 1116 is attached and Schedule 3, line 1 is blank, edit the amount from Form 1116, line 35 to Schedule 3, line 1.

  11. If a Cost of Living Allowance (COLA) is reported as an adjustment on Form 1040 or Schedule 1, page 2 by a U.S. government employee, delete the amount.

    Figure 3.21.3-23

    This is an Image: 34010023.gif

    Please click here for the text description of the image.

Taxpayers Who File Two Returns (Form 1040 with Form 1040-SS)

  1. In this specific subsection, references to Form 1040-SS are understood to apply to Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR (TY22 and prior).

  2. Determine if the taxpayer is a bona fide resident of Puerto Rico by using the taxpayer's address and checking Form W-2 to determine if state wages were paid to Puerto Rico.

  3. If a taxpayer, who lives or lived in Puerto Rico (PR), files Form 1040-SS to report self-employment tax and also files Form 1040 to report worldwide income, use the table below to determine which form should be processed:

    If Then
    The taxpayer is a United States government employee
    1. Process Form 1040 and all applicable forms and schedules reporting their U.S. source income and self-employment tax on Schedule SE.

    2. "X" Form 1040-SS.

    The taxpayer is a bona fide resident of Puerto Rico with only PR source income
    1. Process Form 1040-SS reporting self-employment tax.

    2. "X" Form 1040.

    The taxpayer is a bona fide resident with U.S. source income or other income with a source outside of Puerto Rico
    1. Process the Form 1040.

    2. "X" Form 1040-SS.

    The taxpayer is not a bona fide resident of Puerto Rico with U.S. source income
    1. Process the Form 1040.

    2. "X" Form 1040-SS.

    The taxpayer is not a bona fide resident of Puerto Rico without U.S. source income
    1. Process the Form 1040.

    2. "X" Form 1040-SS.

    The taxpayer cites IRC 933 anywhere on the return or filed Form 8898, and taxpayer does not have any income source outside of Puerto Rico
    1. Treat as a bona fide resident of PR, and process the Form 1040-SS.

    2. "X" Form 1040.

    Reminder:

    Transfer all T-line amounts as appropriate per the form that is to be processed. Also, dummy any schedules as needed.

Form 1040-SS and Form 1040-SS (sp) - General Instructions for TY23 and Later

  1. The instructions in this subsection apply to TY23 and later Form 1040-SS and Form 1040-SS (sp).

  2. Starting in TY23, Form 1040-PR is being renamed Form 1040-SS (sp). The Form 1040-SS will no longer have the Schedule C, Schedule F, and Schedule SE built in to the form. Taxpayers will have to file the separate schedules if applicable to their filing. The Form 1040-SS is written in English, and the Form 1040-SS (sp) is written in Spanish. Besides the language, both are identical forms, and taxpayers who reside in the U.S. territories of American Samoa (AS), the Commonwealth of the Northern Mariana Islands (CNMI), Guam (GU), Puerto Rico (PR), and the U.S. Virgin Islands (USVI) can file either Form 1040-SS or Form 1040-SS (sp). Throughout this subsection, references to Form 1040-SS are understood to apply to both Form 1040-SS and Form 1040-SS (sp).

  3. Form 1040-SS is filed by residents of U.S. territories and is used to:

    • report net earnings from self-employment and pay self-employment taxes,

    • pay any household employment taxes,

    • claim excess Social Security tax withheld,

    • pay any employee Social Security and Medicare tax on unreported tips or uncollected employee Social Security and Medicare tax on tips or group-term insurance, and

    • claim the additional child tax credit (only if qualified bona fide residents of Puerto Rico with at least 1 qualifying child).

  4. When correspondence is required, use:

    1. Form 13557 for Form 1040-SS for missing signatures or other correspondence when the return is being sent back to the taxpayer.

    2. Form 13975 for Form 1040-SS for correspondence when the return is not being sent back to the taxpayer.

  5. If a taxpayer, who lives or lived in Puerto Rico (PR), files Form 1040-SS to report self-employment and also files Form 1040 to report worldwide income, see IRM 3.21.3.80.3.

  6. If the taxpayer files Form 1040-SS along with a U.S. Form W-2 showing U.S. income, correspond and request that they file Form 1040 to report their income. Return the Form 1040-SS to the taxpayer using Form 13557, paragraph 11.

  7. For the items listed below, refer to the general instructions:

    • Received Dates, see IRM 3.21.3.8

    • Tax Period, see IRM 3.21.3.11

    • Taxpayer Identification Information, see IRM 3.21.3.12.2

    • Caption Information, see IRM 3.21.3.12.1

    • Address, see IRM 3.21.3.12.3.2 through IRM 3.21.3.12.6

    • P-TIN/S-TIN, see IRM 3.21.3.12.2.1 and IRM 3.21.3.12.2.2

    • Name Line and Additional Information Line, see IRM 3.21.3.12.3 through IRM 3.21.3.12.3.3

  8. Route all Forms 1040-SS to the workleader, when there is an indication it is a copy/copia, amended/enmendada, corrected/corregida, or electronically filed/radicada electronicamente, unless "no TC 150" is annotated.

  9. Route all Forms 1040-SS to the workleader for TC 150 research before corresponding, when only page 1 is present and the return was received with remittance.

Form 1040-SS - Transcription Lines

  1. The following lines/areas on Form 1040-SS, Page 1 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    • Tax Period

    • Primary TIN

    • Secondary TIN

    • Special Processing Code (SPC) - To the right of Spouse’s SSN

    • Primary Taxpayer Name

    • Secondary Taxpayer Name

    • Additional Information Line

    • Street Address

    • City, Town or Post Office/Commonwealth or Territory/ZIP Code

    • Digital Assets Code - Page 1 below Foreign Postal Code line

    • Computer Condition Code (CCC) - Part I line towards the center

    • Filing Status Code - To the left of Line 1

    • Qualifying Child's Name Control - Line 2(a)

    • Child’s Social Security Number - Line 2(b)

    • Checkmark for Child with Name/Identifying Number

    • Received Date

    • Line 3

    • Line 4

    • Line 5b (TY21 only)

    • Line 6

    • Line 7

    • Form Processing Code (FPC) - Page 1 in the margin to the right of Line 7

    • Line 8

    • Line 9

    • Line 11a (TY21, TY22, and TY23 only)

    • Line 11b (TY21, TY22, and TY23 only)

    • Dotted Portion of Line 12

    • Line 12

    • Line 14a

    • Line 14b - Routing Number

    • Line 14c - Checking/Savings box

    • Line 14d - Account Number

    • Line 15

    • Line 16

    • Third Party Designee Checkbox

    • Third Party Designee Name

    • Third Party Designee PIN

    • Primary IP PIN

    • Secondary IP PIN

    • Preparer SSN or PTIN

    • Preparer EIN

    • Preparer Phone Number

    • Preparer Code

    • E-File Waiver Code

    • Return Processing Code (RPC) - Bottom-Left Margin

    • Action Code - Bottom-Center Margin

    • Audit Code - Bottom-Right Margin

    • Line 6

    • Line 12

    • Line 14a

    • Line 16

  2. The following lines on Form 1040-SS, Page 2 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    • Line 3

    • Line 13f

    • Line 13f

Editing Part I and II of Form 1040-SS

  1. Follow line by line instructions.

Editing Part I, Lines 1 - 16 (Total Tax and Credits)

  1. The taxpayer uses this section to report Total Tax and Credits.

Line 1 - Filing Status Code (FSC)
  1. The Filing Status Code (FSC) must always be edited. Edit the FSC in the left margin beside the filing status (FS) area. See Figure 3.21.3-24.

  2. For TY23 and later, use the following table to edit the correct FSC when one filing status box is marked:

    FS Box Marked And Then
    Single   Edit FSC "1" .
    Married filing jointly Two signatures are present Edit FSC "2" .
    Married filing jointly One signature is present Correspond for the spouse’s missing signature.
    Married filing separately (MFS) Spouse's name is not included in the caption area Edit FSC "3" .
    Married filing separately (MFS) Spouse's name is included in the caption area, but only one signature is present Edit FSC "3" , and circle the spouse's name.
    Married filing separately (MFS) Spouse’s name is not included in the caption area, but two signatures are present Edit FSC "3" .
    Married filing separately (MFS) Spouse’s name is included in the caption area, and two signatures are present Edit FSC "2" .
    Head of household At least one qualifying child is present Edit FSC "4" .
    Head of household No qualifying children are present Edit FSC "1" .
    Qualifying surviving spouse No spousal date of death, or date of death was within the two years before the tax year of the return Edit FSC "5" .
    Qualifying surviving spouse Both of the following conditions are present:
    • Spousal date of death was more than two years before the tax year of the return, AND

    • No qualifying children are present

    Edit FSC "1" .
    Qualifying surviving spouse Both of the following conditions are present:
    • Spousal date of death was more than two years before the tax year of the return, AND

    • At least one qualifying child is present

    Edit FSC "4" .
    Qualifying surviving spouse Spousal date of death was either within the tax year of the return or after the tax year of the return Edit FSC "2" .

  3. For TY23 and later, use the following table to edit the correct FSC when no filing status box is marked:

    If Then
    Two names are in the caption and two signatures are present Edit FSC "2" .
    Both of the following conditions are present:
    • One name is in the caption and one signature is present, AND

    • An S-TIN or spouse's name is entered on the line under the filing status boxes, or an S-TIN is present in the caption area

    Edit FSC "3" .
    Any other condition exists Edit FSC "1" .

  4. For TY23 and later, when more than one filing status box is marked (unless both filing status Single and filing status Head of household are marked), edit the FSC for the marked filing status box that has the largest corresponding FSC number.

  5. For TY23 and later, if both filing status Single and filing status Head of household are marked, use the following table to edit the correct FSC:

    If Then
    At least one qualifying child is present Edit FSC "4" .
    No qualifying children are present Edit FSC "1" .

Line 2 - Qualifying Children Information
  1. For Form 1040-SS, up to four qualifying children name controls and Social Security Numbers can be transcribed.

  2. A qualifying child may include a son, daughter, stepchild, adopted child, grandchild, niece, nephew, foster child, brother, sister, stepbrother, stepsister, half-brother, or half-sister. For additional information on qualifying children, see IRM 3.11.3.13.1.1. "X" all claimed dependents that are not qualifying children. See Figure 3.21.3-24.

    Note:

    Treat a relationship of "g child" as a godchild, and "X" the dependent. Also, "X" a dependent with a blank relationship.

  3. For TY23 and later, if the taxpayer has not claimed at least one qualifying child or the taxpayer's address is not in Puerto Rico, take the following actions:

    1. "X" all dependents,

    2. "X" the amount on line 9 (Additional Child Tax Credit), and

    3. "X" Part II.

    Figure 3.21.3-24

    This is an Image: 34010024.gif

    Please click here for the text description of the image.

Child's Social Security Number
  1. Every qualifying child must have a Social Security Number. Search attachments for any qualifying child's Social Security Number not listed on line 2(b).

  2. If the missing Social Security Number is found and:

    If four Social Security Numbers are Then
    Already listed "X" the name of the dependent(s) without a listed Social Security Number
    Not already listed Edit up to four Social Security Numbers to line 2(b).

  3. If the missing Social Security Number is not found on the return or attachments, take the following actions:

    If the taxpayer And Then
    Notes "Died" (child born and died during the tax period) Birth or death certificate or copies of hospital medical record(s) are not attached Correspond for the missing birth certificate.
    Provides no Social Security Number Fewer than four Social Security Numbers are present for other dependents "X" the name(s) of the qualifying child(ren) on line 2(a).
    Provides no Social Security Number At least four Social Security Numbers are present for other dependents Take no action.

  4. When corresponding for other missing return items, correspond for missing Social Security Numbers of all qualifying children.

    Exception:

    Do not correspond when a dependent Social Security Number is missing, and there is an indication that the dependent was born and died during the tax year.

Qualifying Child's Name Control
  1. The name control(s) must be present for the first four qualifying children with Social Security Numbers listed on line 2. If missing, edit the name control(s) to the qualifying child's name area. Determine the missing name control(s) in the following priority:

    1. From supporting attachments

    2. From the primary taxpayer's name control

Line 2c - Child Tax Credit Indicator
  1. Edit a checkmark to the right of line 2(c) in the margin for every qualifying child with a name control and complete Social Security Number. See Figure 3.21.3-25.

    Caution:

    Do not edit a checkmark if the qualifying child was "X" -ed (disallowed).

    Figure 3.21.3-25

    This is an Image: 34010025.gif

    Please click here for the text description of the image.

Line 3 - Self-Employment Tax
  1. If an amount is present on line 3, Schedule SE must be attached and completed.

  2. If Schedule SE is missing or blank, dummy Schedule SE from Schedule C or Schedule F, if possible.

  3. If an amount is present and Schedule SE is missing or blank and cannot be dummied, correspond for Schedule SE.

    Exception:

    If the taxpayer used this line to report unreported tips from Form 4137 or Form 8919, do not correspond. Delete the amount from line 3 and edit the amount to be included in line 6.

  4. If line 3 is blank and Schedule SE has entries, edit the amount from Schedule SE, line 12 to Part I, line 3. See Figure 3.21.3-26.

    Caution:

    The taxpayers may include separate Schedules SE for the primary and secondary taxpayers. If the return includes two Schedules SE, combine the line 12 amounts and edit the total to Part I, line 3.

    Figure 3.21.3-26

    This is an Image: 34010026.gif

    Please click here for the text description of the image.

Line 4 - Household Employment Taxes (Schedule H or Schedule H (sp))
  1. If an amount is present on line 4 and Schedule H or Schedule H (sp) is not attached, correspond:

    1. For Schedule H if the taxpayer filed Form 1040-SS

    2. For Schedule H (sp) if the taxpayer filed Form 1040-SS (sp)

Line 5 - Additional Medicare Tax (Form 8959)
  1. If an amount is present on line 5, Form 8959 must be attached. If missing, correspond for Form 8959.

Line 6 - Total Tax
  1. Edit line 6 in dollars and cents when adjusting or computing and editing an amount.

  2. Compute and edit line 6 when it is blank, dash, zero, or illegible and there are entries leading to a total.

    Reminder:

    Edit lines 6 through 16 in dollars and cents when adjusting or computing and editing amounts.

  3. If the taxpayer notates, "Tax on Tips," on the line 6 dotted portion, Form 4137 must be attached to support the entry. If missing, correspond for Form 4137.

Line 7 - Estimated Tax Payments
  1. "X" any amount that can be determined to be other than ES tax payments.

Line 8 - Excess Social Security Tax Withheld
  1. Take no action when the amount on line 8 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Correspond when an amount for excess SST is present on line 8 and no Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR is attached.

  3. If line 8 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR is attached, and any single Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR shows Social Security withholding greater than $9,932.40, "X" line 8. Otherwise, take the following steps to verify the line 8 entry using dollars and cents during the computation:

    1. Compute the taxpayer's Social Security tax withheld. If the result is less than $9,932.40, "X" line 8.

      Caution:

      If married filing jointly, DO NOT ADD Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR for primary and secondary taxpayers together.

    2. Subtract $9,932.40 from the Social Security tax withheld. The result is the excess Social Security tax withheld for that taxpayer.

    3. For FS 2, the excess SST amount for each taxpayer is computed separately, and the combined total is compared to the entry on line 8.

    4. If the computed amount differs from the line 8 amount by more than $5.00, "X" line 8, and edit the computed amount in dollars and cents.

Line 9 - Additional Child Tax Credit (TY23 and Later)
  1. "X" the line 9 amount if present and the address on the return is not in Puerto Rico. See Figure 3.21.3-27.

  2. "X" the line 9 amount if present and the taxpayer has not claimed at least 1 qualifying child on Part I, line 2. See IRM 3.21.3.81.3.2.3.

  3. If line 9 is blank, Part II, line 19 has an amount, and the taxpayer qualifies for the Additional Child Tax Credit, edit the Part II, line 19 amount to Part I, line 9.

    Note:

    Do not edit Part I, line 9 if Part II has been "X" -ed.

    Figure 3.21.3-27

    This is an Image: 34010027.gif

    Please click here for the text description of the image.

Line 11a - Credit for Qualified Sick and Family Leave Wages From Schedule(s) H for Leave Taken Before April 1, 2021
  1. For TY23, if line 11a has an amount, then Schedule H must be attached. If missing, correspond for Schedule H.

Line 11b - Credit for Qualified Sick and Family Leave Wages from Schedule(s) H for Leave Taken After March 31, 2021, and Before October 1, 2021
  1. For TY23, if line 11b has an amount, then Schedule H must be attached. If missing, correspond for Schedule H.

Line 12 - Total Payments and Credits
  1. Edit line 12 in dollars and cents when adjusting, or computing and editing amounts.

  2. Compute and edit line 12, by adding lines 7 through 11b, when it’s blank, dash, or zero, and there are entries leading to a total.

  3. Correspond for an explanation when there is an amount on line 12 and lines 7 through 11b are blank.

    Exception:

    Do not correspond if "Form 4868" or an explanation is noted on the dotted portion of line 12.

    Note:

    Do not correspond if Form 8959 is attached to support withholding.

Line 14a - Refund
  1. Compute and edit line 14a, by subtracting line 6 from line 12, when lines 13, 14a, 15, and 16 are all blank, line 12 is greater than line 6, and any of the following conditions are present:

    1. Line 6 has an entry,

    2. The taxpayer has computed or indicated no tax due on line 6, or

    3. It can be determined that line 6 would be zero if computed.

Lines 14b, 14c, and 14d - Direct Deposit Information
  1. For complete instructions, see IRM 3.11.3.

    Note:

    When Form 1040 refers to lines 35b, 35c, and 35d, they are lines 14b, 14c, and 14d on Form 1040-SS.

Line 15 - ES Credit Elect
  1. If lines 13, 14a, and 15 are the same and:

    1. ES Payments (line 7) are claimed, "X" the line 14a entry.

    2. ES Payments (line 7) are not claimed, "X" the line 15 entry.

    Note:

    Take no action when the overpayment (line 13) is divided between lines 14a and 15.

Line 16 - Amount You Owe
  1. Compute and edit line 16, by subtracting line 12 from line 6, when lines 13, 14a, 15, and 16 are all blank, dash, or zero and line 6 is greater than line 12.

Signature
  1. For complete instructions, see IRM 3.11.3.

Identity Protection Personal Identification Numbers (IP PIN)
  1. Identity Protection Personal Identification Number (IP PIN) is located in the "Sign Here" area of the return.

  2. If blank and CP-01A is attached, verify the taxpayer name(s) matches the name(s) on the CP-01A and the tax return. If the name(s) match and the IP PIN on CP-01A is not present on the tax return, edit the IP PIN in the boxes designated for Identity Protection PIN (located below the Daytime phone number box in the signature area of the return).

    Note:

    There may be an IP PIN for both primary and secondary taxpayers; do not circle out. If FS 2 and both spouses have an IP PIN, edit both as necessary.

  3. If the name(s) do not match between an attached CP-01A and the tax return, see Exhibit 3.21.3-1.

  4. Circle IP PIN if it is more or less than 6 numbers.

Paid Preparer Data
  1. Edit the E-File Waiver Indicator to the right of the IP PIN boxes.

  2. For additional instructions, see IRM 3.11.3.

Editing Part II - Bona Fide Residents of Puerto Rico Claiming Additional Child Tax Credit (TY23 and Later)

  1. For TY23 and later, "X" Part II if entries are present, and the address on the return is not in Puerto Rico or the taxpayer did not claim at least 1 qualifying child on Part I, line 2.

    Note:

    "X" Part II even if there is not an amount on Part I, line 9.

Line 3 - Modified Adjusted Gross Income (TY23 and Later)
  1. Reserved

Line 13a - Withheld Social Security, Medicare, and Additional Medicare Taxes (Not Transcribed) (TY23 and Later)
  1. For TY23 and later, if an amount is present on Part II, line 13a and the taxpayer is claiming the Additional Child Tax Credit (ACTC) on Part I, line 9, supporting documentation (Forms 499R-2/W-2PR or leave and earnings statements) must be present. If missing, correspond for documentation.

  2. For TY23 and later, if Part II, line 13a is blank, ACTC is claimed on Part I, line 9, and Forms 499R-2/W-2PR or leave and earnings statement are present, calculate the Part II, line 13a value using the Forms 499R-2/W-2PR or leave and earnings statements by adding all withheld Social Security, Medicare, and Additional Medicare taxes, and then edit or adjust Part II, line 13f.

  3. For TY23 and later, if an amount was already present on Part II, line 13a, verify the amount claimed by adding all withheld Social Security, Medicare, and Additional Medicare taxes from Forms 499R-2/W-2PR or leave and earnings statements:

    1. If the line 13a amount is correct, take no action.

    2. If the line 13a amount is not correct, edit or adjust Part II, line 13f using the correct amount for line 13a.

      Note:

      Allow for rounding by the taxpayer ($2.00 tolerance per Form 499R-2/W-2PR).

    Caution:

    Do not use dollars and cents during the computation.

Line 13f - Total Social Security, Medicare, and Additional Medicare Taxes
  1. Compute and edit line 13f when it is blank, dash, or zero and there are entries on any of lines 13a through 13e.

Schedule C (Sequence 09, 10, 11) - Profit or Loss From Business (TY23 and Later)

  1. The following lines on Schedule C, when attached to a Form 1040-SS, are T-lines and T-Compute lines:

    T-Lines T-Compute Lines
    • Line 1

    • Line 18

    • Line 25

    • Line 26

    There are no T-Compute lines on Schedule C when attached to a Form 1040-SS.

  2. Edit Sequence Code "09" , if not preprinted, in the upper-right margin of the first Schedule C with T-line entries, edit Sequence Code "10" in the upper-right margin of the second Schedule C with T-line entries, and edit Sequence Code "11" in the upper-right margin of the third Schedule C with T-line entries. If there are more than three Schedules C with T-line entries, combine T-line amounts following instructions in IRM 3.11.3.

Schedule F - Profit or Loss From Farming (TY23 and Later)

  1. If attached to a Form 1040-SS, the Schedule F has no T-lines or T-Compute lines.

  2. "X" Schedule F if attached to a Form 1040-SS.

Schedule SE (Sequence 17, 18) - Self-Employment Tax (TY23 and Later)

  1. The following lines on Schedule SE, when attached to a Form 1040-SS, are T-lines and T-Compute lines:

    T-Lines T-Compute Lines
    • Top right margin (Sequence Code 17/18)

    • TIN

    • Line 1a

    • Line 1b

    • Line 2

    • Line 3

    • Right margin of line 4c (SE Quarters Covered)

    • Line 5a

    • Line 8d

    • Bottom-center margin of Page 1 (SE Method Code)

    • Line 3

    • Line 8d

  2. Only two Schedules SE can be processed; one Schedule SE for each of:

    • The primary taxpayer

    • The secondary taxpayer

  3. If the TIN is present but no dollar amounts are present, "X" Schedule SE.

  4. If only one processable Schedule SE is present, edit Sequence Code "17" , if not preprinted.

  5. If two processable Schedules SE are present, one for the primary taxpayer and one for the secondary taxpayer, edit the Sequence Code as follows:

    1. Edit "17" , if not preprinted, for the primary taxpayer.

    2. Edit "18" for the secondary taxpayer.

  6. Take one of the following actions when one Schedule SE was submitted for two taxpayers:

    1. Allocate each taxpayer's Schedule SE amounts to two separate dummy Schedules SE. "X" the Schedule SE with the combined taxpayer liability.

    2. Correspond for the correct allocation when it cannot be determined.

Social Security Number
  1. A TIN must be present if there are significant T-line entries on Schedule SE. If the TIN is missing, illegible, or incomplete, take the following actions:

    1. Edit the TIN from the caption on Form 1040-SS.

    2. If the TIN is not present in the caption, search Form(s) W-2 and other attachments for the missing TIN.

      Note:

      Also, edit the missing TIN to the caption.

  2. If the TIN and name are both missing, edit the primary TIN.

    Note:

    If corresponding for missing signature on a joint return, also request the Social Security Number.

  3. If there are multiple TINs and one name on Schedule SE, circle out the TIN that does not match the name. Use the caption area to determine which TIN should be circled out.

Line 1a - Net Farm Profit or (Loss)
  1. If blank, edit the amount from Schedule F, line 34.

Line 1b - Conservation Reserve Program Payments
  1. If blank, edit the amount from Schedule F, line 4b.

Line 2 - Net Nonfarm Profit or (Loss)
  1. If blank, edit the amount from Schedule C, line 31.

Line 3 - Total Net Profit or (Loss)
  1. Compute and edit line 3 when it is blank, dash, or zero and there are entries leading to a total.

  2. "X" Schedule SE when the amount on line 3 is a negative amount or it is less than $434.

    Exception:

    Do not "X" Schedule SE when line 5a has an entry of $109 or more.

  3. If lines 1a, 1b, 2, and 3 are all blank and you are unable to determine line 3 from attachments, but line 4a has an entry, divide the amount on line 4a by .9235 and edit the result on line 3.

  4. If lines 1a, 1b, 2, 3, and 4a are all blank, but line 4b has an entry, edit line 4b to line 3.

Right Margin of Line 4c - SE Quarters Covered
  1. When the return is for a short year or for a change of accounting period, edit the number of quarters covered in the margin to the right of line 4c, using the following guidelines:

    • The quarters begin in January, April, July, and October.

    • A fraction counts as a full quarter.

    • Code SE quarters as follows - Code 1 for one quarter, - Code 2 for two quarters, - Code 3 for three quarters - DO NOT code for four quarters.

Line 5a - Church Employee Self-Employment Wages
  1. If line 5a has an entry of $109 or more, process regardless of the line 3 amount.

  2. If line 5a is blank and line 5b has an entry, divide the amount on line 5b by .9235, and edit the result on line 5a.

Line 8d - Total Social Security Wages and Tips
  1. If the amount on line 8d is equal to or greater than $160,200 for TY23 and lines 8b and 8c are blank, add applicable taxpayer's Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS wages and tips subject to Social Security tax withholding, and take one of the following actions:

    1. If wages and tips per Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS are less than $160,200 for TY23, edit the total income on line 8d.

    2. If there is no Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS income, lines 8a through 8c are blank, and line 8d is equal to or greater than $160,200 for TY23, "X" line 8d.

    Note:

    For prior year line 8d maximum thresholds, see IRM 3.11.3.

  2. If the amount is equal to or greater than $160,200 for TY23 and line 8b or 8c contains a significant entry, take no action.

  3. Compute and edit line 8d when it is blank, dash, or zero and one of the following conditions is present:

    1. There are entries leading to an amount.

    2. The taxpayer has Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS wages and/or tips subject to Social Security tax withholding.

    Note:

    Only edit the amounts from the "Social security wages" box and/or the "Social security tips" box if there is also an amount in the box for "Social Security tax withheld" .

Bottom-Center Margin - SE Method Code
  1. Edit the SE Method Code to the bottom-center margin of Schedule SE, Page 1.

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Schedule SE, line 15 and/or Schedule SE, line 17 are misplaced.

  2. Edit SE Method Code "1" when both of the following conditions are present:

    • Schedule SE, line 15 is blank or zero, and

    • Schedule SE, line 4b and Schedule SE, line 17 have significant amounts that are equal.

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Schedule SE, line 15 and/or Schedule SE, line 17 are misplaced.

  3. Edit SE Method Code "2" when both of the following conditions are present:

    • There is a significant entry on either Schedule SE, line 15 or Schedule SE, line 17, and

    • SE Method Code "1" has not been assigned.

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Schedule SE, line 15 and/or Schedule SE, line 17 are misplaced.

Forms and Schedules that are Allowed to be Attached to Form 1040-SS

  1. The following forms and schedules are the only transcribed forms and schedules that can be attached to Form 1040-SS:

    • Form 8867

    • Form 8888

    • Form 8919

    • Form 8959

    • Form 9000 (TY21 and later)

    • Schedule C

    • Schedule H

    • Schedule H (sp)

    • Schedule LEP (TY19 and later)

    • Schedule SE

  2. If any other forms or schedules are attached, they must be "X" -ed or moved behind the last transcribable form.

Form 1040-NR and Form 1040-NR-EZ - General Instructions

  1. Forms 1040-NR are filed by:

    Reminder:

    Convert all Forms 1040-NR-EZ to Forms 1040-NR.

    1. Nonresident aliens who have United States source income or income effectively connected with a U.S. trade or business

    2. Nonresident aliens who are temporarily present in the United States

    3. Dual-status taxpayers in the year of entry into (as a dual-status statement) or departure from the U.S.

      Note:

      If there is an indication that the taxpayer is a Dual Status filer, follow instructions for Dual Status Returns. See IRM 3.21.3.85.1.

    4. Dual-status taxpayers in the year that status changed due to expatriation

  2. All Forms 1040-NR and Forms 1040-NR-EZ are processed under FLC 20.

  3. See table below to determine Document Code and Return Due Date:

    Form Filed Criteria Document Code Return Due Date Program
    Form 1040-NR Wages on line 1a 73 04/15/2024 46120, 46160
    Form 1040-NR No Wages 72 06/17/2024 46140, 46180

Form 1040-NR - Special Procedures

  1. If the taxpayer indicates that they were a resident in the U.S. all year, review the complete return and attachments for additional information explaining the taxpayer's claim of continuing nonresident alien status. If attachments do not verify continuing non-residency, correspond for filer's U.S. Status. When corresponding, use Form 9143 with the following literal: If you are a U.S. Citizen or U.S. Resident, you must file Form 1040 and report worldwide income. Please complete, sign and return a Form 1040 after attaching all necessary forms, schedules and federal income tax withholding statements.

    Exception:

    Do not correspond when the taxpayer is an employee of a foreign government or holds an "F" , "J" , "M" , or "Q" visa. But see IRM 3.21.3.3.2 to verify that the taxpayer continues to be an exempt individual under the substantial presence test. For example, a taxpayer temporarily present in the United States on a J visa is an exempt individual for only 2 out of 6 years and a student temporarily present in the United States on a F visa is an exempt individual for only 5 years.

  2. All amounts are to be reported in U.S. currency ONLY. If amounts are reported in foreign currency, give the return to the workleader. The workleader will convert any amounts reported in foreign currency to U.S. dollars using the web address, https://fiscaldata.treasury.gov/datasets/treasury-reporting-rates-exchange/treasury-reporting-rates-of-exchange, and using the December rates for the tax year of the return.

  3. Edit FPC "S" if Schedule SE is attached or the taxpayer includes an entry on Schedule 2, line 4.

  4. If Form 1040-NR, line 1b has an entry, edit SPC "E" .

  5. Edit CCC "C" when Form 8833 is attached to Form 1040-NR.

  6. When Form 1042-S with Exemption Code 2 (exempt under an Internal Revenue Code section) is filed on Form 1040-NR:

    If Then
    Taxpayer has not entered income or exclusion Take no action.
    Taxpayer shows the amount as income and exclusion or as a tax treaty on page 1 "X" entries where found.
    Taxpayer reported gross income and excluded withholding allowance "X" those amounts wherever found and accept the net income where reported.
    If the taxpayer reports all or part of net income as taxable income Accept the taxpayer's amount on the appropriate line.
    Prepared by USAID

    Note:

    The return may be stamped Treasury Regulation 1.6012-1(b)(3), USAID/G/HCD/POSS/TAX.

    1. Accept the return as filed,

    2. Verify the Form 1042-S for the taxpayer's name, Taxpayer Identification Number (TIN), and withholding only, and

    3. DO NOT "X" out entries in accordance with normal Exemption Code 2 procedures.

  7. When Form 1042-S with Exemption Code 4 (exempt under a tax treaty) is filed on Form 1040-NR:

    If Then
    Taxpayer has entered a valid tax treaty article on Schedule OI, and reported the exempt income on line 1k Take no action.
    Taxpayer has identified a valid treaty and has included the exempt amount as taxable income (e.g., line 1a) and has not included or deducted it elsewhere on the return
    1. "X" the entry,

    2. Adjust line 1a or wherever found to exclude the exempt income, and

    3. Edit exempt amount to line 1k.

    Taxpayer did not identify a valid article number Correspond.

    Exception:

    Do not correspond for a missing article number when Income Code 16 (Income Code 15 for TY14 and prior) AND Exemption Code 4 are present AND any of the following conditions apply:
    • Form 1042-S was issued by a college/university, or
    • it is a zero-balance return, or
    • Form 1042-S has no withholding.

  8. Certain situations will require special editing procedures. The special situations in this section include:

    • Employees of International Organizations and Foreign Governments

    • Government Service Employees

    • IRC 872

    • Commuters from Canada or Mexico

    • Article XXV, U.S. – Canada Income Tax Treaty

    • Form 1040-NR/Form 1040-NR-EZ – Manual Refund Procedures

    • Tax Treaty – General Information

    • Exclusion(s) Due to Tax Treaties

    • Expatriation Returns

    • Exchange Visitor Program

    • Form 1040-NR or Form 1040-NR-EZ Decedent Returns

    • Social Security/Railroad Retirement Benefits

    • Other Retirement Benefits Withholding: Survivor Benefit Annuities (SBAs)/Survivor Benefit Plans (SBPs)

    • Tie-Breaker

    • Form 1040-NR with Address or Income from Guam

    • Protective Claims

    • Norway Treaty

    • Estate or Trust Returns

Employees of International Organizations and Foreign Governments

  1. Nonresident aliens who work in the United States for certain international organizations (e.g., certain United Nations organizations, International Bank for Reconstruction and Development, and International Monetary Fund (IMF)) or for foreign governments may exempt income earned in the U.S. from U.S. taxation under IRC 893 when they file their U.S. individual tax returns.

  2. Employees of an international organization claiming exemption should know the number of the Executive Order covering their organization and should have some written evidence of their acceptance or designation by the Secretary of State.

    1. If claimed on Form 1040-NR, see IRM 3.21.3.84.19.8.

Government Service Employees

  1. The individuals claiming this treaty article will be filing Form 1040-NR and will hold A-1 or A-2 visas. Refer to Exhibit 3.21.3-14 for a list of countries that will help determine if the claim is valid. See IRM 3.21.3.84.19.8 for additional information.

    Example:

    Article 19 from Australia is a valid treaty on Form 1040-NR. If a taxpayer claims this article, allow the claim.

IRC 872

  1. Under IRC 872(b)(3), compensation paid by a foreign employer to a nonresident alien individual present in the United States on an "F" , "J" , or "Q" visa while participating in certain exchange or training programs is exempt from tax. A "foreign employer" includes nonresident alien individual, foreign partnership, or foreign corporation, or an office or place of business maintained in a foreign country or in a territory of the United States by a domestic corporation, a domestic partnership, or an individual who is a citizen or resident of the United States.

Commuters from Canada or Mexico

  1. If a taxpayer from Canada or Mexico indicates that they are a "commuter" (travels daily from their home in Canada or Mexico to a work location in the U.S.), they:

    • Are not considered present in the United States for purposes of the substantial presence test. See IRM 3.21.3.3.2 for more information.

    • Are treated as a nonresident alien for U.S. tax purposes, if they do not meet the substantial presence test.

    • Must file Form 1040-NR or Form 1040-NR-EZ to report their U.S. income.

Article XXV, U.S. - Canada Income Tax Treaty

  1. When a Form 1040-NR is received from a Canadian citizen/resident who has income from U.S. sources, they may be computing their U.S. tax liability in accordance with the special provisions of the tax treaty between the United States and Canada which allows married Canadian citizens/residents to figure the U.S. tax liability using joint (Married Filing Joint) tax rates.

    Caution:

    Article XXV is usually filed with both Form 1040-NR and Form 1040; do not process as a Dual Status return.

    Note:

    Do not code for a single or head of household taxpayer.

  2. The following are indications that can help identify Canadian taxpayers claiming "Article XXV" :

    1. Two names are entered in the caption area of the return,

    2. Hypothetical married filing joint tax computation using worldwide income for both taxpayers (Form 1040 or statement),

    3. A statement is attached indicating that a special computation permitted by the U.S.-Canada Tax Treaty has been used,

    4. A notation of "Article XXV" is found on the return or its attachments.

  3. When this condition is recognized on a Form 1040-NR refund return:

    1. Edit the name of the secondary taxpayer to the additional information line,

    2. Edit CCC "Y" ,

    3. Edit an Action Trail, and

    4. "X" Form 1040.

Form 1040-NR - Manual Refund Procedures

  1. On a refund return when the nonresident has an address on Form 1040-NR, Page 2, line 35e that differs from the caption address and at least one is foreign, edit CCC "Y" and an action trail of "Manual Refund." See Figure 3.21.3-28.

  2. If a foreign address is present in the Form 1040-NR caption, and a name is present or has been edited as a second AIL, underline both. Then take the following actions for REFUND returns:

    1. For Decedent Returns - Do not edit CCC "L" or CCC "W" .

    2. Edit CCC "Y" and an action trail of "Manual Refund" .

    Exception:

    Do not edit CCC "Y" if CCC "3" has been edited. If taxpayer has elected to use Direct Deposit or has been issued an IRS Number (IRSN), do not edit CCC "Y" . An IRSN can be identified when the middle two digits are not 50-65, 70 - 88, or 90-99, and the number starts with a 9.

    Figure 3.21.3-28

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Tax Treaty - General Information

  1. The United States has income tax treaties with a number of countries. Under these treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. income taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income.

    Note:

    An individual is a "resident" of a foreign country under an income tax treaty if they are treated as a resident under the domestic laws of that country for income tax purposes. Certain treaties provide that citizenship alone is not sufficient to establish "residency" in either the U.S. or the other country for purposes of the treaty and impose additional requirements, such as physical presence within the country, for establishing residency.

  2. Tax treaties reduce the U.S. taxes of residents of foreign countries. With certain exceptions, they do not reduce the U.S. taxes of U.S. citizens or residents. U.S. citizens and residents are subject to U.S. income tax on their worldwide income.

Exclusion(s) Due to Tax Treaties
  1. If the taxpayer claims an exclusion of income or exemption from tax due to a treaty, a valid treaty article number must be identified. Verify the validity of the tax treaty exemption claimed using Exhibit 3.21.3-10. Do not accept Exemption Code "4" on Form 1042-S as a valid tax treaty exemption. Treaty country and specific treaty benefits claimed must be verified.

    Exception:

    Do not correspond for a missing article number when Income Code 16 (Income Code 15 for TY14 and prior) AND Exemption Code 4 are present AND any of the following conditions apply:
    - Form 1042-S was issued by a college or university, or
    - It is a zero-balance return, or
    - Form 1042-S shows no withholding.

    Note:

    When determining if a taxpayer is a resident of Canada, do not use the address in the caption. The country should be determined by Schedule OI, questions A and/or B, or Form 1040-NR-EZ, page 2.

  2. If the taxpayer includes a copy of a letter from the U.S. Competent Authority or from a foreign competent authority for the taxpayer's country of residence that says the income the taxpayer is excluding under the treaty is taxable only in the foreign country, allow the exclusion.

  3. Tax treaty country and article are found on the treaty table located at Exhibit 3.21.3-10. The following footnotes must be used when determining if a taxpayer is eligible for the benefits of that treaty. If the amount is exceeded per the footnote, "X" the treaty amount claimed.

    Footnote Explanation
    25 Exemption does not apply if gross receipts (including reimbursements) exceed this amount.
    26 Exemption does not apply if net income exceeds this amount.
    28 Exemption does not apply if compensation (or gross income from the Philippines and Romania) exceeds this amount.
    46 Exemption does not apply if gross receipts exceed this amount.

Expatriation Returns

  1. Taxpayers that are subject to expatriation tax must attach Form 8854, Initial and Annual Expatriation Statement, to their 1040-NR for the year of expatriation. Taxpayers may elect to defer all or a portion of the expatriation tax. Taxpayers making this election must file Form 8854 annually up to and including the year in which the full amount of deferred tax and interest are paid.

  2. If Form 8854 is attached:

    • If unnumbered return and there is no LB&I stamp indicating LB&I reviewed the return, stop coding, and route the entire return to Stop 4301 AUSC.

    • If unnumbered return and there is an LB&I stamp indicating LB&I reviewed the return, edit Audit Code "K," and continue processing as normal.

    • If numbered return, edit Audit Code "K," and continue processing as normal.

Exchange Visitor Program

  1. Foreign nationals with J-1 Visas are temporarily in the U.S. as part of the Exchange Visitor Program for a period of a few weeks to several years. There are many program categories within the Exchange Visitor Program including programs for individuals in the U.S. for the primary purpose of participating in programs for study, training, teaching or research. These J-1 visa program participants may be eligible for the treaty benefits of these categories of personal services.

  2. Individuals participating in the Private Sector Programs Division in the Camp Counselor and Summer Work/Travel categories are foreign students who are in the U.S. to work temporary, seasonal-type jobs during school vacations for a period not to exceed 4 months. These J-1 visa program participants are not eligible for benefits under a treaty article (Students, Trainees, Teachers and Researchers) for the income they earn while performing services in the United States. In addition, these individuals are not eligible to deduct their travel expenses to the United States as employee business expenses on Schedule A. To determine if the taxpayer is part of the Camp Counselor and Summer Work/Travel categories, use the information below:

    1. Wages from summer-type seasonal work (e.g., retail, casinos, resorts, or restaurants)

    2. Number of days present in the U.S. of 4 months or less (see Schedule OI, line H)

  3. If the taxpayer meets the criteria above and is claiming a tax treaty for studying, training, teaching, or research from their country, take the following actions:

    1. "X" the treaty exclusion amount wherever it is reported.

    2. Edit the income on the appropriate line of Form 1040-NR.

    Note:

    The taxpayer may identify themselves as a "Cultural Exchange Participant" or Service Provider.

Form 1040-NR or Form 1040-NR-EZ Decedent Returns

  1. For complete instructions, see IRM 3.21.3.10.

    Note:

    See Figure 3.21.3-29 showing the correct way to code a decedent AIL along with a foreign address.

    Figure 3.21.3-29

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Social Security/Railroad Retirement Benefits

  1. Follow the instructions below when Form 1040-NR is filed with Form SSA-1042S or Form RRB-1042S.

    Note:

    Do not confuse Form SSA-1099, Form RRB-1099, or Form 1042-S with Form SSA-1042S or Form RRB-1042S.

  2. A nonresident alien is taxed at 30% on 85% of their Social Security/Railroad Retirement Benefits income, unless exempt by a tax treaty. The following are the only countries whose residents are exempt from U.S. tax on their Social Security/Railroad Retirement Benefits income:

    1. Canada

    2. Egypt

    3. Germany

    4. India (exempts only the portion of benefits that is based on earnings from U.S. Federal, State or local government employment for an individual who is both a resident and national of India)

    5. Ireland

    6. Israel

    7. Italy

    8. Japan

    9. Romania

    10. United Kingdom (includes Great Britain, England, Northern Ireland, Scotland, and Wales)

    Exception:

    Residents of Switzerland are taxed at 15% on 85% of their Social Security/Railroad Retirement Benefits income.

  3. If the taxpayer is not a resident of one of the exempt countries, multiply the total Social Security/Railroad Retirement Benefits income by .85, multiply that amount by .30, and then edit the calculated tax result to be included on line 23a.

    Exception:

    For residents of Switzerland, multiply the total Social Security/Railroad Retirement Benefits income by .85, multiply that amount by .15, and then edit the calculated tax result to be included on line 23a.

Other Retirement Withholding: Survivor Benefit Annuities (SBAs)/Survivor Benefit Plans (SBPs)

  1. A member of the United States military reaching retirement age may elect to receive, during their lifetime, a reduced United States military pension in order that their surviving spouse may continue to draw a United States military pension after their death. After the death of the United States military retiree, the pension which is paid to the retiree's surviving spouse is called a "Survivor Benefit Annuity" (SBA) or a "Survivor Benefit Plan" (SBP).

    Note:

    Form 1042-S with Income Code 15 (Income Code 14 for TY14 and prior) from Office of Personnel Management U.S. tax law holds these benefits to be U.S. source taxable income. Unless United States tax law is overridden by a tax treaty between the United States and the country in which the NRA recipient is a resident.

  2. SBAs/SBPs paid to a nonresident alien who is a resident in one of the following countries are not subject to U.S. tax under current treaties, provided they meet any requirements listed below or, if the country is marked with an asterisk (*), they are a national of the country in which they are a resident:

    Country Country
    Australia Lithuania*
    Austria Luxembourg*
    Bangladesh* Malta*
    Barbados Mexico*
    Belgium* Morocco*
    Bulgaria* Netherlands*
    China* New Zealand (must also be a citizen of New Zealand)
    Cyprus* Norway
    Czech Republic (decedent must have been a resident of Czech Republic) Pakistan
    Denmark* Portugal*
    Egypt Romania
    Estonia* Russia/Russian Federation (must also be a citizen of Russia)
    Finland* Slovak Republic/Slovakia (decedent must have been a resident of Slovak Republic)
    Germany* Slovenia*
    Hungary* South Africa*
    Iceland* Spain*
    India* Sri Lanka
    Ireland* Sweden (must also be a citizen of Sweden)
    Israel Switzerland*
    Italy* Thailand*
    Jamaica* (decedent must have been a national of Jamaica at the time the services were rendered) Tunisia
    Japan* Turkey*
    Kazakhstan (must also be a citizen of Kazakhstan) United Kingdom*
    (includes notations of Great Britain, England, Northern Ireland, Scotland, and Wales)
    Korea (South) Venezuela*
    Latvia*  

  3. SBAs/SBPs paid to residents and citizens of the following countries are taxable in the United States at the following tax rates under current tax treaties (or in the absence of a treaty):

    Country Tax Rate
    Canada 15%
    All other countries (no tax treaty) 30%

Tie-Breaker

  1. If the taxpayer claims residency using the "Tie-Breaker Rule," use the same criteria to validate the treaty. See IRM 3.21.3.84.8.6.

    Note:

    Article IV is not a valid article to exempt income under when citing Tie-breaker.

  2. A taxpayer cannot claim an Article pertaining to "Tie-breaker," such as Article IV or Article 4, to exclude U.S. source income since "Tie-breaker" articles only pertain to residency. However, if a taxpayer is excluding non-U.S. source income claiming only Article IV or Article 4, the exclusion is allowable since non-U.S. source income is not taxable. Follow the taxpayer’s intent if they report and subsequently exclude non-U.S. source income from their return.

    Note:

    If the taxpayer is claiming "Tie-breaker" Article to exclude U.S. source income, edit the excluded U.S. source income back into line 1a.

  3. If the taxpayer is claiming non U.S. source income on line 1k, "X" the entry.

  4. If the income made by the taxpayer is not U.S. sourced, no tax is assessed and the taxpayer receives all their withholding.

  5. The taxpayer may file a Form 1040-NR with a U.S. address when using the tie-breaker rule.

  6. If the taxpayer is using Article IV or Article 4 to exempt U.S. source income, "X" line 1k and ensure the income is reported on Form 1040-NR, lines 1a through 7, or Schedule 1, lines 1 through 7 or 9. If the source of income is not specified, "X" line 1k and edit the amount to line Form 1040-NR, lines 1a through 7, or Schedule 1, lines 1 through 7 or 9.

    Note:

    U.S. sourced income is reported on Form W-2, Form 1042-S, Form SSA-1042S, Form RRB-1042S, Form 1099 Series, Form 8805, Form 8288-A, or a statement of income.

Form 1040-NR with Address or Income from Guam

  1. If Guam is shown on Schedule OI, question B and the return is:

    1. Unnumbered, place it in the designated bin in unit for transshipping back to Guam (see IRM 3.21.3.77.1.1 for transshipping procedures).

    2. Numbered, edit Action Code "640" and attach Form 4227 notating "Delete DLN and transship back to Guam."

  2. If the address shown on Schedule OI, question B is other than the U.S. or Guam, correspond for place of residence.

  3. If the country on Form W-2 is Guam and copy "C" of the W-2 is attached:

    1. Edit Action Code "332."

    2. Attach Form 4227 notating "Guam W-2 "C" Copy" .

Protective Claims

  1. Returns marked as "Protective Claim," "Protective Refund," "Protective Claim for Refund," or similar statement will be removed from the batch and routed to Accounts Management. Notate "Protective Claim" in the remarks box of Form 4227.

    Exception:

    If the return is amended, do not remove from the batch. Edit CCC "G" and continue processing.

Norway Treaty

  1. Accept all returns as valid when the taxpayer is claiming Article 4A (Offshore Activities) for Norway.

Estate or Trust Returns

  1. Estate or Trust returns may be identified by one of the following indications:

    1. The Primary Taxpayer Identification Number (P-TIN) is an EIN rather than an SSN.

    2. The name line has the name of other than an individual (such as an estate or trust).

    3. The Estate or Trust box is checked on Form 1040-NR.

    4. The entry on Form 1040-NR, line 13b is $600 (Estate), $300 (Trust), or $100 (Trust).

    5. The taxpayer quotes IRC 642(b)(2)(C) claiming $4,700 on line 13b.

  2. Take the following action on a Form 1040-NR/Form 1040-NR-EZ estate or trust return:

    1. If numbered, edit Action Code "640," or

    2. If unnumbered, notate on Form 4227, "re-sort as NMF," and transship to Kansas City Service Center (KCSC).

Form 1040-NR and Form 1040-NR-EZ General Editing Instructions

  1. In addition to the following subsections, see IRM 3.21.3.4 through IRM 3.21.3.12.

  2. All Form 1040-NR-EZ must be converted to Form 1040-NR. See IRM 3.21.3.86.16 for conversion instructions.

  3. Form 1040-NR, pages 3 through 5, have been updated to separate schedules beginning in TY20.

    Note:

    The instructions below also apply when processing prior year Form 1040-NR.

    1. Treat Schedule A (Sequence 7A), Schedule NEC (Sequence 7B), and Schedule OI (Sequence 7C) as pages 1, 2, and 3 of Sequence 07 when ordering the return.

  4. Arrange Schedules 1 through 3 in sequential order behind Form 1040-NR. When processing Form 1040-NR, keep Schedule A, Schedule NEC, and Schedule OI together as page 1, page 2, and page 3 of Sequence 07.

    Exception:

    When a transcribed form or schedule is found on the back side of Form 1040-NR, it is not necessary to photocopy and move behind Schedules 1-3.

Tax Period

  1. If the beginning and ending dates above the caption area are the same dates as Schedule OI, question G or Form 1040-NR-EZ, page 2 (question G), process the return as a full calendar year return.

  2. Taxpayers are allowed to file a return for fewer than 12 months only under one of the following conditions:

    1. An application or authority to file a short period return has been approved by the IRS (Form 1128).

    2. The return is filed under Section 1.442-1(e) of IRS Regulations.

    3. The return is filed under Section 1398 (Bankruptcy) Election or Second Short Year after the Section 1398 Election.

    4. The taxpayer dies during the current processing year and is filing to date of death. (See decedent return editing instructions in IRM 3.11.3.)

    5. The return is the final return for the taxpayer.

  3. Correspond for an explanation of the taxpayer's authority to file a short period return when the beginning and ending dates above the caption area are different from Schedule OI, question G or Form 1040-NR-EZ, page 2 (question G) and none of the conditions in IRM 3.21.3.84.1 (2) apply:

    1. Correspond by preparing Form 3696-A to send the taxpayer a 319C letter.

    2. Edit Action Code "215" .

  4. Short Period returns require the following additional editing:

    1. Edit CCC "Y" and an Action Trail.

    2. Edit the ending date of the tax period, using "YYMM" format.

    3. Edit the received date when one is not already present.

  5. For additional instructions, see IRM 3.21.3.11.

Form 1040-NR (T-Lines/T-Compute Lines)

  1. In TY20 and later, 1040-NR may be filed with Schedule 1, Schedule 2, and Schedule 3 as supporting documents. Schedules which were previously pages 3 through 5 of Form 1040-NR have been assigned individual sequence numbers:

    • Sequence 7A - Schedule A, 1040-NR

    • Sequence 7B - Schedule NEC, 1040-NR

    • Sequence 7C - Schedule OI, 1040-NR

  2. Convert all Form 1040-NR-EZ to Form 1040-NR. For conversion instructions, see IRM 3.21.3.86.16.

  3. The following are the T-lines and T-Compute lines for page 1 and page 2 of Form 1040-NR:

    T-Lines T-Compute Lines
    • Tax Period

    • Filing Status Code - Area to the left of the single box.

    • Taxpayer Name

    • TIN

    • Additional Information Line

    • Street Address

    • City/State/Province

    • Mail Routing Code

    • Country Name

    • Special Processing Code (SPC) - Right margin between Identifying Number and Individual/Estate or Trust check boxes

    • Country Code - Right margin across from the City, town or post office, state and ZIP code

    • Computer Condition Code (CCC) - center of the blank space above the "Dependents" section.

    • Received Date - edit in the empty space to the right of "Dependents (see instructions):"

    • Dependent's Name - Dependent lines, column (1)

    • Dependent's TIN -Dependent lines, column (2)

    • Child Tax Credit Indicator - Dependent lines, column (4)

    • Credit for Other Dependents Indicator - Dependent lines, column (4)

    • Dependent Positions

    • Line 1a

    • Line 1k

    • Line 1z

    • Lines 2a through 5b

    • Lines 7 through 9

    • Form Processing Code (FPC) - To the right of line 7

    • Line 10

    • Line 10c (TY21 and prior)

    • Line 11

    • Line 12b (TY20 and TY21 only)

    • Line 13a

    • Line 15

    • Return Processing Code (RPC) - Left bottom margin

    • Action Code - Bottom-Center Margin

    • Audit Code - Bottom-Right Margin

    • Line 16

    • Line 19

    • Line 21

    • Lines 23a through 23c

    • Line 24

    • Lines 25d through 26

    • Dotted Portion of Line 28 (TY19 and TY20 only)

    • Lines 28 and 29

    • Lines 32 and 33

    • Line 35a

    • Line 35b - Routing Number

    • Line 35c - Checking and Savings Boxes

    • Line 35d - Account Number

    • Line 36 through 38

    • Third Party Designee Checkbox

    • Third Party Designee Name

    • Third Party Designee PIN

    • IP PIN

    • Preparer SSN or PTIN

    • Preparer EIN

    • Preparer Phone Number

    • Preparer Code

    • Line 1z

    • Line 9

    • Line 11

    • Line 15

    • Line 21

    • Line 24

    • Line 25d

    • Line 32

    • Line 33

    • Line 35a

    • Line 37

Taxpayer Identification Information

  1. Instruction and information in this subsection include:

    1. Caption Information

    2. Taxpayer Identification Number

    3. Name and Additional Information Line

    4. Mailing Address

    5. Filing Status

Taxpayer Identification Number
  1. For complete instructions, see IRM 3.21.3.12.2.

Primary Taxpayer Identification Number (P-TIN)
  1. If an EIN (format 00-0000000) is used instead of a TIN (format 000-00-0000), the return should be considered a fiduciary return. Take the following actions on a Form 1040-NR or Form 1040-NR-EZ fiduciary return:

    1. If numbered, edit Action Code "640" .

    2. If unnumbered, notate on Form 4227 "re-sort as NMF" and transship to Kansas City Service Center (KCSC).

      Exception:

      If an EIN is used and there is no indication of Estate or Trust, examine the Employer Identification Number on Form W-2 and Withholding Agent's identification number on Form 8805, Form 8288-A, or Form 1042-S. If the number matches the EIN in the caption, circle the EIN in the caption, and continue processing.

  2. For additional instructions, see IRM 3.21.3.12.2.1.

Name and Additional Information Line

  1. For complete instructions, see IRM 3.21.3.12.3.

Name Line
  1. Only one name is allowed.

    Reminder:

    If two names appear on the name line, this could be an indication of Article XXV (see IRM 3.21.3.83.5).

  2. If two names are present and only one income, circle out the name and TIN (if present) of the taxpayer with no income.

  3. If two names are present and both have income, correspond for separate Forms 1040-NR.

  4. For additional instructions, see IRM 3.21.3.12.3.1.

Country Name

  1. For complete instructions, see IRM 3.21.3.12.6.

Perfecting Form 1040-NR Country Codes
  1. The Country Code is a two-alpha character that is designed to identify treaty countries whose residents are entitled to refunds of U.S. Withholding on U.S. source income.

  2. Edit the appropriate two-alpha character Country Code in the right margin to the right of the "City, town, or post office, state, and ZIP code" line. See Exhibit 3.21.3-7 and Figure 3.21.3-30.

    Figure 3.21.3-30

    This is an Image: 34010030.gif

    Please click here for the text description of the image.

  3. Examine Form 1040-NR or Form 1040-NR-EZ to determine the country in which the taxpayer was a permanent resident. Use the priority listing below to determine the country code:

    1. Schedule OI, line B (Form 1040-NR-EZ, page 2, line B) (See Figure 3.21.3-31.)

    2. Schedule OI, line A (Form 1040-NR-EZ, page 2, line A)

    3. Address in the caption area of Form 1040-NR or Form 1040-NR-EZ (See Figure 3.21.3-30.)

      Exception:

      "Bulk/clean" filed Form 1040-NR or Form 1040-NR-EZ and Form 8822 is attached, use the country of the taxpayer’s old address.

    4. Review any attachments

      Note:

      If multiple countries are present in a location above as you go through the priority list, edit the first with a listed country code.

  4. Edit Country Code "XX" (see Figure 3.21.3-32) if:

    • The country in which the taxpayer was a permanent resident cannot be determined

    • The country in which the taxpayer was a permanent resident is not listed in Exhibit 3.21.3-7

    • Only a U.S. address is listed on Form 1040-NR (including attachments)

    Caution:

    Treat all Form 1040-NR returns as frivolous when the taxpayer indicates that they live in the "Republic of ..." and the country is one of the U.S. 50 states.

    Figure 3.21.3-31

    This is an Image: 34010031.gif

    Please click here for the text description of the image.

    Figure 3.21.3-32

    This is an Image: 34010032.gif

    Please click here for the text description of the image.

Filing Status Code (FSC)

  1. A Filing Status Code must be edited on Form 1040-NR and is edited to the left of the "Single" filing status box.

  2. For every Form 1040-NR return, edit a Filing Status Code of "1" , "3" , or "5" .

  3. Edit the Filing Status Code (FSC) using the table below:

    FS Box Marked And Then
    Single   Edit FSC "1" .
    Married filing separately (MFS)   Edit FSC "3" .
    Qualifying surviving spouse (QSS) Both of the following conditions are present:
    • No spousal date of death, or date of death was within the two years before the tax year of the return, AND

    • Based on edited Country Code, taxpayer is a resident of Canada, Mexico, or South Korea, or is a student or business apprentice from India

    Edit FSC "5" .
    Qualifying surviving spouse (QSS) Any of the following conditions is present:
    • Spousal date of death was more than two years before the tax year of the return,

    • Spousal date of death was within the tax year of the return,

    • Spousal date of death was after the tax year of the return, OR

    • Based on edited Country Code, taxpayer is not a resident of Canada, Mexico, or South Korea, and is not a student or business apprentice from India

    Edit FSC "1" .
    All boxes marked or no boxes marked Spouse is not listed Edit FSC "1" .
    All boxes marked or no boxes marked Spouse is listed Edit FSC "3" .

  4. Edit CCC "Q" when the filing status is 4 or 5, there are no dependents listed on the return, and a qualifying non-dependent is listed:

    • In the filing status section of the return,

    • On Form 2441, or

    • On Form 8814.

Dependents

  1. For complete instructions, see IRM 3.11.3.

Dependent's Name Control and TIN
  1. For Form 1040-NR, up to four allowable dependents’ name controls and TINs can be transcribed.

  2. Dependents are restricted by country of residence. To determine if dependents are allowed, see the table below:

    Country of Residence Children* Other Dependents*
    Canada Yes Yes
    Mexico Yes Yes
    India (Students and business apprentices only)

    Note:

    Use the occupation area, Schedule OI, Form 8843, attachments, and/or Form 1040-NR-EZ, page 2 to make a determination.

    Yes Yes
    South Korea Yes, if lived with parents in U.S. No
    U.S. Nationals (regardless of country of residence) Yes Yes
    All Other Countries No No

    * See IRM 3.11.3.13.1.1.

  3. Every allowable dependent must have a name control and TIN.

  4. Edit an "X" to the left of the name of any dependent that does not qualify based on the country of residence. See IRM 3.21.3.84.7.1 (2) above.

  5. If the spouse’s name is present in the Dependents area, edit an "X" to the left of the name.

  6. All other countries are not allowed to claim dependents. If a dependent is claimed, edit an "X" to the left of the name in the Dependents area.

  7. For additional instructions, see IRM 3.11.3.13.1 through 3.11.3.13.2.2.

Income Effectively Connected with U.S. Trade/Business - Lines 1a through 9

  1. The following subsections contain information pertaining to perfection of lines 1a through 9 on Form 1040-NR.

  2. Edit amounts on lines 1a through 9 in dollars only.

Line 1a - Total Amount from Form(s) W-2, Box 1
  1. Use the table below for situations that require or may require editing income to Form 1040-NR, line 1a:

    If And Then
    Line 1a is blank Form(s) W-2 are attached Edit total wages from all box(es) 1 of Form(s) W-2 to line 1a, and delete if found elsewhere.

    Note:

    Do not include income excluded by a valid tax treaty.

    Exception:

    Leave the income if found on Schedule C if the taxpayer is a minister or the statutory employee box is checked on Schedule C.

    Form W-2 income is reported It is reported anywhere besides line 1a (e.g., Schedule C) Delete the income where found, and edit to line 1a.

    Exception:

    Leave the income if found on Schedule C if the taxpayer is a minister or the statutory employee box is checked on Schedule C.

    Form 1042-S is attached BOTH of the following apply:
    • Income has not been reported on Form 1040-NR, page 1, Schedule 1, page 1, or Schedule NEC, and

    • Income should be reported on Form 1040-NR, page 1, Schedule 1, page 1, or Schedule NEC

    Note:

    Use Exhibit 3.21.3-2, Form 1042-S Income Codes, to determine if and where income should be reported.

    Edit the income to the appropriate line.

    Note:

    If the income can be reported on either Form 1040-NR, page 1 or Schedule 1, page 1, AND Schedule NEC, Schedule NEC will take priority. See IRM 3.21.3.84.12.1.

    Sick Pay is reported It is reported anywhere besides line 1a Delete the income where found, and edit to line 1a.
    Strike Pay/Benefits are reported They are reported anywhere besides line 1a Delete the income where found, and edit to line 1a.

  2. Use the table below for editing misplaced income to lines other than Form 1040-NR, line 1a:

    If And Then
    Disability Pension income is reported as indicated by:
    • Form 1099-R with distribution code 3 in box 7,

    • Notation on Form 1099-R, or

    • Any other indication that disability pension is included on the return

    It is reported anywhere other than line 1h, 4a, or 4b
    1. If there is a statement indicating treatment as a retirement pension, delete where found and edit to line 5b, if not already reported there.

      Note:

      If Disability Pension is identified on line 5a or 5b, take no action.

    2. Otherwise, delete where found and edit to line 1z.

    Form 1042-S, Pension income with Income Code 15 (Income Code 14 for TY14 and prior), is reported It is reported anywhere other than on Schedule NEC Delete where found, and see Schedule NEC instructions at IRM 3.21.3.84.23.
    Form 1042-S is attached BOTH of the following apply:
    • Income has not been reported on Form 1040-NR, page 1, Schedule 1, page 1, or Schedule NEC, and

    • Income should be reported on Form 1040-NR, page 1, Schedule 1, page 1, or Schedule NEC

    Note:

    Use Exhibit 3.21.3-2, Form 1042-S Income Codes, to determine if and where income should be reported.

    Edit the income to the appropriate line.

    Note:

    If the income can be reported on either Form 1040-NR, page 1 or Schedule 1, page 1, AND Schedule NEC, Schedule NEC will take priority. See IRM 3.21.3.84.12.1.

    Gambling income is reported It is reported anywhere other than on Schedule NEC Delete where found, and see IRM 3.21.3.84.23.1.
    IRC 871, IRC 872, or IRC 893 is notated anywhere   See IRM 3.21.3.84.19.8.
    Nontaxable income is reported, such as:
    • Accident and health insurance proceeds

    • "Black lung" benefits

    • Casualty insurance and other reimbursements

    • Child Support

    • Damages awarded for physical injury or sickness

    • Federal Employees' Compensation Act (FECA) payments

    • Interest on state or local government obligations

    • Public Aid

    • Supplemental Security Income (SSI)/SSI Disability

    • Tax Sheltered Annuities

    • Temporary Assistance for Needy Families (TANF)

    • VA Benefits/Payments

    • Welfare Benefits/Payments

    • Workforce Payments

    • Worker's Compensation

     
    1. If it is reported on line 1a, delete from line 1a, or

    2. If it is reported on lines 1b through 1h, delete from line 1z.

    Railroad Retirement Benefits are reported  
    1. If income is from a Form RRB-1099-R:

      • Edit the income to line 5b,

      • If the income is reported on line 1a, delete from line 1a, and

      • If the income is reported on lines 1b through 1h, delete from line 1z.

    2. If income is from a Form RRB-1042S:

      • If the income is reported on line 1a, delete from line 1a,

      • If the income is reported on lines 1b through 1h, delete from line 1z, and

      • See IRM 3.21.3.83.11.

    Scholarship/Fellowship Grant from a Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior), a Form 1098-T, or a statement from an educational institution is reported It is reported anywhere besides Schedule 1, line 8r Delete where found, and edit to Schedule 1, line 8r.

    Note:

    Edit RPC "G" if line 1a has been adjusted to zero and withholding is present on line 25g.

    Self-Employment income is reported It is reported anywhere besides Schedule 1, line 8z or Schedule C Delete where found, and edit to Schedule 1, line 9.
    Social Security income is reported   If income is from a Form SSA-1042S:
    • If it is reported on line 1a, delete from line 1a,

    • If it is reported on lines 1b through 1h, delete from line 1z, and

    • See IRM 3.21.3.83.11.

    Supplemental Unemployment Benefits under the Trade Act of 1974 (Sub-Pay TRA) are reported Repayment is indicated on Schedule 1, line 24e or 24z Delete income where found, and delete repayment amount from Schedule 1, line 25.
    Treaty-Exempt income is reported as taxable   Delete treaty-exempt income where reported as taxable, and edit to line 1k, if not already there.

    Note:

    If all income on the return has been exempted AND withholding is present on line 25d or 25g, edit RPC "G" .

    Unemployment Compensation is reported It is reported anywhere besides Schedule 1, line 7 Delete where found, and edit to Schedule 1, line 7.

Line 1b - Household Employee Wages (HSH) (Not Transcribed)
  1. If an amount is present on line 1b, edit SPC "E" .

Line 1e - Taxable Dependent Care Benefits (DCB) - Form 2441 (Not Transcribed)
  1. If an amount is present on line 1e, Form 2441 must be attached. If missing, correspond for Form 2441.

Line 1f - Employer-Provided Adoption Benefits - Form 8839 (Not Transcribed)
  1. If an amount is present on line 1f, Form 8839 must be attached. If missing, correspond for Form 8839.

Line 1g - Wages - Form 8919 (Not Transcribed)
  1. If an amount is present on line 1g, Form 8919 must be attached. If missing, correspond for Form 8919.

Line 1k - Total Income Exempt by Treaty (from Schedule OI, Item L)
  1. If line 1k contains an amount for income other than effectively connected income (found in Exhibit 3.21.3-9 or on Schedule NEC, such as gambling, pension, interest, dividends or Social Security, etc.) excluded by treaty, "X" line 1k.

    Note:

    If Form 8833 is attached, examine the type of income to determine whether it is non-effectively connected income.

  2. If the taxpayer does not answer Schedule OI, item L or does not provide sufficient information elsewhere on the return or on an attachment to permit the verification of the tax treaty benefit claimed (using the tax treaty table at Exhibit 3.21.3-10), correspond for any missing information. The taxpayer must identify all of the following:

    • The name of the foreign country of which the taxpayer is a resident and whose tax treaty with the U.S. provides the exempt status.

    • The treaty article number that allows the exemption.

      Note:

      If the treaty country claimed on Schedule OI, item L isn’t the same as the country of residence, the treaty is not valid.

    • The amount of the "exempt" income during the tax year.

    Note:

    In addition, if the taxpayer claims the benefits of the Government Service treaty article listed in Exhibit 3.21.3-14 verify that the taxpayer holds an A-1 or A-2 visa and refer to the Exhibit to determine if the claim is valid.

    Note:

    If the taxpayer cites a treaty listed in IRM 3.21.3.84.8.14 (8), "X" line 1k.

    Note:

    Indication of Exchange Visitor, see IRM 3.21.3.83.9

    .

  3. Consider all paragraphs and subparagraphs of a treaty article to be valid when Exhibit 3.21.3-10 lists only the article number. If the taxpayer only lists the article number, consider the treaty to be valid when Exhibit 3.21.3-10 lists any part of the treaty article.

  4. If the taxpayer cites Article IV or Article 4, see IRM 3.21.3.83.13. If taxpayer cites Article 4A, see IRM 3.21.3.83.16.

  5. If the taxpayer cites Article 21 (2) for India with the standard deduction amount, "X" line 1k.

  6. If after research, it is found that the claimed treaty exemption is invalid, follow the instructions below:

    1. Edit the amount entered on line 1k EITHER to Form 1040-NR, line 1a, 1z, or 2b through 7, OR to Schedule 1, line 1, 3 through 7, 8r, or 9, as appropriate for the type of income, if not already entered by the taxpayer. If unable to determine the appropriate line, edit the amount to Form 1040-NR, line 1a.

      Note:

      If the line to which income is being edited already has an entry, "X" the entry present and include the amount from line 1k in the total edited to the left of the deleted entry.

    2. If the taxpayer reports the amount on another line besides line 1k, "X" the amount EITHER on Form 1040-NR, line 1a, 1z, or 2b through 7, OR on Schedule 1, line 1, 3 through 7, 8r, 9, 11 through 18, 20 through 23, or 25, as appropriate.

    3. "X" line 1k.

    4. Do Not adjust or compute lines 9 and 11.

  7. If the taxpayer's claim is valid per Exhibit 3.21.3-10, follow the instructions in the table below:

    If the income and/or exclusion: And Then
    Is found on other than line 1k Has not been included with other entries "X" the income and/or exclusion.

    Note:

    Do not adjust or compute lines 9 and 11.

    Is found on other than line 1k Has been included with other entries "X" and adjust where found.

    Exception:

    Do not"X" or recompute lines 9 and 11.

    Is not already entered by the taxpayer on line 1k   Edit the allowable amount per the treaty to line 1k.
    Is found on line 1k And the taxpayer has exceeded the treaty limit "X" line 1k and edit the allowable amount per the treaty to line 1k and edit the exceeded amount to line 1a. See Figure 3.21.3-33.

    Note:

    Do not adjust or compute lines 9 and 11.

    Is found on line 1k Form W-2 and Form 1042-S are present for the same employer Add Form W-2 and Form 1042-S income amounts together then subtract the valid treaty amount. Ensure the remainder is included in line 1a.

  8. The following footnotes in Exhibit 3.21.3-10 must be used when validating treaty exemption claims. If the amount of income of that type exceeds the Maximum Amount of Compensation listed in Exhibit 3.21.3-10, the treaty is not valid. "X" line 1k and add the exempted amount to line 1a.

    Example:

    A resident of Australia may claim an exemption up to $10,000 under Article 17 for public entertainment income. The table has footnote "25" attached to the maximum amount on the table indicating the exemption isn’t allowed when the total Article 17 income is over $10,000. If the exempted amount is over $10,000 or Form 1042-S with Income Code 42 is attached with gross income over $10,000, the treaty is invalid.

    Footnote Explanation
    25 Exemption does not apply if gross receipts (including reimbursements) exceed this amount.
    26 Exemption does not apply if net income exceeds this amount.
    28 Exemption does not apply if compensation (or gross income from the Philippines and Romania) exceeds this amount.
    46 Exemption does not apply if gross receipts exceed this amount.

  9. If the only significant entry on Form 1040-NR is line 1k, edit CCC "B" .

    Figure 3.21.3-33

    This is an Image: 34010033.gif

    Please click here for the text description of the image.

  10. If the taxpayer claims the following on line 1k, use the IRM reference listed and follow the instructions:

    1. The taxpayer claims exemptions on Form 1042-S with Exemption Code 4 - see IRM 3.21.3.83.

    2. The taxpayer notates IRC 871, IRC 872, or IRC 893 or lists 871, 872, or 893 as a treaty article number, "X" line 1k and see IRM 3.21.3.84.19.8.

Line 1z - Total Wages
  1. Compute and edit line 1z when it is blank, dash, zero, or illegible and there are any entries on lines 1a through 1h.

Line 2a - Tax Exempt Interest
  1. If it can be determined that the amount on line 2a is bank interest, "X" the amount.

Line 2b - Taxable Interest
  1. Edit all taxable interest income from assets effectively connected with a U.S. trade or business.

  2. Interest paid to nonresident aliens from U.S. bank accounts is not taxable. If a supporting statement indicates U.S. bank interest, "X" the line 2b bank interest entry.

    Note:

    Schedule B is not valid as a supporting statement for interest.

    Reminder:

    "X" Schedule B when attached to a Form 1040-NR.

  3. If bank interest is entered on line 2b and excluded on any of the T-lines on Schedule 1, or on Form 1040-NR, Page 1, "X" both entries.

Line 3a - Qualified Dividends
  1. Reserved

Line 3b - Ordinary Dividends
  1. Reserved

Lines 4a and 4b - IRA Distributions and Taxable Amount
  1. "X" the amount on line 4a when lines 4a and 4b are the same or there is a difference of less than $1.

  2. Take no action when 4a has an entry and line 4b is blank.

    Exception:

    If the line 9 entry is equal to an amount on line 4a and the rest of lines 1a through 8 are blank, edit the line 9 entry to line 4b, and delete line 4a.

Lines 5a and 5b - Total Pensions and Annuities and Taxable Amount
  1. Nonresident aliens with pension income supported by Form 1099-R must report such income as either "effectively connected" on line 5b, Form 1040-NR, or "non-effectively connected" on Schedule NEC.

    1. If a Form 1099-R (pension income) is attached to a return and the income is not reported on either line 5b, Form 1040-NR, or Schedule NEC, edit the taxable amount of the Form 1099-R to line 5b, Form 1040-NR.

  2. Nonresident aliens with pension income supported by Form 1042-S, Income Code 15 (Income Code 14 for TY14 and prior) must report such income as either "non-effectively connected" on Schedule NEC, or "effectively connected" on line 5b, Form 1040-NR.

    1. If a Form 1042-S showing pension income is attached to a return and the income is not reported on either Schedule NEC or line 5b, Form 1040-NR, calculate the tax on the pension income using the applicable rate in Exhibit 3.21.3-9. Adjust line 23a, Form 1040-NR to include the tax calculated on the pension income, if not already included by the taxpayer. Do not adjust or compute line 24.

  3. "X" the amount on line 5a when lines 5a and 5b are the same or if there is a difference of less than $1.

  4. Take no action when line 5a has an entry and line 5b is blank.

    Exception:

    If the line 9 entry is equal to an amount on line 5a and the rest of lines 1a through 8 are blank, edit the line 9 entry to line 5b, and delete line 5a.

  5. Do not move pension income from line 5b to line 1a.

  6. Move the gross and taxable amounts of Railroad Retirement Benefits (Form RRB-1099-R) to line 5a and 5b when claimed elsewhere on the return.

Line 7 - Capital Gain or Loss (Schedule D)
  1. Edit RPC "T" when all of the following apply:

    • There is a positive amount greater than $1 on line 7.

    • Schedule D is not attached.

    • The line 7 box is checked.

  2. When the line 7 box is marked and a negative entry is present on line 7 and no Schedule D is attached, follow the instructions below (i.e., treat a negative amount on line 7 as if the line 7 checkbox is not marked).

  3. When an amount is present on line 7, Schedule D is not attached, and the line 7 checkbox is not checked:

    If And Then
    A document from which a Schedule D can be dummied is attached Column (h) can be determined Dummy a Schedule D. Edit short-term gains/losses to line 7 and long-term gains/losses to line 15.

    Exception:

    Do not dummy a Schedule D if corresponding for other missing return items. Instead, include the request for Schedule D in the correspondence to the taxpayer.

    No document is attached from which a Schedule D can be dummied ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy the amount to line 7 Schedule D.
    No document is attached from which a Schedule D can be dummied ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy the amount to line 7 Schedule D.
    No document is attached from which a Schedule D can be dummied ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for Schedule D.

  4. If income reported from Insurance Companies Demutualization (reported on Form 1099-B) is present, but entered on other than line 7, edit that amount to line 7, and dummy a Schedule D.

  5. If Form 8288-A is attached, verify that the amount in box 3 is reported on one of the following:

    • Schedule D, column (d)

    • Schedule E, (page 2 part II)

    • Form 4797, column (d)

    • Form 4684, Section B

    If And Then
    The amount in box 3 Form 8288-A is reported   Take no action.
    The amount in box 3, Form 8288-A is not reported Lines 16 - 18, Schedule NEC or a supporting statement includes the amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Ensure all T-lines are edited. See IRM 3.21.3.23.

    Exception:

    Do not dummy or correspond for a Schedule D if the taxpayer resides in one of the countries listed in IRM 3.21.3.84.8.14 (8) below.

    The amount in box 3 Form 8288-A is reported on lines 16 - 18, Schedule NEC ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for Form 4797.
    The amount in box 3, Form 8288-A is not reported Schedule D cannot be dummied Correspond for Schedule D.

    Exception:

    Do not correspond for a Schedule D if the taxpayer resides in one of the countries listed in IRM 3.21.3.84.8.14 (8) below.

    1. Correspond using the following literal when using Form 9143: Complete Schedule D to report the amount realized from the sale of U.S. real property interests as reported in box 3, of your Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons.

    2. When using Form 13900, mark paragraph 4.

  6. If the taxpayer claims a capital gains exemption under IRC 871 and they were present in the U.S. for less than 183 days, (see Schedule OI, item H or attachments for determination) take the actions below:

    1. Edit the capital gains to line 7 (if not already included).

    2. Edit the exempt amount to Schedule 1, line 9 as a negative amount (if not already included).

    Note:

    The instructions also apply if the number of days is blank.

  7. If the taxpayer claims a capital gains exemption under IRC 871 and they were present in the U.S. for 183 days or more, take the actions below:

    1. Edit the capital gains to line 7 (if not already included).

    2. "X" exemption if found on Form 1040-NR, Page 1, or if found on Schedule 1, "X" line 9 or line 25, as appropriate.

  8. If the taxpayer resides in any of the countries listed below, capital gains on personal property are exempt. However, if the taxpayer resides in one of the countries listed below and reports capital gains, accept the taxpayer's entry. Do not "X" the line 7 amount or Schedule D.

    Country Article Number
    Austria 13
    Bangladesh 13
    Barbados 13
    Belgium 13
    Bulgaria 13
    Canada XIII
    China 12
    Commonwealth of Independent States
    (Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan)
    III
    Cyprus 16
    Czech Republic 13
    Denmark 13
    Egypt 14
    Estonia 13
    Finland 13
    France 13
    Germany 13
    Hungary 12
    Iceland 16
    India 13
    Indonesia 14
    Ireland 13
    Israel 15
    Italy 13
    Jamaica 13
    Japan 16
    Kazakhstan 13
    Republic of Korea 16
    Latvia 13
    Lithuania 13
    Luxembourg 14
    Mexico 13
    Morocco 13
    Netherlands 14
    New Zealand 13
    Norway 12
    Philippines 14
    Poland 14
    Portugal 14
    Romania 13
    Russia (Russian Federation) 19
    Slovak Republic (Slovakia) 13
    Slovenia 13
    South Africa 13
    Spain 13
    Sri Lanka 13
    Sweden 13
    Switzerland 13
    Tunisia 13
    Turkey 13
    Ukraine 13
    United Kingdom
    (including Great Britain, England, Northern Ireland, Scotland, and Wales)
    13
    Venezuela 13

  9. If the taxpayer exempts capital gains and does not meet the criteria in IRM 3.21.3.84.8.14 (6), IRM 3.21.3.84.8.14 (7), or IRM 3.21.3.84.8.14 (8) above, edit the exempted capital gains to line 7 from where the taxpayer reported the amount.

Line 8 - Other Income From Schedule 1, Line 10
  1. If there is an amount entered on Form 1040-NR, line 8, Schedule 1 must be attached. If not attached, correspond for Schedule 1. If corresponding for Schedule 1 for entry on line 8 and line 10, correspond for only one missing Schedule 1. Use the first entry amount and line number on the return.

    Exception:

    If a Schedule 1 can be dummied from attachments, do not correspond for a Schedule 1 unless already corresponding for other missing information. See paragraph (2) below. Do not correspond if it can be determined that line 8 on the Form 1040-NR has been used as a subtotal line.

  2. See IRM 3.11.3 for instructions on dummying Schedule 1.

Line 9 - Total Gross Effectively Connected Income (GECI)
  1. If the only entry on lines 1a through 8 is on line 4a or 5a and this amount is equal to line 9, edit the line 9 amount to line 4b or 5b (as appropriate).

  2. Use the table below to determine editing instructions when there is an amount on line 9, lines 1a through 8 are blank, and no Schedule C, Schedule D, Schedule E, or Schedule F is attached:

    If the amount on line 9 is Then
    A positive or negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for an explanation of line 9.
    A positive or negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit the amount to Schedule 1, line 9.

  3. Compute and edit line 9 when it is blank, dash, zero, or illegible and there are entries leading to a total. Do not include the following:

    1. Line 1k

    2. Line 2a

    3. Line 3a

    4. Line 4a

    5. Line 5a

    Exception:

    Do not compute line 9 if adjusting lines 1a through 8.

Adjustments to Income - Lines 10 and 11

  1. The following subsections contain information pertaining to lines 10 and 11 on Form 1040-NR.

Line 10 - Adjustments to Income from Schedule 1, Line 26
  1. If there is an amount entered on line 10, Schedule 1 must be attached.

  2. If not attached, see IRM 3.11.3 for instructions on dummying Schedule 1 or corresponding.

Line 11 - Adjusted Gross Income (Total Adjusted Gross Effectively Connected Income)
  1. Compute and edit line 11 when it is blank, dash, zero, or illegible and there are entries leading to a total.

    Exception:

    Do not compute line 11 if adjusting lines 1a through 8.

  2. Edit RPC "J" when line 11 is blank, dash, zero, or edited to be blank and line 23a has a significant entry.

Tax Computation - Lines 12 Through 18

  1. The following subsections contain information pertaining to perfection of lines 12 through 18 on Form 1040-NR.

Line 12 - Itemized Deductions/Standard Deduction
  1. For Form 1040-NR, the standard deduction is not allowed. If the standard deduction is claimed and a completed Schedule A is attached, "X" the Schedule A unless the exception below applies.

    Exception:

    Residents of India who are students or business apprentices are allowed to claim the standard deduction (Article 21 {2}). Schedule A (Form 1040-NR) must be attached. See IRM 3.21.3.84.22.

  2. To determine if the taxpayer is a student or business apprentice, review:

    1. The occupation area of Form 1040-NR.

    2. Lines E and F of Schedule OI for visa J-1, F-1, or H-1 that was previously F-1.

    3. Form 8843 with entries in Part III.

    4. Other attachments to the return.

  3. If the taxpayer claims a current year standard deduction amount from the table below on line 12, a Schedule A is blank or not attached, and you can determine the taxpayer was a resident of India and a student or business apprentice, then dummy a Schedule A by editing the line 12 amount on lines 7 and 8 of Schedule A.

    Filing Status Standard Deduction Additional Standard Deduction 1 (65+ or blind) Additional Standard Deduction 2 (65+ and blind)
    Single $13,850 $15,700 $17,550
    Married filing separately (MFS) $13,850 $15,350 $16,850
    Qualifying Surviving Spouse (QSS) $27,700 $29,200 $30,700

  4. If an amount is present on line 12, Schedule A (Form 1040-NR) (Sequence 7A) must be present. If Schedule A (Form 1040-NR) is missing and cannot be dummied from attachments, correspond.

    Exception:

    If you can determine that the taxpayer is only claiming state and/or local taxes, dummy Schedule A (Form 1040-NR) by editing the line 12 amount on lines 1a and 8, and do not correspond unless corresponding for other missing information.

    Exception:

    If line 12 is a standard deduction amount from the table in IRM 3.21.3.84.10.1 (3) and the taxpayer was not a resident of India and a student or business apprentice, do not dummy or correspond for Schedule A.

    Exception:

    When a prior year standard deduction amount is claimed on line 12 on a current year return, do not dummy or correspond for Schedule A.

  5. For residents of India who are students or business apprentices, do not correspond for a missing Schedule A if line 12 equals the sum of line 15 on an attached Form 4684 plus a standard deduction amount from the table in IRM 3.21.3.84.10.1 (3). Instead, dummy a Schedule A by editing the line 12 amount on lines 7 and 8 of Schedule A.

Line 13a - Qualified Business Income Deduction (Form 8995 or Form 8995-A)
  1. For TY19 and later, if an amount is claimed on line 13a, Form 8995 or Form 8995-A must be attached. If missing, correspond for Form 8995-A.

Line 15 - Taxable Income
  1. Compute and edit line 15 when it is blank, dash, zero, or illegible and there are entries leading to a positive total.

Line 16 - Tax (on Effectively Connected Income)
  1. If Form 4972 box is checked, Form 4972 must be attached. Correspond, if missing.

  2. If Form 8814 box is checked, Form 8814 must be attached. Correspond, if missing.

  3. If line 15 contains a positive entry and the taxpayer indicates "Exempt" or "Tax Treaty" on line 16, verify following line 1k procedures, and if valid, edit the excluded amount to line 1k. See IRM 3.21.3.84.8.6.

    Note:

    If the explanation of tax treaty benefits is not valid, do NOT edit CCC "B" .

  4. If all income on line 15 is determined to be not taxable,"X" the taxpayer's entry on line 16 and edit CCC "B" if applicable.

Credits - Lines 19 through 21

  1. Do not correspond for missing schedules or forms to support entries on lines 19 through 21 when line 15 of Form 1040-NR is (or can be determined to be) zero or a negative amount. Instead, "X" the unsupported credit amount and adjust the total on line 21.

Line 19 - Child Tax Credit or Credit for Other Dependents
  1. Reserved

Line 20 - Amount from Schedule 3, Line 8
  1. If an amount is present on Line 20, Schedule 3 must be attached.

  2. If Schedule 3 is not attached, see IRM 3.11.3 for instructions on dummying or corresponding.

Line 21 - Total Credits Claimed
  1. If blank and there are entries leading to a total, compute and edit.

  2. Correspond for an explanation when an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on line 21, and lines 19, 20, and Schedule 3, Part I are blank, unless the taxpayer has indicated "FNS" (Fuel from a Nonconventional Source) or "Section 29" .

Other Taxes - Lines 23a Through 24

  1. The following subsections contain information pertaining to Form 1040-NR, lines 23a through 24.

Line 23a - Not Effectively Connected Income Tax
  1. If blank, and an amount is present on Schedule NEC, line 15, edit the Schedule NEC, line 15 amount to line 23a.

  2. Follow Schedule NEC instructions (see IRM 3.21.3.84.23) when ALL of the following apply:

    • Line 23a is blank

    • Form 1042-S is present

    • Form 1042-S income has not been reported on Form 1040-NR, page 1 or Schedule NEC

    • Income should be reported on Schedule NEC

    Note:

    If the Form 1042-S income can be reported on Page 1 or Schedule NEC per Exhibit 3.21.3-2, Schedule NEC takes priority.

  3. Before editing line 23a, see Schedule NEC instructions beginning at IRM 3.21.3.84.23.

  4. If line 23a is significant and line 11 is blank, dash, zero, or edited to be blank, edit RPC "J" .

  5. If there is an amount on line 23a, Schedule NEC must be attached. If missing, correspond for Schedule NEC.

    Exception:

    If there is an amount on line 23a only due to editing, do not correspond for a missing Schedule NEC.

  6. Enter amounts in dollars only.

Line 23b - Other Taxes From Schedule 2, Line 21
  1. If there is an amount on line 23b, Schedule 2 must be attached.

  2. See IRM 3.11.3 for instructions on dummying or corresponding.

Line 23c - Transportation Tax
  1. Reserved

Line 23d - Total Other Taxes
  1. Reserved

Line 24 - Total Tax
  1. Edit line 24 in dollars and cents when adjusting or computing and editing amounts.

  2. Compute and edit line 24 when it is blank, dash, zero, or illegible and there are entries leading to a total:

    1. Add lines 22 and 23d.

    2. If there are no entries on lines 19 through 23d, and line 18 has an entry, edit the line 18 amount on line 24.

    3. If there are no entries on lines 17 through 23d, and line 16 has an entry, edit the line 16 amount on line 24.

    Exception:

    Do not compute line 24 when line 23a has been edited or adjusted.

  3. Edit CCC "B" when either of the following is present:

    1. Line 15 is a negative, zero, dash, or none, (or it can be determined to be negative or zero) and lines 16 through 38 are blank, dash, or zero.

      Note:

      If line 11 is the last entry, do not attempt to make a determination.

    2. If a significant entry on line 16 is less than or equal to line 21 and lines 22 through 38 are blank, dash, or zero.

      Exception:

      DO NOT edit CCC "B" when either line 35a or 36 can be perfected.

  4. Adjust line 24 to exclude any amount from Form 5330 (excise tax assessment) when there is an indication that it was included. Detach Form 5330 and route it to Receipt and Control.

Payments and Refundable Credits - Lines 25a Through 33

  1. The following subsections contain information pertaining to perfection of lines 25a through 33 on Form 1040-NR.

  2. Edit lines 25d through 33 in dollars and cents when adjusting or computing and editing amounts.

  3. Line 33 is a T-Compute line.

Lines 25a, 25b, and 25c - W-2 Withholding, 1099 Withholding, Other Withholding
  1. Reserved

Line 25d - Total of Lines 25a through 25c (Withholding for W-2, 1099, and Other)
  1. If line 25d is blank, dash, zero, or illegible, compute by adding lines 25a through 25c, if present. Otherwise, if line 25d is blank, dash, zero, or illegible and withholding is present on Form W-2 or Form 1099, edit the U.S. withholding amount to line 25d.

  2. Review ALL Forms W-2 to ensure that withholding claimed by the taxpayer is U.S. withholding. If an amount is present for non-U.S. withholding, "X" line 25d.

  3. If line 25d has a misplaced entry from Form 8805 or Form 8288-A:

    1. If "Partnership" is clearly shown, edit the amount to line 25e.

    2. If "Real Property" is clearly shown, edit the amount to line 25f or 25e accordingly.

      Caution:

      When editing a misplaced entry for Form 8805 or Form 8288-A, "X" line 25d, and edit the amount to the appropriate line. Do not arrow.

  4. If the line 25d entry is ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡U.S. Form(s) W-2, Form 1099, or similar statement (minimum requirements are; name of employer or EIN, income and withholding) are attached, correspond if unable to verify the amount through research:

    1. If using Form 13900 and the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, "X" line 25d.

    Note:

    Research IRP for withholding (when available) before corresponding. Do not research if corresponding for other missing information. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Withholding from Form 1042-S, Form SSA-1042S, and Form RRB-1042S should be reported on line 25g. If found on line 25d or any other line, edit or arrow to line 25g.

  6. Edit RPC "G" if any of the following conditions exist:

    1. Entry is present on Form 4972, line 6 and/or 8.

    2. Taxpayer reported withholding on line 25d and exempted all income on the return due to a valid tax treaty.

  7. Edit CCC "8" on a refund return when withholding is significant and there is only a single supporting document attached that is one of the following:

    • A substitute statement (e.g., substitute Form W-2 or employer-provided earnings statement with year-to-date totals) or attachment or worksheet.

      Note:

      If the only support for withholding is from a single or multiple Forms 4852 and there are no other withholding documentation is present, edit CCC "8" .

    • Handwritten

    • Other than computer-printed Form W-2

    • Altered name, SSN, wages or federal income tax withheld.

    Note:

    To be considered a "single supporting document" , the document must show support from only one employer. Consider Form 4852 and an Employer-provided earnings statement with the same employer and identical amounts to be a “single supporting document”.

Line 25e - Form(s) 8805
  1. If the TIN on Form(s) 8805 is missing or other than the TIN in the caption area ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, "X" line 25e.

    Note:

    If a TIN has been newly assigned (edited in red), but is not on Form 8805, do not "X" the credit.

    Caution:

    If there is no ITIN on Form 8805, but an ITIN is on the Form 1040-NR - verify that the names are the same and allow the withholding. Do not "X" the withholding.

  2. If Form 8805 or similar withholding document from withholding agent is not attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond. If using Form 13900 and the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, "X" line 25e.

    Note:

    Any statement or document from a withholding agent that is submitted in lieu of a Form 8805 must include the U.S. withholding agent's name, address, and TIN (EIN or SSN), and the name in which the tax withheld was reported. If the name of the taxpayer claiming the refund is different or withholding agent information is not included, "X" the credit.

Line 25f - Form 8288-A
  1. If any credit is claimed and:

    1. Form 8288-A is attached and the Date of Transfer on Form 8288-A (box 1) is not within the Tax Period of the return, (for current year returns see instructions in IRM 3.21.3.84.13.4 (2) below)"X" line 25f, and edit only the credit(s) that are within the Tax Period of the return.

      Caution:

      If "Original DOT" is notated on the top right side of Form 8288-A, accept that date as the official Date of Transfer.

      Note:

      If the return is being filed for a Fiscal Period, allow only credit(s) for which the Date of Transfer on Form 8288-A (box 1) falls within the Fiscal Period of the return being filed.

    2. Form 8288-A is not attached, "X" line 25f and correspond.

    Note:

    Form 8288 may not be used as verification of 8288-A withholding.

  2. If the Date of Transfer on Form 8288-A is in 2024 and:

    1. The return is numbered,"X" the credit(s). Detach Form 843 along with Form 8288-A and route to Accounts Management.

    2. The return is unnumbered and Form 843 is attached, detach Form 843 along with Form 8288-A and route to Accounts Management. "X" line 25f amount and process the return.

    3. The return is unnumbered and Form 843 is not attached, send the return back to the taxpayer. Correspond using Form 9143, box 25.

    Reminder:

    If "Original DOT" is notated on the top right side of Form 8288-A, accept that date as the official Date of Transfer.

  3. All Form 8288-A credits must be verified through the INTLWebApps Database (see IRM 3.21.25.17). If Form 8288-A or a signed or initialed settlement statement/closing agreement (see Exhibit 3.21.3-11) is attached and the return is:

    1. Numbered: Request verification of the credit from the FIRPTA Unit and edit Action Code "420" .

    2. Unnumbered: Follow the table below:

      If And Then
      Credits have not been verified   Completely code and edit the return, then place return in designated basket for verification.

      Note:

      The verification slip (Form 13698) or printout is attached to the tax form after the credit verification is completed.

      Credits are verified The verified amount is the same or greater than the amount the taxpayer reported Ensure that the taxpayer's entry is reported on line 25f.
      Credits are verified The verified amount is less than the amount the taxpayer reported
      1. "X" the amount reported by the taxpayer.

      2. Edit the verified amount to line 25f.

  4. If Form 8288-A is attached, also see IRM 3.21.3.84.8.14 (5) for additional instructions.

Line 25g - Form 1042-S
  1. Withholding from Form 1042-S, Form SSA-1042S, and Form RRB-1042S should be reported on line 25g. If line 25g is blank, dash, zero, or illegible and withholding is present on Form 1042-S, Form SSA-1042S, or Form RRB-1042S, edit the withholding amount(s) to line 25g.

    Note:

    For Form 1042-S, edit the withholding amount from box 10, Total withholding credit.

  2. If an amount is present, Form 1042-S, Form SSA-1042S, or Form RRB-1042S must be attached. If missing, "X" line 25g, and correspond.

    Exception:

    If a letter is attached signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not "X" line 25g.

    Caution:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. If the TIN on any Form 1042-S is missing, incomplete, or other than the TIN in the caption area ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, "X" line 25g.

    Note:

    If a TIN has been newly assigned (edited in red), but is not on Form 1042-S, do not "X" the credit.

    Caution:

    If there is no ITIN on Form 1042-S, but an ITIN is on the Form 1040-NR, and the names are the same, allow the withholding. Do not "X" the credit.

  4. When Form 1042-S with Exemption Code 2 (exempt under an Internal Revenue Code section) is filed on Form 1040-NR, take one of the following actions:

    If Then
    Taxpayer has not entered income or exclusion on Form 1040-NR Take no action.
    Taxpayer shows the amount as income and exclusion or as a tax treaty on page 1 "X" entries where found.
    Taxpayer reported gross income and excluded withholding allowance "X" those amounts wherever found, and accept the net income where reported.
    If the taxpayer reports all or part of net income as taxable income Accept the taxpayer's amount on the appropriate line.
    Form 1040-NR was prepared by USAID,

    Note:

    The return may be stamped Treasury Regulation 1.6012-1(b)(3), USAID/G/HCD/POSS/TAX.

    1. Accept the return as filed,

    2. Verify the Form 1042-S for the taxpayer's name, Taxpayer Identification Number (TIN) and withholding only, and

    3. DO NOT "X" out entries in accordance with normal Exemption Code 2 procedures.

  5. When Form 1042-S with Exemption Code 4 (exempt under a tax treaty) is filed on Form 1040-NR, take one of the following actions:

    If Then
    Taxpayer has entered a valid tax treaty article on Schedule OI, reported the exempt income on Form 1040-NR, line 1k, and reported the withholding on line 25g Take no action.
    Taxpayer has entered a valid tax treaty article on Schedule OI, included the exempt amount as taxable income (e.g., Form 1040-NR, line 1a) and has not deducted it elsewhere on the return "X" line 1a or wherever found, adjust it to exclude the exempt income, and edit exempt amount to line 1k.
    Taxpayer did not enter a valid tax treaty article on Schedule OI Correspond.

    Exception:

    Do not correspond for a missing article number if Income Code 16 (Income Code 15 for TY14 and prior) and Exemption Code 4 are present and any of the following conditions apply:
    • Form 1042-S was issued by a college/educational institution or
    • Zero-balance return or
    • Form 1042-S has no withholding.

  6. Edit RPC "G" if either of the following conditions exist:

    1. Entry is present on Form 4972, lines 6 and/or 8, or

    2. Taxpayer reported withholding on line 25g and exempted all income on the return due to a valid Tax Treaty.

  7. Edit CCC "8" on a refund return when withholding is claimed from a Form 1042-S, and is supported by only one withholding document that is one of the following:

    1. A substitute or similar statement

    2. Handwritten

      Exception:

      Form 1042-S issued by gambling casinos.

    3. Altered in one of the following areas: Name, SSN, Federal Income Tax Withheld, and/or Wages.

Line 26 - Estimated Tax Payments
  1. Any amounts determined to be other than ES tax payments must be deleted and edited to the proper line.

Line 27
  1. Reserved

Line 28 - Additional Child Tax Credit
  1. If an amount is present on line 28 and at least three qualifying children with SSNs are claimed as dependents, Schedule 8812 must be attached. If missing, correspond for Schedule 8812.

Line 29 - Form 1040C Credit
  1. Reserved

Line 30
  1. Reserved

Line 31 - Other Payments and Refundable Credits (Schedule 3, Line 15)
  1. If there is an amount on Line 31, Schedule 3 must be attached. If missing and cannot be dummied from attachments, correspond for Schedule 3.

  2. See IRM 3.11.3 for instructions on dummying or corresponding.

Line 32 - Total Other Payments and Refundable Credits
  1. Compute and edit line 32 when it is blank, dash, zero, or illegible and there are entries leading to a total.

Line 33 - Total Payments
  1. Correspond for an explanation when the amount claimed on line 33 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the type of credit is not identified.

  2. Compute and edit line 33 when it is blank, dash, zero, or illegible and there are entries leading to a total.

Refund or Amount Owed - Lines 34 Through 38

  1. The following subsections contain information pertaining to lines 34 through 38 on Form 1040-NR.

  2. Edit lines 35a, 36, 37, and 38 in dollars and cents when adjusting or computing and editing amounts.

Line 35a - Refund Due
  1. If blank, compute and edit line 35a when lines 34, 36, and 37 are all blank, line 33 is greater than line 24, and any one of the following conditions is present:

    • Line 33 has an entry.

    • The taxpayer has computed or indicated no tax is due on lines 16, 18, 22, or 24.

    • It can be determined that line 24 would be zero if it were computed.

  2. Do not edit CCC "B" when line 35a has been computed to a significant amount.

Lines 35b, 35c and 35d - Direct Deposit
  1. For complete instructions, see IRM 3.11.3.

Line 35e - Refund Check
  1. See IRM 3.21.3.83.6 for manual refund procedures.

Line 36 - Estimated Tax Credit Elect
  1. When lines 34, 35a, and 36 are the same, perfect them as follows:

    If ES payments (line 26) Then
    Are claimed, "X" the entry on line 35a.
    Are not claimed, "X" the entry on line 36.

    Note:

    An overpayment (line 34) can be divided between lines 35a (refund) and 36 (ES Credit Elect).

  2. Exclude the additional amount when line 36 includes an amount for any of the following:

    • Late filing penalty

    • Late payment penalty

    • Interest

    Note:

    Do not exclude estimated tax penalty.

  3. Edit Action Code "430" to send the return to Rejects when either of the following conditions is present:

    • A statement is present on or near line 36 indicating that the taxpayer wants the credit applied to their spouse's account.

    • The return is FS 3 and there is a statement or schedule present showing how estimated payments are to be allocated.

Line 37 - Amount You Owe (Balance Due)
  1. If blank, compute and edit line 37 when lines 34, 35a, and 36 are blank and line 24 is greater than line 33.

    Note:

    When computing line 37, include the amount from line 38, estimated tax penalty.

  2. Do not edit CCC "B" when line 37 has been computed to a significant amount.

Line 38 - Penalty for Underpayment of ES Tax (Form 2210 and Form 2210-F)
  1. Form 2210 has been assigned sequence number "06" and Form 2210-F has been assigned sequence number "06a" . However, these forms are not transcribed. Delete these forms.

  2. Edit CCC "P" when any of the following conditions apply:

    1. Tax year is "2018" and Box A in Part II is marked and "80% Waiver or 85% Waiver" is noted next to Box A or in the Box A area.

    2. Form 2210 is attached with any of the boxes in Part II, C - E marked.

    3. Form 2210-F is attached with Box B in Part I marked.

    4. There is any indication of the following on Form 2210 OR in the Line 38 area, Form 1040-NR OR in the occupation area of Form 1040-NR.

    • Actual Withholding

    • Annualized Income (AI)

    • Exempt

    • Waiver

    • Not liable for ES penalty (Reasonable Cause for Underpayment)

    Exception:

    Take no action, and do not edit CCC "P" if there is an indication of Disaster on Form 2210, Form 2210-F, or Form 1040-NR.

  3. If only Box A and/or Box B in Part II on Form 2210 is marked or if only Box A in Part I on Form 2210-F is marked, verify the attached statement indicates the taxpayer has retired after reaching age 62 or has become disabled during the tax year or the prior tax year. If statement is present, edit CCC "P" . If statement is not present, edit CCC "7" and correspond using Letter 369C, open paragraph U using the following verbiage: "We cannot consider your request for a waiver of the estimated tax penalty because the required documentation was not attached to your return. If you receive notice of penalty assessment, you may request a consideration of the assessment by mailing the required documentation along with a copy of your Form 2210, to the address that will be indicated on the notice of assessment."

    Exception:

    Take no action, and do not edit CCC "P" or CCC "7" if there is an indication of Disaster on Form 2210, Form 2210-F, or Form 1040-NR.

  4. If line 38 is blank and Form 2210 or Form 2210-F is attached, edit the amount from:

    • Line 19 of Form 2210.

    • Line 16 of Form 2210-F.

  5. Compare the line 38 entry with the amount on Form 2210, line 19 (or Form 2210-F, line 16) when CCC "P" is edited. If the entry on line 38 is different from the amount on Form 2210 or Form 2210-F after allowing for rounding:

    1. "X" the line 38 entry, and

    2. Edit the amount from Form 2210 or Form 2210-F to line 38.

Signature

  1. Rev. Rul. 68-500 allows Form 1040-NR to include a facsimile signature signed for the taxpayer by an agent. Accept a facsimile signature and process the returns that are signed for the taxpayer by an agent. (Attorney-in-Fact)

  2. Refer to IRM 3.11.3 for additional correspondence instructions.

    Note:

    Correspond using Form 9143 if the signature is missing or invalid. Correspond using Form 13900 if documentary evidence is missing.

    Exception:

    For "bulk/clean" filed Form 1040-NR, accept the facsimile or original signatures and process returns that are signed for the taxpayer by an agent (Attorney-in-Fact). For these types of returns, accept signatures with or without a POA or statement that indicates Treasury Regulations Section 1.6012-1(b)(3). Do not correspond if there is no signature but Treasury Regulation Section 1.6012-4(b)(3)(i) is listed.

    Reminder:

    A thumbprint in lieu of a signature is to be treated as a frivolous filer when present in the signature area.

Occupation

  1. The occupation area of the return is not transcribed; however, it is important to scan this area. If the country is India and student is listed in the occupation area, the taxpayer qualifies to claim the standard deduction.

Identity Protection Personal Identification Number (IP PIN)

  1. Identity Protection Personal Identification Number (IP PIN) is located in the "Sign Here" area of the return.

  2. If blank and CP-01A is attached, verify the taxpayer name(s) matches the name(s) on the CP-01A and the tax return. If the name(s) match and the IP PIN on CP-01A is not present on the tax return, edit the IP PIN in the boxes designated for Identity Protection PIN (located to the right of the occupation field.)

  3. If the name(s) do not match between an attached CP-01A and the tax return, see Exhibit 3.21.3-1, Attachment Guide.

  4. If multiple IP PINs are present, circle all but the IP PIN assigned to the primary taxpayer.

  5. Circle the IP PIN if it is more or less than 6 numbers.

Preparer Data

  1. Refer to IRM 3.11.3.14.8 for complete preparer instructions.

    Exception:

    Do not edit the E-File waiver code on Form 1040-NR.

Form 1040-NR, Schedule 1 (Sequence 01) - Additional Income and Adjustments to Income

  1. For TY20 and later, Schedule 1 may be attached to Form 1040-NR. See line-by-line instructions.

Schedule 1, Line 1 - State/Local Income Taxable Refunds
  1. Reserved

Schedule 1, Lines 2a and 2b - Alimony Received and Date of Original Divorce or Separation (Not Transcribed)
  1. If the taxpayer has reported alimony income received on Schedule 1, line 2a, edit the entry to Schedule 1, line 9.

Schedule 1, Line 3 - Business Income or Loss (Schedule C)
  1. If an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on line 3 and no Schedule C is attached:

    If the amount on line 3 is Then
    Supported by an attachment Dummy a Schedule C.

    Note:

    See IRM 3.11.3 for complete instructions to dummy Schedule C.

    Not supported by an attachment Correspond for Schedule C.

  2. Dummy a required Schedule C by editing a positive amount to lines 1 and 3 or a negative amount to line 28 when ALL of the following conditions apply:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Schedule C is not present.

    3. There are no supporting documents from which to dummy the required Schedule C.

    Exception:

    Do NOT dummy Schedule C if corresponding for other missing return items. Instead, include the request for Schedule C in the correspondence to the taxpayer.

Schedule 1, Line 4 - Other Gains or Losses (Form 4797)
  1. If a positive or negative entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on Schedule 1, line 4; Form 4797, Form 4684, or a statement must be attached. If missing, correspond for Form 4797.

    Exception:

    Correspond for Form 4684 instead of Form 4797 if taxpayer has notated "Form 4684" .

Schedule 1, Line 5 - Rental Real Estate, Royalties, Partnerships, S Corporations, Trusts, etc. (Schedule E)
  1. If an amount is present on line 5 and Schedule E is not attached, but Form 4835 is present, dummy Schedule E as follows:

    If Form 4835 Then
    Line 32 is a positive amount Edit that amount to line 40 on Schedule E.
    Line 34c is a negative amount Edit that amount to line 40 on Schedule E.

    Exception:

    If a taxpayer notates PAL, do not move the negative amount to line 40 of Schedule E

    Line 34c is blank Edit the loss from line 32 on Form 4835 to line 40 of Schedule E.

    Exception:

    If a taxpayer notates PAL, do not move the negative amount to line 40 of Schedule E

    Line 7 is a positive amount Edit that amount to line 42 on Schedule E.

  2. Dummy a Schedule E, if possible, when an amount is present, but neither Schedule E nor Form 4835 is attached:

    If there is a clear indication that the income is from: Then
    Rents or royalties
    1. Edit a positive amount to line 24 on Schedule E.

    2. Edit a negative amount to line 25 on Schedule E.

    A partnership or S-Corporation
    (e.g., Schedule K-1)
    1. Edit a positive amount to line 30 on Schedule E.

    2. Edit a negative amount to line 31 on Schedule E.

    An estate or trust
    1. Edit a positive amount to line 35 on Schedule E.

    2. Edit a negative amount to line 36 on Schedule E.

  3. Correspond when an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present and Schedule E is not attached and cannot be dummied.

    Note:

    Correspond for a complete Schedule E if only page 1 and/or 2 of Schedule E is attached AND blank.

  4. Dummy a required Schedule E by editing a positive amount to line 24 or a negative amount on line 25 when ALL the following conditions apply:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    2. Schedule E is not present.

    3. There are no supporting documents from which to dummy the required Schedule E.

    Exception:

    Do not dummy a Schedule E if corresponding for other missing return items. Instead, include the request for Schedule E in the correspondence to the taxpayer.

Schedule 1, Line 6 - Farm Income or Loss (Schedule F)
  1. If an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present and Schedule F is not attached:

    If the amount on line 6 is Then
    Supported by an attachment Dummy a Schedule F

    Note:

    See IRM 3.11.3 for complete instructions to dummy Schedule F.

    Not supported by an attachment Correspond for Schedule F.

  2. Dummy a required Schedule F by editing a positive or negative dollar amount onto line 9 when ALL the following conditions apply:

    1. The amount on line 6 is less than ≡ ≡ ≡ (positive or negative).

    2. Schedule F is not present.

    3. There are no supporting documents from which to dummy the required Schedule F.

    Exception:

    Do not dummy Schedule F if corresponding for other missing return items. Instead, include a request for Schedule F in the correspondence to the taxpayer.

Schedule 1, Line 7 - Unemployment Compensation (UEC)
  1. Edit the gross amount of unemployment compensation (UEC) from Form 1099-G if line 7 is blank.

  2. Delete any amount identified as supplemental benefits received from a company-financed supplemental unemployment benefits (SUB) fund. Include the amount of SUB pay on line 1a, Form 1040-NR.

  3. Take no action when the taxpayer indicates repaid and an amount on the dotted portion of line 7.

Schedule 1, Lines 8a through 8z - Other Income
  1. If a claimed Treaty Exemption is determined to be valid (see IRM 3.21.3.84.8.6), but the taxpayer has entered, or included in a total, the income and/or exemption on Schedule 1, or on Form 1040-NR, lines 1a, 1z, or 2b-8, take the following actions:

    1. "X" the income and/or exemption on Schedule 1, line 9 or 25 (if included), and on Form 1040-NR, line 1a, 1z, or 2b-8(as appropriate),

    2. Edit the allowable exemption amount on Form 1040-NR, line 1k, if not already entered by the taxpayer, and

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

    3. If the treaty is valid but the taxpayer has claimed more than the treaty allows, edit the allowable amount on Form 1040-NR, line 1k, if not already entered by the taxpayer. Ensure that the excess amount is reported on Form 1040-NR, lines 1a - 8; if not reported, edit the excess amount to Form 1040-NR, line 1z.

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

  2. If a claimed Treaty Exemption is determined to be invalid, take the following actions:

    1. Edit the exempted amount as taxable income on Form 1040-NR, line 1z, if not already entered by the taxpayer on line 1a or included in line 1z,

    2. "X" Form 1040-NR, line 1a, if the treaty exemption amount is present,

    3. "X" Form 1040-NR, line 1z, if the treaty exemption amount is claimed on any of lines 1b through 1h, and

    4. "X" Form 1040-NR, line 1k and/or Schedule 1, line 9 or 25, if exemption is included by the taxpayer.

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

  3. If taxpayer claims a Treaty Exemption that cannot be verified due to incomplete information, correspond.

  4. If Gambling Winnings are reported as effectively connected income on Form 1040-NR, page 1 or Schedule 1, take one of the following actions:

    1. Residents of Canada may claim gambling losses, but only to the extent of gambling winnings. They should report their total gambling winnings and losses (not to exceed winnings) on Schedule NEC, lines 10a and 10b. They should report net gambling winnings on Schedule NEC, line 10c. "X" the gambling winnings and losses if reported on any other line.

    2. Gambling winnings are tax exempt for residents of the following countries:

      Country
      Austria
      Belgium
      Bulgaria
      Czech Republic
      Denmark
      Finland
      France
      Germany
      Hungary
      Iceland
      Ireland
      Italy
      Japan
      Latvia
      Lithuania
      Luxembourg
      Netherlands
      Russian Federation (Russia)
      Slovak Republic (Slovakia)
      Slovenia
      South Africa
      Spain
      Sweden
      Tunisia
      Turkey
      Ukraine
      United Kingdom
      (including Great Britain, England, Northern Ireland, Scotland, and Wales)

      Caution:

      If a taxpayer is a resident of a country that is exempt from U.S. tax on gambling winnings, "X" entry where found.

    3. All other countries: "X" the amount and multiply the amount of gross gambling winnings by 30% and edit the result to line 23a, 1040-NR. Do not adjust or compute Form 1040-NR, line 24.

      Exception:

      Malta is taxed at 10%.

  5. If a taxpayer claims a foreign earned income exclusion (Form 2555, Form 2555-EZ (TY18 and prior), IRC 911, IRC 931, or IRC 933), "X" the exclusion and Form 2555 or Form 2555-EZ. Make sure that the foreign earned income is reported on the appropriate Form 1040-NR, lines 1a-8.

  6. Line 8r, "Scholarship and fellowship grants not reported on Form W-2," is a T-line. If there is an entry on this line, see IRM 3.21.3.84.19.9 for instructions.

  7. If taxpayer indicates IRC 893 or employee of foreign government or international organization, and exempts wages or salary compensation, verify that the taxpayer has provided the following information:

    1. Evidence of non-United States citizen status (e.g., a copy of their A or G visa or green card).

    2. Written evidence from the United States Citizenship and Immigration Services (USCIS) which confirms that the taxpayer has not signed and filed USCIS Form I-508 (Waiver of Certain Rights, Privileges, Exemptions, and Immunities).

      Note:

      An employee’s compensation is not eligible for exemption under IRC 893 if they have signed and filed the USCIS Form I-508.

    3. If an employee of a foreign government, a copy of the U.S. State Department IRC 893(b) certification.

      Note:

      If a taxpayer provides evidence in lieu of IRC 893(b) certification, accept the evidence if it establishes that the services rendered by the employee are similar to the services rendered by employees of the U.S. government in foreign countries, and that the foreign government grants an equivalent tax exemption to such U.S. government employees.

      Example:

      The taxpayer may provide a copy of a foreign statute or regulation that shows an equivalent tax exemption to U.S. government employees in that country.

    4. If an employee of an international organization, the number of the Presidential Executive Order. See Exhibit 3.21.3-4 for a list of those approved international organizations and foreign governments.

      Exception:

      The Executive Order number is not required if the international organization is listed in Exhibit 3.21.3-4.

      Note:

      IRC 893 does not apply to the North Atlantic Treaty Organization (NATO) or the Ottawa Agreement.

    5. If taxpayer has provided all the necessary information, follow the table below:

      If And Then
      Taxpayer exempts income on Schedule 1, line 9 Reports earned income Take no action.
      Taxpayer exempts income on Schedule 1, line 9 Does not report earned income (Form 1040-NR, line 1a) Edit earned income to Form 1040-NR, line 1a.
      Taxpayer exempts income on Form 1040-NR, line 1k Does not report earned income (Form 1040-NR, line 1a) or exemption amount (Schedule 1, line 9)
      • Edit earned income to Form 1040-NR, line 1a (if not present),

      • Edit the exempt income to Schedule 1, line 9 (if not present) as a negative amount, and

      • "X" Form 1040-NR, line 1k.

    6. If taxpayer has not provided all the necessary information, correspond.

  8. If the taxpayer claims a capital gains exemption under IRC 871, and they were present in the U.S. for less than 183 days during the tax year (see Schedule OI, Letter H or attachments for determination):

    1. Edit the capital gains to Form 1040-NR, line 7 (if not already included), and

    2. Edit the exempt amount to Schedule 1, line 9 as a negative amount (if not already included).

    Note:

    The instructions also apply if the number of days is blank.

  9. If the taxpayer claims a capital gains exemption under IRC 871, and they were present in the U.S. for 183 days or more during the tax year:

    1. Edit the capital gains to Form 1040-NR, line 7 (if not already included), and

    2. "X" Schedule 1, line 9.

  10. Under IRC 872(b)(3), compensation paid by a foreign employer to a nonresident alien individual present in the United States on an "F" , "J" , or "Q" visa while participating in certain exchange or training programs is exempt from tax. A "foreign employer" includes a nonresident alien individual, foreign partnership, or foreign corporation, or an office or place of business maintained in a foreign country or in a territory of the United States by a domestic corporation, a domestic partnership, or an individual who is a citizen or resident of the United States.

    If Then
    The taxpayer doesn't report the income Take no action.
    The taxpayer reports the income on any of the income lines and/or exempts it on Schedule 1, line 9 "X" the income and/or exemption where found.

  11. A Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) filed with a Form 1040-NR is taxable effectively connected income and should be reported on Schedule D or included on Schedule 1, line 9:

    1. If reported on other than Schedule D or Schedule 1, line 9, edit gross proceeds to Schedule 1, line 9.

    2. If Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) is attached and not reported on the return, edit gross proceeds to Schedule 1, line 9.

  12. Use the table below to determine action(s) for notations and/or other amounts included on Schedule 1, line 9:

    If the amount is identified as Then
    Dependent Care Benefits Move to Form 1040-NR, line 1z. Form 2441 must be attached. If missing, correspond for Form 2441.
    Disability Pension (Form 1099-R with Code 3 in box 7) Move to Form 1040-NR, line 1a.
    Indian Gaming Proceeds (IGP) Edit RPC "G" , if withholding is present
    Long-Term Care (LTC) Take no action.
    Medical Savings Account (MSA) Take no action.
    Nontaxable income:
    • Accident and health insurance proceeds

    • "Black Lung" benefits

    • Casualty insurance and other reimbursements

    • Child support

    • Damages awarded for physical injury or sickness

    • Federal Employees' Compensation Act (FECA) payments

    • Interest on state or local government obligations

    • Public aid

    • Supplemental Security Income (SSI)/SSI Disability

    • Tax-Sheltered Annuities

    • Temporary Assistance for Needy Families (TANF)

    • Veterans' Administration (VA) Benefits

    • Welfare Benefits/Payments

    • Workforce Payments

    • Workers' Compensation

    Adjust Form 1040-NR, line 1z to exclude nontaxable income.
Schedule 1, Line 8r - Scholarship and Fellowship Grants Not Reported on Form W-2
  1. Generally, a taxpayer’s entry on Schedule 1, line 8r should include only the amount of scholarship and fellowship grants not reported on Form W-2, reduced by any amount exempt by treaty and any amount used to pay for tuition and required, course-related expenses.

  2. Scholarship and fellowship income shown on Form W-2 should be reported on Form 1040-NR, line 1a. If it is determined this Form W-2 income is included in the line 8r entry:

    1. Edit the Form W-2 gross income to Form 1040-NR, line 1a, if not already included,

    2. Do not adjust or compute Form 1040-NR, line 9 or 11, and

    3. "X" or adjust the line 8r amount to exclude the income moved to Form 1040-NR, line 1a.

  3. If it can be determined that any amount of scholarship or fellowship grant reported on line 8r, from a Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) or a Form 1098-T, is exempt under a tax treaty (check Schedule OI, item L), take the following actions:

    1. Move the treaty-exempt grant to Form 1040-NR, line 1k, if not already included there,

    2. "X" or adjust the line 8r amount to exclude the treaty-exempt grant, and

    3. "X" the treaty exemption if found elsewhere on the return.

  4. One or more of the following documents must be attached to support an entry on line 8r. If missing, correspond:

    • Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) issued by a college or an educational institution

    • A statement from a college or an educational institution (on their letterhead) that states the amount of the grant, the grantor's name, the dates it covers, and the expenses the grant covers

    • Form 1098-T

  5. If at least one of the items in IRM 3.21.3.84.19.9 (4) above is present and EITHER there is still an amount on line 8r after following the above paragraphs OR there is a Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) issued by a college or an educational institution or a Form 1098-T attached to the return, where the income is not reported anywhere, follow the instructions in the table below:

    If And Then
    You calculate (1) minus (2) below by:
    1. Adding:

      • All Form 1042-S (Income Code 16) gross income, box 2 amounts,

      • All Form 1098-T scholarships or grants, box 5 amounts, and

      • All grant income from educational institution statements

    2. Subtracting:

      • All Form 1098-T payments received for qualified tuition and related expenses, box 1 amounts and

      • All tuition and required, course-related expenses (fees, books, supplies, equipment) from educational institution statements, receipts, etc.

    The amount calculated by adding all the items in (1) and then subtracting all the items in (2) is greater than the line 8r entry, including when line 8r is blank or zero Edit or adjust line 8r to equal the calculated amount.
Schedule 1, Line 9 - Total Other Income
  1. If the taxpayer exempts income on Schedule 1, Part I without providing a valid treaty, "X" Schedule 1, line 9.

  2. If Form 1099-MISC or Form 1099-NEC is attached and there is a clear indication that the income was not included on the return, edit the income to Schedule 1, line 9. Do not include the Form 1099-MISC or Form 1099-NEC amount on Schedule 1, line 9, when any of the following are attached:

    1. Schedule C

    2. Schedule E (Part II)

    3. Schedule F

    4. Form 2106

  3. If line 9 is blank, dash, zero, or illegible and there are any entries on lines 8a through 8z, compute and edit line 9 by adding lines 8a through 8z.

Schedule 1, Line 11 Dotted Portion - Form 982 Indicator
  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 11 - Educator Expenses
  1. Reserved

Schedule 1, Line 12 - Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials (Form 2106)
  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 13 - Health Savings Account Deduction (Form 8889)
  1. Form 8889 must be attached if an amount is being claimed on line 13. Correspond, if missing.

Schedule 1, Line 14 - Moving Expenses for Members of the Armed Forces (Form 3903)
  1. If an amount is present on Schedule 1, line 14 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Form 3903 (or similar statement) must be attached. If missing, correspond for Form 3903.

    Note:

    If the taxpayer is only claiming an expense for storage fees while out of the United States, Form 3903 is not required.

Schedule 1, Line 15 - Deductible Part of Self-Employment Tax
  1. Reserved

Schedule 1, Line 16 - Self-Employed SEP, SIMPLE, and Qualified Plans
  1. If Schedule C, Schedule E (Part II), or Schedule F is not attached, "X" line 16.

Schedule 1, Line 17 - Self-Employed Health Insurance Deduction
  1. Edit misplaced amount from line 17 to line 15 when both of the following conditions are present:

    • Line 15 is blank

    • Schedule SE is attached to the return

Schedule 1, Line 18- Penalty on Early Withdrawal of Savings
  1. Reserved

Schedule 1, Lines 19a, 19b, and 19c - Alimony Paid, Recipient’s TIN, and Date of Divorce
  1. Reserved

Schedule 1, Line 20 - IRA Deduction
  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Line 21 - Student Loan Interest Deduction
  1. Reserved

Schedule 1, Line 22
  1. Reserved

Schedule 1, line 23 - Archer MSA Deduction
  1. For complete instructions, see IRM 3.11.3.

Schedule 1, Lines 24a through 24z - Other Adjustments (Not Transcribed)
  1. If a claimed Treaty Exemption is determined to be valid (see IRM 3.21.3.84.8.6), but the taxpayer has entered, or included in a total, the income and/or exemption on Schedule 1, or on Form 1040-NR, lines 1a, 1z, or 2b-8, take the following actions:

    1. "X" the income and/or exemption on Schedule 1, line 9 or 25 (if included), and on Form 1040-NR, line 1a, 1z, or 2b-8 (as appropriate),

    2. Edit the allowable exemption amount on Form 1040-NR, line 1k, if not already entered by the taxpayer, and

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

    3. If the treaty is valid but the taxpayer has claimed more than the treaty allows, edit the allowable amount on Form 1040-NR, line 1k, if not already entered by the taxpayer. Ensure that the excess amount is reported on Form 1040-NR, lines 1a - 8; if not reported, edit the excess amount to Form 1040-NR, line 1z.

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

  2. If a claimed Treaty Exemption is determined to be invalid, take the following actions:

    1. Edit the exempted amount as taxable income on Form 1040-NR, line 1z, if not already entered by the taxpayer on line 1a or included in line 1z,

    2. "X" Form 1040-NR, line 1a, if the treaty exemption amount is present,

    3. "X" Form 1040-NR, line 1z, if the treaty exemption amount is claimed on any of lines 1b through 1h, and

    4. "X" Form 1040-NR, line 1k and/or Schedule 1, line 9 or 25, if exemption is included by the taxpayer.

      Note:

      Do not adjust or compute Form 1040-NR, line 9 or 11.

  3. If taxpayer claims a Treaty Exemption that cannot be verified due to incomplete information, correspond.

  4. Delete the following adjustments from Schedule 1, lines 11 through 23, and/or Form 1040-NR, line 10a, and ensure the amounts are included in the Schedule 1, line 25 total:

    • "403(b)" - contributions by certain chaplains to section 403(b) plans

    • "501(c)(18)(D)" - contributions to certain pension plans

    • "ED67(e)" - (TY18 and later) Excess Deductions of section 67(e) expenses from Form 1041 Schedule K-1

    • "Jury Pay" - jury duty pay

    • "PPR" - Personal Property Rental deductible expenses

    • "RFST" - Reforestation amortization and expenses

    • "Sub-Pay TRA" - repayment of Supplemental Unemployment Benefit (SUB) payments received in a prior year under the Trade Act of 1974 (TRA)

      Exception:

      "X" the SUB pay amount where found and subtract the amount from Form 1040, line 1a when there is no indication that the adjustment is for benefits received in a prior year.

    • "UDC" - legal fees for Unlawful Discrimination Claims

    • "USOC" - United States Olympic Committee-deduction for Olympic and Paralympic medals and prize money

    • "WBF" - Whistle Blower Fees

  5. If a taxpayer claims an adjustment to income on Schedule 1, line 24z for anything other than the items listed in (4) above, "X" line 25.

  6. If there is an amount on line 24z with no explanation present, "X" line 25.

Schedule 1, Line 25 - Total Other Adjustments
  1. If line 25 is blank, dash, zero, or illegible and there are any entries on lines 24a through 24z, compute and edit line 25 by adding lines 24a through 24z.

Schedule 1, Line 26 - Total Adjustments to Income
  1. For complete instructions, see IRM 3.11.3.

Form 1040-NR, Schedule 2 (Sequence 02) - Additional Taxes

  1. For TY20 and later, Schedule 2 may be attached to Form 1040-NR. See line-by-line instructions.

Schedule 2, Line 1 - Alternative Minimum Tax (Form 6251)
  1. If an amount is present and Form 6251 is not attached, correspond for Form 6251 unless the taxpayer notes "deferred minimum tax" .

Schedule 2, Line 2 - Excess Advance Premium Tax Credit Repayment (Form 8962)
  1. If an amount is claimed on line 2, Form 8962 must be present. Correspond, if missing.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A, if not attached, using paragraph "s" .

    2. When corresponding for Form 8962, on Form 9143, also correspond for Form 1095-A, if not attached, using the following literal: "Send a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive one or your Form 1095-A is incorrect, visit www.healthcare.gov or your state Marketplace website."

Schedule 2, Line 3 - Total
  1. Reserved

Schedule 2, Line 4 - Self-Employment Tax (Schedule SE)
  1. A Schedule SE is required if there is an amount on line 4. Dummy Schedule SE from Schedule C, Schedule E (Part II present), Schedule F, or attachments, if possible. Otherwise, correspond.

    Exception:

    Do not dummy Schedule SE if corresponding for other missing attachments. Instead, include the request for Schedule SE in the correspondence to the taxpayer.

  2. Edit FPC "S" if Schedule SE is attached or the taxpayer includes an entry on line 4.

Schedule 2, Line 7 - Total Additional Social Security and Medicare Tax (Form 4137 and Form 8919)
  1. For complete instructions, see IRM 3.11.3.

Schedule 2, Line 8 - Additional Tax on IRAs or Other Tax-Favored Accounts (Form 5329)
  1. Correspond for Form 5329 if an amount is present on line 8 and Form 5329 is not attached, unless any of the following conditions apply:

    1. The taxpayer has checked the box to the left of line 8.

    2. The taxpayer notates "No" to the left of line 8, or

    3. Line 8 has an entry that is 10% of any combination of the following:

    • Form 1040-NR, line 4b

    • Form 1040-NR, line 5b

    • Form 1099-R

  2. Edit RPC "3" if Form 5329 is not present and any of the conditions above apply.

  3. Edit the totals of Parts I through IX of Form(s) 5329 when line 8 is blank and Form 5329 is attached with entries present.

Schedule 2, Line 9 - Household Employment Taxes (Schedule H)
  1. If an amount is claimed on line 9, Schedule H must be attached. Correspond, if missing.

Schedule 2, Line 11 - Additional Medicare Tax (Form 8959)
  1. If an amount is present on line 11, Form 8959 must be attached. Correspond for Form 8959, if missing.

Schedule 2, Line 12 - Net Investment Income Tax (Form 8960)
  1. If an amount is present on line 12, Form 8960 must be attached. Correspond for Form 8960, if missing.

Schedule 2 Line 13 - Uncollected Social Security and Medicare or RRTA Tax on Tips
  1. UT/UTOT or COBRA is reported on Schedule 2, line 13. If found elsewhere on the return, delete where found and edit to line 13 or renumber to be line 13, as appropriate.

Schedule 2, Line 16 - Recapture of Low-Income Housing Credit (Form 8611)
  1. If Form 8611 is missing and the line 16 amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond for Form 8611.

Schedule 2, Lines 17a through 17z - Other Additional Taxes (Not Transcribed)
  1. For complete instructions, see IRM 3.11.3.

Schedule 2, Line 18 - Total Additional Taxes
  1. If line 18 is blank, dash, zero, or illegible and there are any entries on lines 17a through 17z, compute and edit line 18 by adding lines 17a through 17z.

Schedule 2, Line 19
  1. Reserved, except for TY21. See complete instructions in IRM 3.11.3.

Schedule 2, Line 20 - Section 965 Net Tax Liability Installment (Form 965-A)
  1. If an amount is present on line 20, and Form 965-A is missing, correspond for Form 965-A only if corresponding for other missing information.

  2. If an amount is present on line 20, edit RPC "F" .

    Note:

    If Form 965-A is attached and there is no entry on line 20, do not edit RPC "F" .

Schedule 2, Line 21 - Total Other Taxes
  1. Reserved

Form 1040-NR, Schedule 3 (Sequence 03) - Additional Credits and Payments

  1. For TY20 and later, Schedule 3 may be attached to Form 1040-NR. See line-by-line instructions.

Schedule 3, Line 1 - Foreign Tax Credit (Form 1116)
  1. If credit claimed is more than $300, Form 1116 or similar statement must be attached. If Form 1116 is missing, or if no significant amount is present on line 7, 8, 24, or 35, correspond for Form 1116.

  2. Taxpayers earning income in the following countries are not allowed to take a foreign tax credit for foreign taxes paid to these countries. If the taxpayer takes the foreign tax credit (see Form 1116, Part II, line 8) with respect to taxes paid to any of the following countries (see Form 1116, Part I, line i, columns A, B, and C), "X" both Form 1116, line 8 and Schedule 3, line 1.

    Country Starting Date Ending Date
    Iran January 1, 1987 Still in Effect
    North Korea January 1, 1987 Still in Effect
    Sudan February 12, 1994 Still in Effect
    Syria January 1, 1987 Still in Effect

Schedule 3, Line 2 - Credit for Child and Dependent Care Expenses (Form 2441)
  1. If an amount is claimed, Form 2441 must be attached. If missing, take one of the following actions:

    1. If a statement is attached, prepare a dummy Form 2441.

    2. Otherwise, correspond.

Schedule 3, Line 3 - Education Credits (Form 8863, Line 19)
  1. Line 3 is not a valid line with Form 1040-NR. If Form 8863 is attached, "X" Form 8863.

Schedule 3, Line 4 - Retirement Savings Contributions Credit (Form 8880)
  1. Correspond for Form 8880 if an amount is claimed on line 4 and Form 8880 is not present.

Schedule 3, Line 5a - Residential Clean Energy Credit (Form 5695, Line 15)
  1. If an amount is claimed on line 5a, Form 5695 must be attached. If missing, correspond for Form 5695.

    Note:

    If an amount is claimed on line 5a and only pages 2 and/or 3 of the Form 5695 are attached, "X" the amount on line 5a.

Schedule 3, Line 5b - Energy Efficient Home Improvement Credit (Form 5695, Line 32)
  1. If an amount is claimed on line 5b, Form 5695 must be attached. If missing, correspond for Form 5695.

    Note:

    If an amount is claimed on line 5b and only pages 1 and/or 2 of the Form 5695 are attached, "X" the amount on line 5b.

Schedule 3, Lines 6a through 6z - Other Nonrefundable Credits
  1. For complete instructions, see IRM 3.11.3.

    Exception:

    Line 6d is not a valid line with Form 1040-NR. If Schedule R is attached, "X" Schedule R.

Schedule 3, Line 6f - Clean Vehicle Credit
  1. For TY23 and later, if there is an amount on line 6f, at least one Form 8936 Schedule A must be attached. If missing, correspond for Form 8936 Schedule A.

    Note:

    For TY23 and later, do not correspond for Form 8936.

Schedule 3, Line 6m - Credit for Previously Owned Clean Vehicles
  1. For TY23 and later, if there is an amount on line 6m, at least one Form 8936 Schedule A must be attached. If missing, correspond for Form 8936 Schedule A.

    Note:

    For TY23 and later, do not correspond for Form 8936.

Schedule 3, Line 7 - Total Other Nonrefundable Credits
  1. If line 7 is blank, dash, zero, or illegible and there are any entries on lines 6a through 6z, compute and edit line 7 by adding lines 6a through 6z.

Schedule 3, Line 9 - Net Premium Tax Credit (Form 8962)
  1. If an amount is claimed on Schedule 3, line 9, Form 8962 must be attached. If missing, correspond.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A, if not attached, using paragraph "s" .

    2. When corresponding for Form 8962, on Form 9143, also correspond for Form 1095-A if not attached, using the following literal: "Send a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive one or your Form 1095-A is incorrect, visit www.healthcare.gov or your state Marketplace website."

Schedule 3, Line 10 - Amount Paid with Request for Extension to File (Form 4868)
  1. Do not perfect line 10 from an attached Form 4868. If the taxpayer indicates a payment from Form 2350, include this amount on line 10.

Schedule 3, Line 11 - Excess Social Security and Tier 1 RRTA Tax Withheld
  1. If it appears that ALL Social Security and RRTA tax withheld is claimed, "X" the amount on line 11.

    Note:

    Taxpayers having more than one employer may claim a credit for excess Social Security withholding, see IRM 3.11.3.

  2. If it is obvious that the taxpayer has a "F" , "J" , "M" , or "Q" Visa and Form 843 is attached, "X" line 11. Detach Form 843, and route it to Accounts Management.

    Note:

    When detaching Form 843, also detach Form 8316. These forms must be kept together.

  3. If it is obvious that the taxpayer has a "F" , "J" , "M" , or "Q" Visa and Form 843 is not attached:

    1. "X" the amount on line 11,

    2. Correspond by preparing Form 3696-A to send Letter 513C,

    3. Edit Action Trail "513C" on Form 1040-NR, and

    4. Continue processing the return.

Schedule 3, Line 12 - Credit for Federal Tax on Fuels (Form 4136)
  1. Correspond for Form 4136 if any amount is claimed and Form 4136 is not attached.

Schedule 3, Line 13a - Form 2439
  1. When the amount claimed on line 13a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 2439 is not attached, correspond for Form 2439.

    Note:

    Form 2439 is a small form and is generally found stapled to the front of the return with Form(s) W-2.

  2. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13b - Credit for Repayment of Earlier Year Income
  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13c - Elective Payment Election (EPE) (Not Transcribed)
  1. For complete instructions, see IRM 3.11.3.

Schedule 3, Line 13z - Other Payments or Refundable Credits (Not Transcribed)
  1. Correspond for an explanation when the amount claimed on line 13z is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the type of credit is not identified.

    Exception:

    If taxpayer cites IRC Section 1341 or "Claim of Right" , do not correspond for documentation. See IRM 3.11.3.6.1.6.(6).

Schedule 3, Line 14 - Total Other Payments or Refundable Credits
  1. If line 14 is blank, dash, zero, or illegible and there are any entries on lines 13a through 13z, compute and edit line 14 by adding lines 13a through 13z.

Form 1040-NR, Schedule A (Sequence 7A) - Itemized Deductions

  1. The following are the T-lines and T-Compute lines for Schedule A (Form 1040-NR):

    T-Lines T-Compute Lines
    • Line 1a

    • Lines 2 through 8

    • Line 5

    • Line 8

  2. "X" Schedule A (Form 1040-NR) if all of the following conditions exist:

    • Schedule A (Form 1040-NR) has no T-line entries present or edited,

    • Schedule NEC has no T-line entries present or edited, and

    • Schedule OI has no T-line boxes marked.

  3. If the taxpayer claims a valid treaty exemption, exclusion, or deduction on Schedule A (Form 1040-NR), take the following actions (see Figure 3.21.3-34):

    1. "X" the amount entered on Schedule A,

    2. Edit the allowable exemption on Form 1040-NR, line 1k, and follow line 1k procedures.

      Note:

      Do not "X" , adjust, or compute Schedule A, line 8.

    Figure 3.21.3-34

    This is an Image: 34010034.gif

    Please click here for the text description of the image.

  4. If taxpayer claims an invalid treaty exemption, "X" where found.

    Note:

    Do not "X" or recompute line 8.

  5. Gambling losses cannot be deducted on Schedule A; "X" where found.

    Note:

    Do not "X" or recompute line 8.

  6. If a resident of India can be determined to be a student or business apprentice using the Form 1040-NR occupation area; Schedule OI, lines E and F (visa J-1, F-1, or H-1 that was previously F-1); Form 8843 with entries in Part III; or from other attachments; and:

    If Then
    Both itemized and standard deductions are present on Schedule A "X" the lesser amount of the deductions. See Figure 3.21.3-35.

    Note:

    Do not adjust line 8.

    Itemized deductions on Schedule A are less than the standard deduction claimed on Form 1040-NR, line 12 "X" the itemized deductions where found, and edit the standard deduction to line 7.

    Note:

    Do not adjust line 8.

    Schedule A is blank or not attached and a standard deduction from the table below is claimed on Form 1040-NR, line 12 Dummy Schedule A, and edit the 1040-NR, line 12 amount on lines 7 and 8.

    Figure 3.21.3-35

    This is an Image: 34010035.gif

    Please click here for the text description of the image.

    Filing Status Standard Deduction Additional Standard Deduction 1 (65+ or Blind) Additional Standard Deduction 2 (65+ or Blind) Additional Standard Deduction 3 (65+ or Blind) Additional Standard Deduction 4 (65+ or Blind)
    1 $13,850 $15,700 $17,550 N/A N/A
    3 $13,850 $15,350 $16,850 N/A N/A
    5 $27,700 $29,200 $30,700 N/A N/A

  7. If a resident of a country other than India OR a resident of India that is not a student or business apprentice claims the standard deduction, "X" line 1a, 7, or where found on Schedule A, Form 1040-NR.

    Note:

    Do not "X" line 8

    .

  8. If a Schedule A (Form 1040) is attached to a Form 1040-NR, dummy a Schedule A (Form 1040-NR) from the attached Schedule A (Form 1040). Transfer the amounts as follows:

    From Schedule A, Form 1040 (Sequence 07) To Schedule A, Form 1040-NR (Sequence 7A)
    Line 4 Line 7
    Line 5d Line 1a
    Line 6 Line 7
    Line 10 Line 7
    Line 11 Line 2
    Line 12 Line 3
    Line 13 Line 4
    Line 14 Line 5
    Line 15 Line 6
    Line 16 Line 7
    Line 17 Line 8

Line 1a - State and Local Income Tax Total
  1. If the standard deduction is claimed on line 1a, see IRM 3.21.3.84.22.

Line 2 - Gifts by Cash or Check
  1. When two entries are present on line 2 and "See Note" is present in the line 2 area, do not compute the entries. "X" the line 2 amount located directly to the left of "See Note" .

Line 3 - Contributions Other Than Cash
  1. If more than $500 is claimed on Schedule A, line 3, Form 8283 with significant entries or a supporting statement must be present. If missing, correspond for Form 8283.

  2. When Form 8283 with significant entries or a supporting statement is present, and the amount on Schedule A, line 3 is more than $500, edit RPC "H" .

  3. If Schedule A, line 3 is more than $500 and Form 8283 indicates the taxpayer has donated an automobile, airplane, or boat, Form 1098-C must also be present. If Form 1098-C is not attached, "X" Schedule A, line 3.

    Note:

    In lieu of Form 1098-C, the taxpayer may attach a similar statement provided it includes all the same information as on Form 1098-C. If the statement does not include all this information, "X" Schedule A, line 3.

  4. If Schedule A, line 3 is more than $500,000, Form 8283, Parts IV and V must be completed, and a separate qualified appraisal must be attached. If all these conditions are met, edit RPC "4" . If all these conditions are not met, correspond.

  5. If Form 8283 is present and Part I, checkbox 2b is marked, checkbox 2b(1) is marked, or line 3, column (h) contains a value other than zero, edit Audit Code "C" .

  6. If Schedule A, line 3 is $20,000 or more, and Form 8283, Part I, checkbox 2a is marked, a separate qualified appraisal must be attached. If a qualified appraisal is not attached, correspond. Use the following literal: "If your total deduction for Art is $20,000 or more, you must attach a complete copy of the signed appraisal."

Line 4 - Carryover Contributions
  1. Delete the line 4 amount if the taxpayer has used line 4 as a subtotal line.

Line 5 - Total Contributions
  1. Compute and edit line 5 when it is blank and there are entries leading to a total, unless See Note is present above line 5 or the taxpayer notates "Limited" or similar statement.

Line 6 - Casualty and Theft Losses
  1. If an amount is claimed, Form 4684 must be attached. If missing, correspond for Form 4684.

Line 7 - Other Itemized Deductions
  1. The following are to be included on line 7:

    • Casualty and theft loss from income producing property

    • Impairment-related work expenses of a disabled person

    • Unrecovered investments in a pension

    • Schedule K-1 (amounts reported as itemized deductions from Box 13, Code W, on a partner’s K-1, or amounts reported as itemized deductions from Box 12, Code S, on a shareholder’s K-1)

    • Repayments under claim of right ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      .

    Note:

    Gambling losses cannot be deducted on Schedule A; "X" where found.

  2. "X" line 7 if any miscellaneous deductions are not listed in IRM 3.21.3.84.22.7 (1) above.

    Note:

    Do NOT"X" line 7 when the taxpayer includes an amount but does not include an explanation for the deduction.

Line 8 - Total Itemized Deductions
  1. Compute and edit line 8 if it is blank, dash, zero, or illegible and there are entries leading to a total.

    Exception:

    Do not adjust or compute line 8 if adjusting lines 1a through 7.

Form 1040-NR, Schedule NEC (Sequence 7B) - Tax on Income Not Effectively Connected With a U.S. Trade or Business

  1. The following are the T-Lines and T-Compute Lines for Schedule NEC of Form 1040-NR.

    T-Lines T-Compute Lines
    • Column d (both columns at Nature of Income line)

    • Line 13, column (a)

    • Line 13, column (b)

    • Line 13, column (c)

    • Line 13, column (d) - columns 1 and 2

    • Line 13, column (a)

    • Line 13, column (b)

    • Line 13, column (c)

    • Line 13, column (d) - columns 1 and 2

  2. "X" Schedule NEC if all of the following conditions exist:

    • Schedule A (Form 1040-NR) is missing,

    • Schedule NEC has no T-line entries present or edited, and

    • Schedule OI has no T-line boxes marked.

  3. Income not effectively connected with a U.S. trade or business is reported on Schedule NEC.

  4. Income from the following forms is not effectively connected:

    1. Social Security/Railroad Retirement Form SSA-1042S and Form RRB-1042S - For processing instructions, see IRM 3.21.3.83.11.

    2. Gambling winnings (Form 1042-S, Income Code 28 or 23) - For processing instructions, see IRM 3.21.3.84.23.1.

      Note:

      Professional gambling is considered effectively connected income; see exception at IRM 3.21.3.84.23.1 (1).

    Note:

    Real property may be treated as effectively connected income if reported on Schedule E and Schedule 1.

  5. To determine the country in which the filer is a tax resident, review:

    1. Schedule OI, taxpayer response to Question B, Question A, caption or attachments.

    2. If country of tax residence cannot be determined, correspond.

  6. Income not effectively connected is taxed at a rate of 30% unless a U.S. tax treaty with the filer's country of tax residency prescribes a lower rate.

    1. If the taxpayer enters a rate lower than 30%, verify the rate entered using Exhibit 3.21.3-9.

    2. Edit the total correct amount to Form 1040-NR, line 23a. Do not adjust or compute line 24.

    3. If the filer uses a higher rate than the one indicated in Exhibit 3.21.3-9, accept the taxpayer's figure.

  7. A taxpayer who is a tax resident of a foreign country with which the U.S. has not concluded an income tax treaty is generally taxed at a flat rate of 30% on his U.S. source not effectively connected income.

  8. Schedule NEC, line 15 should equal Form 1040-NR, line 23a. If amounts are present on Schedule NEC and no amount is present on Form 1040-NR, line 23a, compute and edit the line 23a amount. Do not adjust or compute line 24.

Gambling Winnings
  1. Gambling winnings are non-effectively connected income.

    Exception:

    Professional gambling income is effectively connected and is reported on Schedule 1, page 1 with supporting Schedule C for TY19 and later, or on Form 1040-NR, page 1 with supporting Schedule C prior to TY19.

  2. Gambling winnings are not reducible by gambling losses.

    Exception:

    Residents of Canada are allowed to claim gambling losses up to winnings.

  3. Gambling income won in the U.S. by residents of the following foreign countries is not taxable by the U.S.:

    1. Austria

    2. Belgium

    3. Bulgaria

    4. Czech Republic

    5. Denmark

    6. Finland

    7. France

    8. Germany

    9. Hungary

    10. Iceland

    11. Ireland

    12. Italy

    13. Japan (effective 2005)

    14. Latvia

    15. Lithuania

    16. Luxembourg

    17. Netherlands

    18. Russian Federation (Russia)

    19. Slovak Republic (Slovakia)

    20. Slovenia

    21. South Africa

    22. Spain

    23. Sweden

    24. Tunisia

    25. Turkey

    26. Ukraine

    27. United Kingdom (including Great Britain, England, Northern Ireland, Scotland, and Wales)

      Note:

      Gambling income won in the U.S. by residents of Malta is taxed at 10%.

      Reminder:

      If Form 1040-NR, line 11 is blank, dash, or zero, or edited to be blank and Form 1040-NR, line 23a is significant, edit RPC "J" .

  4. Residents of Canada may claim gambling losses, but only to the extent of gambling winnings.

    1. The net gambling income (winnings minus losses), which is taxed at 30%, should be on Schedule NEC, line 10c, column (c). If the taxpayer has not entered 30% of the net gambling income on Form 1040-NR, line 23a, edit 30% of their net gambling income to line 23a.

    2. If the taxpayer does not claim losses, edit 30% of their gross winnings on Form 1040-NR, line 23a.

    Note:

    Do not calculate gambling losses if the taxpayer has not reported losses on their tax return.

    Caution:

    When determining if a taxpayer is a resident of Canada, do not use the address in the caption. The country of residence should be determined by Schedule OI, questions B and/or A or Form 1040-NR-EZ, page 2. Additionally, refer to the 1042-S payee address and country identification.

  5. If a taxpayer is not a resident of Canada and tries to reduce gambling winnings by gambling losses, multiply the gross winnings by 30% and edit the result to Form 1040-NR, line 23a. Do not adjust or compute line 24. All countries not listed in IRM 3.21.3.84.23.1 (3) are taxed at a rate of 30%, except Malta which is taxed at 10%.

  6. If gambling winnings are reported on Schedule 1, page 1 or on Form 1040-NR, page 1, "X" the amount where found, and

    1. Multiply the amount of gross gambling winnings by 30%,

    2. Edit the result to Form 1040-NR, line 23a, and

    3. Do not adjust or compute line 24. See Figure 3.21.3-36.

    Exception:

    If a country is exempt from U.S. tax on gambling winnings, "X" income where found.

    Exception:

    Professional gambling income is effectively connected and is reported on Schedule 1, page 1 with supporting Schedule C for TY19 and later, or on Form 1040-NR, page 1 with supporting Schedule C prior to TY19.

  7. If Schedule C is attached to the return to report gambling winnings and gambling losses:

    1. If exempt from U.S. tax, "X" Schedule C. Do not edit a tax amount to Form 1040-NR, line 23a.

    2. If not exempt from U.S. tax, "X" Schedule C. Multiply the gross gambling winnings by 30%, and edit the result to Form 1040-NR, line 23a. Do not adjust or compute line 24.

      Exception:

      For residents of Canada, see IRM 3.21.3.84.23.1 (4).

  8. Withholding from Form 1042-S for gambling winnings should be reported on Form 1040-NR, line 25g. If reported on any other line, edit or arrow to line 25g.

    Caution:

    Withholding from gambling winnings is not always reported on a "standard-format" Form 1042-S; casinos often issue Form 1042-S in a format that looks like a commercial-type receipt. If a taxpayer provides a Form 1042-S in receipt-format as support for withholding on Form 1040-NR, line 25g, accept the receipt if issued by a business if it includes the date, recipient information, the amount of gambling winnings, and the amount of tax withheld. See Exhibit 3.21.3-17 for a sample.

    Figure 3.21.3-36

    This is an Image: 34010036.gif

    Please click here for the text description of the image.

Alimony
  1. If alimony income is being reported on Schedule NEC, consider it not effectively connected income; calculate the tax using the Pensions and Annuities tax rate indicated in Exhibit 3.21.3-9.

  2. If the taxpayer has reported alimony income received on Form 1040-NR, line(s) 1a through 7, or Schedule 1, lines 1 through 7, edit the entry to Schedule 1, line 9.

Awards and Prizes
  1. Awards and prizes are not effectively connected income and are reported on Schedule NEC and all countries are taxed at 30%.

Schedule NEC Column (d)1 - Other (specify)
  1. The percentage column labeled Other (specify) must be edited if an amount is present or edited to line 13(d)1. Edit the column with the three-digit number obtained by multiplying the taxpayer's percentage by 10 (use a leading zero if necessary). See Figure 3.21.3-37. For example:

    If the taxpayer enters: Edit:
    9% 090
    20% 200
    27.5% 275

    Note:

    If the taxpayer enters 0 percent (%), exempt, none, N/A, or does not indicate a percentage, edit "000" above column (d)1.

  2. If the taxpayer enters the percent in the column "Other (specify)" as:

    1. 10%, edit amount from 13(d)1 to 13(a)

    2. 15%, edit amount from 13(d)1 to 13(b)

    3. 30%, edit amount from 13(d)1 to 13(c)

    Figure 3.21.3-37

    This is an Image: 34010037.gif

    Please click here for the text description of the image.

Schedule NEC Column (d)2 - Other (specify)
  1. The percentage column labeled Other (specify) must be edited if an amount is present or edited to line 13(d)2. Edit the column with the three-digit number obtained by multiplying the taxpayer's percentage by 10 (use a leading zero if necessary). See Figure 3.21.3-37. For example:

    If the taxpayer enters: Edit:
    9% 090
    20% 200
    27.5% 275

    Note:

    If the taxpayer enters 0 percent (%), exempt, none, N/A, or does not indicate a percentage, edit "000" above column (d)2.

  2. If the taxpayer enters the percent in the column "Other (specify)" as:

    1. 10%, edit amount from 13(d)2 to 13(a)

    2. 15%, edit amount from 13(d)2 to 13(b)

    3. 30%, edit amount from 13(d)2 to 13(c)

Line 13 Column (a) 10% - Total U.S. Tax Withheld At Source
  1. Compute and edit if blank and there are entries leading to a total.

Line 13 Column (b) 15% - Total U.S. Tax Withheld At Source
  1. Compute and edit if blank and there are entries leading to a total.

Line 13 Column (c) 30% - Total U.S. Tax Withheld at Source
  1. Compute and edit if blank and there are entries leading to a total.

Line 13 Column (d)1 Other % - Total U.S. Tax Withheld at Source
  1. Compute and edit if blank and there are entries leading to a total.

    Reminder:

    If an amount is present or edited to line 13 column (d)1, the corresponding column percentage must be edited.

Line 13 Column (d)2 Other % - Total U.S. Tax Withheld at Source
  1. Compute and edit if blank and there are entries leading to a total.

    Reminder:

    If an amount is present or edited to line 13 column (d)2, the corresponding column percentage must be edited.

Form 1040-NR, Schedule OI (Sequence 7C) - Other Information

  1. The following are the T-Lines and T-Compute Lines for Schedule OI of Form 1040-NR.

    T-Lines T-Compute Lines
    Line M1 box There are no T-Compute lines
    Line M2 box  

  2. "X" Schedule OI when all of the following conditions exist:

    • Schedule A (Form 1040-NR) is missing,

    • Schedule NEC is missing, and

    • Schedule OI has no T-line boxes marked.

Dual-Status Returns

  1. The following subsections discuss processing returns of taxpayers claiming Dual-Status.

Dual-Status - General Instructions

  1. A taxpayer who is a resident alien and a nonresident alien in the United States within the same tax year files a Dual-Status tax return. This condition usually occurs in the year of arrival in the U.S. or year of departure from the U.S. The taxpayer will file Form 1040 with a Form 1040-NR or Form 1040-NR-EZ attached, or Form 1040-NR or Form 1040-NR-EZ with a Form 1040 attached for the tax year based on the place of the taxpayer's residence on the last day of the year.

    1. The taxpayer files Form 1040 with a Form 1040-NR or Form 1040-NR-EZ attached if they are a resident of the U.S. on the last day of the year.

    2. The taxpayer files Form 1040-NR or Form 1040-NR-EZ with a Form 1040 attached if they are NOT a resident of the U.S. on the last day of the year.

    3. Follow the intent of the taxpayer, and process the return that is identified as the "Dual-Status Return" if there is an indication they entered or left the United States in December. See Schedule OI, question "G" or Form 1040-NR-EZ, page 2, question "G" .

  2. Effectively Connected Income earned in the U.S. by a nonresident alien is taxed at normal U.S. rates, but special restrictions apply to deductions and filing status.

  3. Non Effectively Connected Income - Annuities, dividends, interest, capital gains, rents, and royalties from U.S. sources received while the taxpayer is a nonresident alien are taxed at a rate of 30%, or lower, depending on any treaty rate which might have been established with the country involved. See Exhibit 3.21.3-9.

  4. IRC 6013(g) and IRC 6013(h) - The taxpayer can elect to file a Married Filing Jointly (FS "2" ) return and report worldwide income under IRC 6013(g) or IRC 6013(h). If a taxpayer chooses this election, DO NOT PROCESS AS DUAL-STATUS. To qualify under 6013(g) or 6013(h), one taxpayer must be a U.S. resident alien or U.S. citizen. These taxpayers are not allowed to claim tax treaty benefits.

  5. Article XXV of the U.S.–Canada Income Tax Treaty - see IRM 3.21.3.83.5.

  6. Foreign Earned Income Exclusion - Dual-Status taxpayers are allowed a Foreign Earned Income Exclusion on the portion of their income reported on the Form 1040 in accordance with the rules of Form 2555 and Form 2555-EZ (TY18 and prior) regarding number of days, etc.

Restrictions for Dual-Status Taxpayers

  1. Dual-Status taxpayer restrictions are listed below:

    1. Dual-Status taxpayers cannot file as Married Filing Jointly (FS "2" ).

    2. Dual-Status taxpayers cannot file as Head of Household (FS "4" ).

    3. Dual-Status taxpayers cannot claim the standard deduction/additional standard deduction.

      Exception:

      Taxpayers who are students or business apprentices from India are eligible to claim the standard deduction under "Article 21(2)" of the United States - India treaty.

    4. Dual-Status taxpayers cannot claim Education Credits. If the taxpayer claims the education credit, "X" where found and "X" Form 8863, if attached.

    5. Dual-Status taxpayers cannot claim the Recovery Rebate Credit (RRC). If the taxpayer claims the RRC, "X" where found.

Processing Dual-Status Returns

  1. If a taxpayer has identified Form 1040, Form 1040-NR, or Form 1040-NR-EZ as a "Dual-Status Return," then a "Dual-Status Statement" must be attached (see IRM 3.21.3.85.3 (3) below). If the "Dual-Status Statement" or "Dual-Status Return" is missing, correspond.

    Note:

    When using Form 13900 to correspond for Form 1040 as the missing "Dual-Status Return," edit CCC "Y" instead of CCC "E" on Form 1040-NR "Dual Status Statement."

  2. When corresponding for the "Dual-Status Return," code the "Dual-Status Statement" as the controlling document.

    Note:

    When using Form 13900 to correspond for Form 1040 as the missing "Dual-Status Return," edit CCC "Y" instead of CCC "E" on Form 1040-NR "Dual-Status Statement."

  3. The "Dual-Status Statement" can be either Form 1040, Form 1040-NR, Form 1040-NR-EZ, or a statement.

    Example:

    When a Dual-Status taxpayer is a U.S. resident on the last day of the year, their statement should include the income for the part of the year they were a nonresident.

  4. Use information from Schedule OI questions, Form 1040-NR-EZ, page 2 questions, attached statement, or elsewhere on return to determine which return is the controlling document to be processed.

    Exception:

    If Form 8854, Initial and Annual Expatriation Statement, is attached:
    • If unnumbered return and there is no LB&I stamp indicating LB&I reviewed the return, stop coding, and route the entire return to Stop 4301 AUSC.
    • If unnumbered return and there is an LB&I stamp indicating LB&I reviewed the return, edit Audit Code "K" , and continue processing as normal.
    • If numbered, edit Audit Code "K" . Process the return as a "Dual-Status" return when the taxpayer indicates that they were in or outside of the U.S. for 365 or 366 days, and identifies the Form 1040-NR as a "Dual Status Return" .

    Caution:

    If the taxpayer indicates presence in the U.S. for 365 or 366 days, fully code Form 1040 as international and "X" the Form 1040-NR or Form 1040-NR-EZ. If the taxpayer indicates presence outside the U.S. for 365 or 366 days (present in the U.S. for 0 days), fully code Form 1040-NR or Form 1040-NR-EZ and "X" the Form 1040. Ensure that all income is reported on the form that is being processed; do not follow any other Dual Status instructions. Rebatch following local procedures.

    1. If the taxpayer is a U.S. resident at the end of the year, Form 1040 is to be processed. If the taxpayer is a nonresident at the end of the year, Form 1040-NR or Form 1040-NR-EZ is to be processed. Follow the intent of the taxpayer and process the return that is identified as the "Dual-Status Return" if there is an indication they entered or left the United States in December.

    2. If unable to determine which return to process from the Schedule OI questions of Form 1040-NR, page 2 questions of Form 1040-NR-EZ, an attached statement, or elsewhere on the return, process the return that is identified by the taxpayer as the "Dual-Status Return."

    3. If unable to determine which return should be processed using (a) or (b) above, correspond for dual-status dates.

  5. In general, dual-status taxpayers may be eligible for treaty benefits only with respect to income received during the period that they were nonresident aliens. The amount of income exempt by a tax treaty and the treaty article under which an exemption is claimed must be reported and validated on Form 1040-NR or Form 1040-NR-EZ. Additionally, a Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), may need to be filed with the Form 1040-NR or Form 1040-NR-EZ.

    Note:

    Resident Aliens may be entitled to treaty benefits with respect to certain categories of income (students, apprentices, trainees, teachers, professors, and researchers)

    .
    1. Validate the treaty using Exhibit 3.21.3-10.

    2. If the Form 1040 is the controlling document, see IRM 3.21.3.85.4.

    3. If the Form 1040-NR or Form 1040-NR-EZ is the controlling document, see IRM 3.21.3.85.5.

  6. Accept the taxpayer's signature on either the Form 1040, or Form 1040-NR or Form 1040-NR-EZ, regardless of which return is the controlling document.

Processing Form 1040 Dual-Status Returns

  1. The taxpayer is permitted to use Form 1040-NR, Form 1040-NR-EZ, or a statement (showing income for the part of the year they were a nonresident) as a "Dual-Status Statement." If necessary, edit data from the "Dual-Status Statement" to perfect the Form 1040 return.

  2. Edit "D/S" in the upper-center margin.

  3. Edit RPC "1" , RPC "B" , and CCC "Y" .

  4. The Filing Status Code (FSC) can be "1" , "3" , "5" , or "6" .

    Caution:

    Taxpayers can elect to file a Married Filing Jointly (FS 2) return and report worldwide income under IRC 6013(g) or IRC 6013(h). However, if a taxpayer chooses this election, DO NOT PROCESS AS DUAL-STATUS; process the return as a Form 1040. To qualify under 6013(g) or 6013(h), one taxpayer must be a U.S. resident alien or U.S. citizen. These taxpayers are not allowed to claim tax treaty benefits unless they are residents of India (students/business apprentices).

    1. Use the following table to edit the correct Filing Status Code (FSC) on Form 1040:

      FS Box Marked on 1040 And Then
      Single   Edit FSC "1" .
      Married filing jointly Taxpayers are students/business apprentices from India Take the following actions:
      1. Edit FSC "6" .

      2. Ensure that there is only one name in the caption area.

      Married filing jointly Taxpayer elects to file a Married Filing Jointly return and report worldwide income under IRC § 6013(g) or IRC 6013(h) DO NOT PROCESS AS Dual-Status. Follow instructions to process Form 1040 and "X" Form 1040-NR.
      Married filing jointly Only one of the taxpayers has income and criteria above are not met Edit FSC "6" , and circle out the name of the taxpayer that has no income. See Figure 3.21.3-38.
      Married filing jointly Both taxpayers have income and criteria above are not met Correspond for separate returns. See Figure 3.21.3-39.
      Married filing separately (MFS) Spouse is not claimed as a dependent Edit FSC "3" .
      Married filing separately (MFS) Spouse is claimed as a dependent Edit FSC "6" .
      Head of household (HOH)   Edit FSC "3" . Do not allow claim for dependent spouse.
      Qualifying surviving spouse (QSS) No spousal date of death, or date of death was within the two years before the tax year of the return Edit FSC "5" .
      Qualifying surviving spouse (QSS) Spousal date of death was more than two years before the tax year of the return Edit FSC "1" .
      If none of the above scenarios apply   Edit FSC "1" .

    Figure 3.21.3-38

    This is an Image: 34010038.gif

    Please click here for the text description of the image.

    Figure 3.21.3-39

    This is an Image: 34010039.gif

    Please click here for the text description of the image.

  5. Code all dependents to the correct dependent position. For complete instructions, see IRM 3.11.3.

  6. Edit a Received date, if required. See IRM 3.21.3.8.

  7. If the standard deduction is claimed, leave an action trail indicating a dual-status taxpayer claiming standard deduction "D/S SD" .

    Exception:

    Taxpayers who are students or business apprentices from India are eligible to claim the standard deduction under Article 21(2) of the United States - India Treaty.

  8. Include total tax withheld and the amounts from the attached "Dual-Status Statement" (Form 1040-NR, lines 25d - 25g, or Form 1040-NR-EZ, lines 18a - 18b) on Form 1040, line 25d.

  9. Combine all related T-Line amounts.

    Reminder:

    Add all T-Line amounts together from both forms and watch for amounts that are identical and may have already been transferred by the taxpayer.

    Exception:

    If taxpayer's entries are identical on both Form 1040 and Form 1040-NR or Form 1040-NR-EZ, do not combine the figures from the two returns. See Figure 3.21.3-40.

    Figure 3.21.3-40

    This is an Image: 34010040.gif

    Please click here for the text description of the image.

  10. If treaty income is reported on Form 1040-NR or Form 1040-NR-EZ:

    1. Do not include valid treaty income exclusion on Form 1040.

    2. If tax treaty is not valid, ensure that the income is reported on the appropriate line of Form 1040.

  11. If the treaty exclusion is claimed on Form 1040 or Schedule 1, "X" the treaty exclusion.

  12. Edit tax on not effectively connected income from line 23a, Form 1040-NR to dotted portion of line 24, Form 1040.

  13. Edit or combine T-line amounts from Schedule A, Form 1040-NR to Schedule A, Form 1040. Transfer the amounts as follows:

    From Schedule A, Form 1040-NR (Sequence 7A) To Schedule A, Form 1040 (Sequence 07)
    Line 1a Line 5a
    Line 1b Line 7
    Line 2 Line 11
    Line 3 Line 12
    Line 4 Line 13
    Line 5 Line 14
    Line 6 Line 15
    Line 7 Line 16
    Line 8 Line 17

  14. Process the return using Form 1040 line-by-line instructions and the transcribed forms and schedules instructions.

    Exception:

    Taxpayers may not claim the Recovery Rebate Credit (RRC) on Dual-Status returns. If an amount for RRC is present on a Dual-Status return, "X" it.

    Caution:

    If multiple forms and schedules are attached, determine whether they are duplicates or multiples by comparing amounts with entries on Form 1040. If duplicates are attached, perfect the forms or schedules that support the Form 1040 and "X" all duplicates.

  15. Dual-status taxpayers are allowed to claim the Foreign Earned Income Exclusion, Housing Deduction and Housing Exclusion on the Form 1040 portion of their income using a valid Form 2555 or Form 2555-EZ (TY18 and prior).

  16. "X" Form 1040-NR or Form 1040-NR-EZ. Ensure that Form 1040 is the top document in the return package.

Processing Form 1040-NR and Converted Form 1040-NR-EZ Dual-Status Returns

  1. If Form 1040-NR-EZ is the "Controlling Document," convert to Form 1040-NR before combining with the "Dual-Status Statement."

  2. The taxpayer is permitted to use Form 1040, Form 1040A (TY17 and prior), Form 1040EZ (TY17 and prior), or a statement (showing income for the part of the year they were a resident) as a "Dual-Status Statement." If necessary, edit data from the "Dual-Status Statement" to perfect the Form 1040-NR.

  3. Edit "D/S" in the top-center margin.

  4. Edit RPC "1" .

  5. Edit CCC "E" .

  6. The Filing Status Code (FSC) can be "1" , "3" , or "6" .

  7. To determine the correct Filing Status Code (FSC) to edit on the Form 1040-NR:

    1. If a filing status box is marked on a Form 1040, take one of the following actions:

      FS Box Marked on 1040 And Then
      Single   Edit FSC "1" .
      Married filing jointly Only one of the taxpayers has income Edit FSC "6" , and circle out the name of the taxpayer that has no income.
      Married filing jointly Both taxpayers have income Correspond for separate returns.
      Married filing separately (MFS) Spouse is claimed as a dependent Edit FSC "6" .
      Married filing separately (MFS) Spouse is not claimed as a dependent Edit FSC "3" .
      Head of household (HOH)   Edit FSC "3" .

    2. If a filing status box is not marked on a Form 1040, take one of the following actions:

      FS Box Marked on 1040-NR And Then
      Single   Edit FSC "1" .
      Married filing separately (MFS)   Edit FSC "3" .
      All boxes marked or no boxes marked Spouse is not claimed as a dependent Edit FSC "1" .
      All boxes marked or no boxes marked Spouse is claimed as a dependent Edit FSC "3" .

  8. Edit Country Code. See IRM 3.21.3.84.5.1.

  9. Code all dependents to the correct dependent positions. For complete instructions, see IRM 3.11.3. For additional dependent editing, see IRM 3.21.3.84.7.1.

  10. Edit received date when required. See IRM 3.21.3.8.

  11. Combine all related T-Line amounts from Form 1040 and Form 1040-NR or Form 1040-NR-EZ. See Figure 3.21.3-41.

    Reminder:

    Add all T-Line amounts together from both forms, and watch for amounts that are identical and may have already been transferred by the taxpayer.

    Exception:

    If taxpayer's entries are identical on both Form 1040 and Form 1040-NR or Form 1040-NR-EZ, do not combine the figures from the two returns.

    Figure 3.21.3-41

    This is an Image: 34010041.gif

    Please click here for the text description of the image.

  12. Edit or combine T-Line amounts from Schedule A, Form 1040, to Schedule A, Form 1040-NR. Transfer the amounts as follows:

    From Schedule A, Form 1040 (Sequence 07) To Schedule A, Form 1040-NR (Sequence 7A)
    Line 4 Line 7
    Lines 5a, 5b, and 5c Line 1a
    Line 6 Line 7
    Line 10 Line 7
    Line 11 Line 2
    Line 12 Line 3
    Line 13 Line 4
    Line 14 Line 5
    Line 15 Line 6
    Line 16 Line 7
    Line 17 Line 8

  13. If Schedule A (Form 1040-NR) is attached with no entries present or edited, edit "+" after Sequence Code 7A.

  14. Process the return using Form 1040-NR line-by-line instructions and the transcribed forms and schedules instructions.

    Exception:

    Do not "X" Schedule A (Form 1040-NR).

    Caution:

    If multiple forms and schedules are attached, determine whether they are duplicates or multiples by comparing amounts with entries on Form 1040. If duplicates are attached, perfect the forms or schedules that support the Form 1040 and "X" all duplicates.

  15. Income earned during the Form 1040-NR period may not be excluded with Form 2555 or Form 2555-EZ (TY18 and prior). "X" Form 2555 or Form 2555-EZ (TY18 and prior), and if the foreign earned income exclusion is claimed on Schedule 1, "X" Schedule 1, line 9.

  16. If treaty income is reported on Form 1040-NR or Form 1040-NR-EZ:

    1. If the treaty is valid, see IRM 3.21.3.84.8.6.

    2. If the treaty is invalid, ensure the income is reported on the appropriate line of Form 1040-NR.

  17. "X" Form 1040. Ensure that Form 1040-NR or converted Form 1040-NR-EZ is the top document in the return package.

  18. Form 1040-NR or Form 1040-NR-EZ Dual Status returns will be rebatched following local procedures.

Prior Year Returns

  1. The instructions provided in this subsection of the manual are for editing prior year tax returns.

Prior Year Returns General Instructions

  1. Prior year returns are:

    1. Calendar-year returns filed for tax periods ending on or before 2212, and

    2. Fiscal-year returns filed for tax periods 2311 and earlier.

  2. All of the prior year editing procedures are based on the TAX YEAR of the return. Unlike the tax period which is based on the end of the return's tax period, the tax year (TY) is determined by the beginning of the return's tax period.

    1. For calendar-year returns, the tax period is the same as the tax year.

      Example:

      A return filed for January 1 through December 31, 2022, has a tax year of "TY22" and a tax period of "2212" .

    2. For a fiscal-year return, the tax year is always earlier than the tax period.

      Example:

      A return filed for June 1, 2021 through May 31, 2022, has a tax year of "TY21" and a tax period of "2205" .

  3. Determine and edit the received date in "MMDDYY" format if missing.

    Note:

    All prior year returns must have a Received Date.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. Do not edit RPC "V" or SPC "Y" on prior year returns.

  5. Use the appropriate Correspondence action sheet to generate Letter 4087C, Letter 2894C, or Letter 2894SP when corresponding on prior year returns.

    Note:

    When corresponding on prior year returns, refer to original line numbers in correspondence.

    Exception:

    Use Form 9143 or Form 13557 when corresponding for missing signature(s) and other correspondence being sent back to the taxpayer.

Statutory Protection Cases

  1. The refund statute on Form 1040, Form 1040A, Form 1040EZ, Form 1040-PR, Form 1040-SS, Form 1040-NR, or Form 1040-NR-EZ returns expires three years after the return due date, or the date the return was filed (if after the due date), or two years after the date the tax was paid, whichever is later. The assessment statute generally expires three years after either the return received date or the due date, whichever is later.

  2. For purposes of Code & Edit, consider a prior year return to be a potential statute protection case when both of the following apply:

    1. The return due date exceeds 33 months prior to the current processing month and year

    2. The return has not been cleared by Statute Protection unit

  3. For TY20 refund returns, if the received date is April 16, 2024 or later and the postmark is on or before April 15, 2024, edit the postmark as the received date.

  4. If the tax period exceeds 33 months prior to the current processing month and year, then do the following:

    1. If the return has a Statute Control stamp, edit RPC "K" and continue processing the return.

      Note:

      The presence of verbiage reading "Cleared for Assessment" , "Cleared by Statute" , "No Statute Issue" , "Delinquent Return Cleared by Statute" , or similar statement are all indicators the return has been cleared by the Statute Unit.

    2. If the return does not have a Statute Control stamp, see IRM 3.11.3.72.2(3)(b).

      Exception:

      Do not send returns to Statute Control for clearance if there are no money amounts present or an indication of:
      *OIC/COIC (Centralized Offer in Compromise)
      *ICS (Integrated Collection System)
      *NFR (Non-filer Reject)
      * "SFR/6020(b)" , "Secured by Exam" , Secured by Collections, Secured by TE/GE, Secured by TE/GE EP Exam
      * "Dummy Return"
      *"TC 59X-XX"
      * Returns with SPC "B" (edited by RIVO or ITVA), a Form 14039 attached, ID theft notated on the return or in a statement, or Form 8948 stating the return was rejected for primary and/or secondary TIN previously used.

  5. Edit RPC "K" on potential statute control returns when received from RIVO or ITVA with or without a Statute Control Stamp.

Prior Year Returns Editing Procedures

  1. Follow the instructions in both IRM 3.21.3 and IRM 3.11.3. Follow the current-year procedures when no specific prior-year instructions are given.

  2. Underline the preprinted tax year when the taxpayer has used the correct form for the tax period being reported. Edit the tax period to the right of the preprinted year in "YYMM" format when either of the following conditions apply:

    1. The taxpayer has used a form for a tax period other than the one being reported.

    2. The preprinted tax period is missing or illegible.

  3. For all tax years, renumber or convert all T-lines to agree with current year forms and schedules.

    1. Renumbering - Mark out the line number(s) on the prior year form/schedule and edit the current year T-line number(s). See Prior Year Job Aid, 2431-010 and Prior Year section of Job Aid 2513-701.

    2. Converting - Convert to a current year form or use a conversion sheet (Form 13899 for Form 1040-NR, Form 6114 for Form 1040, and Form 6114-A for Schedules 1-3) if marking out the line numbers would make transcription more difficult.

      Note:

      Use current year forms and schedules when renumbering is not practical.

  4. Line references in these prior year instructions are to the current year line numbers, unless otherwise specified.

  5. Take one of the following actions when a T-Line with no current year equivalent contains a significant entry:

    1. "X" the amount when present on a current year T-line.

    2. Do not renumber the line as a T-line when renumbering a prior year form/schedule.

    3. Do not edit the amount to the Form 13899, Form 6114, Form 6114-A, or blank current year form/schedule when converting.

  6. Compute and edit amounts following line-by-line instructions only for TY14 and later.

  7. For TY13 and prior, do not correspond or manually compute T-Lines.

    Exception:

    Correspond for signature regardless of tax year.

  8. When editing from prior year Forms W-2 and Forms 1042-S, ensure correct amounts are transferred by referring to box titles in addition to box numbers.

Form 1040, Pages 1 and 2

  1. The instructions in this subsection are for prior year editing of Form 1040, pages 1 and 2.

Form 1040, Line 30 - Recovery Rebate Credit
  1. The Recovery Rebate Credit is valid for TY21 and TY20 only.

  2. For complete instructions, see IRM 3.11.3.

    Exception:

    Taxpayers may not claim the Recovery Rebate Credit (RRC) on Dual-Status returns. If an amount for RRC is present on a Dual-Status return, "X" where found.

Form 1040, Line 31 - Other Payments and Refundable Credits (Schedule 3, Line 15)
  1. For TY22 only, if there is an amount on line 31, and a notation of "IRA22DPE" , "CHIPS22DPE" , "IRA22TRE" , or something similar is present here or elsewhere on the return, indicating a Deemed Payment Election (DPE) is being claimed, follow these instructions:

    1. If "IRA22DPE" , "CHIPS22DPE" , or something similar is notated, edit CCC "3" and RPC "5" .

    2. If "IRA22TRE" or something similar is notated, edit RPC "5" .

    3. Fully code the return, and then pull to be rebatched under the original program using "DPE" as the Batch ID.

  2. For additional instructions, see IRM 3.11.3.

Form 1040, Schedule 1

  1. The instructions in this subsection are for prior year editing of Form 1040, Schedule 1.

Schedule 1, Line 9 - Other Income
  1. Most treaties have exemptions for specific categories of income for which resident aliens may claim treaty benefits. The exceptions generally are not available to resident aliens who are green card holders. For Tax Year 2006 and prior, China, former Soviet Republics still governed by the Soviet Treaty, Pakistan, and Greece are the only countries that permit green card holders to claim treaty exemptions on Form 1040. If the treaty claimed is:

    1. Valid - allow by editing the exempt income to Schedule 1, line 9 as a negative amount, and verify that the income is reported on the appropriate income line.

    2. Invalid (any country other than those listed above for TY06 and prior) - disallow by "X" -ing the exempt income where found, and ensure that the income is reported on the appropriate line.

  2. Use Exhibit 3.21.3-12 to verify if the treaty is valid when the tax year is listed in Exhibit 3.21.3-12. If the tax year is not included in Exhibit 3.21.3-12, use Exhibit 3.21.3-10 to verify if the treaty is valid.

Form 1040, Schedule 2

  1. The instructions in this subsection are for prior year editing of Form 1040, Schedule 2.

Schedule 2, Line 19 - Additional Tax from Schedule 8812 (TY21 Only)
  1. For TY21 only, if an amount is present on line 19, Schedule 8812 must be attached. If missing, correspond for Schedule 8812.

Form 1040, Schedule 3

  1. The instructions in this subsection are for prior year editing of Form 1040, Schedule 3.

Schedule 3, Line 5 - Residential Energy Credits (Form 5695, Line 15) (TY22 and Prior)
  1. For TY22 and prior, if an amount is claimed on line 5, Form 5695 must be attached. If missing and the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond for Form 5695.

    Note:

    If an amount is claimed on line 5 and only Form 5695, page 2 is attached, delete the amount on line 5.

  2. For TY22 and prior, when an amount is claimed on line 5, renumber line 5 as line 5a.

Schedule 3, Line 6f - Qualified Plug-In Motor Vehicle Credit (TY22 and Prior)
  1. For TY22 and prior, if there is an amount on line 6f, Form 8936 must be attached. If missing, correspond for Form 8936.

Schedule 3, Line 13a - Deemed Payment Election (DPE) (TY22 Only)
  1. For TY22 only, see IRM 3.21.3.86.4.2.

Schedule 3, Line 13b (12b for TY20) (SFL) - Credit for Qualified Sick and Family Leave Wages (TY20, TY21, and TY22)
  1. For TY22, when an amount is claimed on line 13b, Schedule H must be attached. If missing, correspond for Schedule H.

  2. For TY21 and TY20, when an amount is claimed on line 13b (TY21) or line 12b (TY20), Schedule H and Form 7202 must be attached. If either or both are missing, correspond for Schedule H and/or Form 7202.

  3. For TY22 and TY21, when an amount is claimed on line 13b, renumber line 13b as "SFL" .

  4. For TY20, when an amount is claimed on line 12b, renumber line 12b as "SFL" .

Schedule 3, Line 13g - Credit for Child and Dependent Care Expenses (Form 2441) (TY21 Only)
  1. For TY21 only, when an amount is present, Form 2441 with an entry on line 10 must be attached. If missing, correspond for Form 2441.

Schedule 3, Line 13h (SL2) - Credit for Qualified Sick and Family Leave Wages (TY21 and TY22)
  1. For TY22, when an amount is claimed on line 13h, Schedule H must be attached. If missing, correspond for Schedule H.

  2. For TY21, when an amount is claimed on line 13h, Schedule H and Form 7202 must be attached. If either or both are missing, correspond for Schedule H and/or Form 7202.

  3. For TY22 and TY21, when an amount is claimed on line 13h, renumber line 13h as "SL2" .

Schedule C-EZ (Sequence 09, 10, 11) - Net Profit From Business

  1. Process following Schedule C instructions.

  2. For additional instructions, see IRM 3.11.3.

Form 1116 - Foreign Tax Credit

  1. Taxpayers earning income in the following countries are not allowed to take credit for foreign taxes paid to that country with respect to income earned between the start and end dates according to the table below:

    Country Name Start Date End Date
    Afghanistan January 1, 1987 August 4, 1994
    Albania January 1, 1987 March 15, 1991
    Angola January 1, 1987 June 18, 1993
    Cambodia January 1, 1987 August 4, 1994
    Cuba January 1, 1987 December 21, 2015
    Iraq February 1, 1991 June 27, 2004
    Libya January 1, 1987 December 9, 2004
    South Africa January 1, 1988 July 10, 1991
    Vietnam January 1, 1987 July 21, 1995
    People's Democratic Republic of Yemen January 1, 1987 May 22, 1990

Form 2441 - Child and Dependent Care Expenses (TY21 and Prior)

  1. For a TY21 and prior Form 2441, edit line 2, column (c), to be column "d" .

Form 2555 - Foreign Earned Income Exclusion

  1. U.S. citizens and resident aliens living abroad are taxed on their worldwide income and may qualify to exclude some or all of their foreign earnings. In addition, they can exclude or deduct certain foreign housing amounts. The maximum foreign earned income exclusions for prior years are:

    1. $112,000 for 2022

    2. $108,700 for 2021

    3. $107,600 for 2020

    4. $105,900 for 2019

    5. $103,900 for 2018

    6. $102,100 for 2017

    7. $101,300 for 2016

    8. $100,800 for 2015

    9. $99,200 for 2014

  2. Waiver of minimum time requirements - the minimum time requirements for the bona fide residence test or the physical presence test can be waived if the taxpayer must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country.

    Note:

    Edit dates to cover a full calendar year using dates provided by the taxpayer, if available. Otherwise, use the tax year of the return to determine the applicable dates.

  3. The following are the only countries for which a waiver may be claimed for 2022:

    Country Date of Departure on or after
    Ethiopia January 3, 2022
    Iraq January 14, 2022
    Ukraine February 12, 2022
    Belarus February 28, 2022
    China April 11, 2022
    Mali July 29, 2022

  4. The following are the only countries for which a waiver may be claimed for 2021:

    Country Date of Departure on or after
    Afghanistan April 27, 2021
    Burma March 30, 2021
    Chad April 17, 2021
    Ethiopia November 5, 2021
    Iraq January 19, 2021

  5. The following are the only countries for which a waiver may be claimed for 2020:

    Country Date of Departure on or after
    People's Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau (or Macao) (China) December 1, 2019 and on or before July 15, 2020
    All foreign countries February 1, 2020 and on or before July 15, 2020
    Iraq March 25, 2020

    Note:

    If the dates are either missing or don't qualify for either the bona fide residence or physical presence test, and there is a notation of "Revenue Procedure 2020-27" , "adverse conditions" , or "could not meet 330-day requirement due to emergency" (e.g., medical condition or travel restrictions), then allow the foreign earned income exclusion, and edit the physical presence dates provided. If dates are missing, edit dates for the calendar year (2001 and 2012).

  6. The following are the only countries for which a waiver may be claimed for 2019:

    Country Date of Departure on or after
    Democratic Republic of the Congo January 13, 2019
    Haiti February 14, 2019
    Iraq May 14, 2019
    Sudan April 11, 2019
    Venezuela January 24, 2019
    People's Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau (or Macao) (China) December 1, 2019 and on or before July 15, 2020
    All foreign countries February 1, 2020 and on or before July 15, 2020

    Note:

    If the dates are either missing or don't qualify for either the bona fide residence or physical presence test, and there is a notation of "Revenue Procedure 2020-27" , "adverse conditions" , or "could not meet 330-day requirement due to emergency" (e.g., medical condition or travel restrictions), then allow the foreign earned income exclusion, and edit the physical presence dates provided. If dates are missing, edit dates for the calendar year (1901 and 1912).

  7. The following are the only countries for which a waiver may be claimed for 2018:

    Country Date of Departure on or after
    Democratic Republic of the Congo December 14, 2018
    Cuba January 4, 2018
    Iraq September 28, 2018
    Nicaragua July 6, 2018

  8. The following are the only countries for which a waiver may be claimed for 2016:

    Country Date of Departure on or after
    South Sudan July 10, 2016
    Turkey October 29, 2016

  9. The following is the only country for which a waiver may be claimed for 2015:

    Country Date of Departure on or after
    Burundi May 14, 2015

  10. The following are the only countries for which a waiver may be claimed for 2014:

    Country Date of Departure on or after
    Libya July 26, 2014
    Yemen September 24, 2014

  11. Line 45 - The taxpayer may include an amount for a prior year exclusion by making a notation on the dotted portion of Form 2555, line 45. If this notated amount is included in the total on line 45, accept the taxpayer’s figure. If this amount is the only Form 2555 exclusion claimed, accept the taxpayer’s figures. DO NOT correspond for dates. DO NOT edit POD or dates.

Form 2555-EZ

  1. Form 2555-EZ was available for filing for TY18 and prior unless certain conditions were present. If a Form 2555-EZ is filed for TY19 or later, process it unless one of the conditions listed in IRM 3.21.3.86.12.1 (2) is present.

  2. For TY 1991 and prior, Form 2555-EZ is not allowed. Convert to Form 2555.

General Editing for Form 2555-EZ
  1. U.S. citizens or resident aliens living abroad are taxed on their worldwide income and may qualify to exclude their foreign earnings. In addition, they can exclude or deduct certain foreign housing amounts. The maximum foreign earned income exclusions for TY18 and prior years are:

    1. $103,900 for 2018

    2. $102,100 for 2017

    3. $101,300 for 2016

    4. $100,800 for 2015

    5. $99,200 for 2014

    6. $97,600 for 2013

  2. Convert to Form 2555 if the taxpayer reports any of the following on Form 2555-EZ:

    • Foreign earned income is over the maximum exclusion amount for the tax year shown in (1) above. See Figure 3.21.3-42.

      Note:

      Convert to Form 2555 when combined foreign earned income from Forms 2555-EZ for any one taxpayer is over the maximum exclusion amount for the tax year.

      Reminder:

      The limitation is based on the amount of income, not the exclusion.

    • Self-employment income (for example: Schedule C, Schedule E Part II or Schedule F).

    • Form 2106, Employee Business Expenses

    • Form 3903, Moving Expenses

    • Housing exclusion or housing deduction (including for a prior year)

    • Other than a calendar year, 12-month tax period

    Figure 3.21.3-42

    This is an Image: 34010042.gif

    Please click here for the text description of the image.

Form 2555-EZ - Page 1
  1. POD Codes (top-center of Form 2555-EZ): see IRM 3.21.3.41.4 and Exhibit 3.21.3-7.

  2. Line 1b and line 2b - Bona Fide Residence Test and Physical Presence Test: see IRM 3.21.3.41.5.

  3. If page 1 is missing, correspond.

Form 2555-EZ - Page 2
  1. If the taxpayer is claiming an exclusion from Form 2555-EZ, then page 2 must be completed. If missing or incomplete, correspond.

    Note:

    If the taxpayer enters zero on line 18, do not correspond; continue processing.

    Note:

    Ensure that the taxable amount is on Form 1040, line 1a, and the exclusion is on Schedule 1, line 9.

  2. Days in U.S. on Business:

    1. Add the number of days listed in column (c) titled "Number of days in U.S. on business" (Part III, line 12c).

      Note:

      Do not include days in the U.S. due to illness, personal reasons, or vacation in the total number of days in the U.S. on business.

    2. Edit the sum in the margin to the right of line 12d just above Part IV.

  3. Line 17 - Total Foreign Earned Income - Ensure income is included on Form 1040, line 1a.

  4. Line 18 - Foreign Earned Income Exclusion - If blank, edit the smaller of line 16 or line 17.

    1. Verify that the line 18 amount (or combined amounts if the primary and secondary both submitted a Form 2555) has been reported on Schedule 1, line 9. If Schedule 1, line 9 is blank, edit the line 18 amount to Schedule 1, line 9 as a negative entry (bracket the amount).

      Note:

      Prior Year Exclusion is not valid on Form 2555-EZ. Convert to Form 2555 by editing line 45 on page 3 only. No other editing is required. Do not correspond for dates

      .

Form 8936 (Sequence 69) - Qualified Plug-In Electric Drive Motor Vehicle Credit (TY22 and Prior)

  1. For TY22 and prior instructions, see IRM 3.11.3.

Form 1040-PR and Form 1040-SS - General Instructions (TY22 and Prior)

  1. The instructions in this subsection apply to TY22 and prior Form 1040-SS and Form 1040-PR.

  2. For TY22 and prior, the Form 1040-SS is written in English, and the Form 1040-PR is written in Spanish. Besides the language, both are identical forms, and taxpayers who reside in the U.S. territories of American Samoa (AS), the Commonwealth of the Northern Mariana Islands (CNMI), Guam (GU), Puerto Rico (PR), and the U.S. Virgin Islands (USVI) can file either Form 1040-SS or Form 1040-PR. Throughout this subsection, references to Form 1040-SS or Form 1040-PR are understood to apply to both Form 1040-SS and Form 1040-PR.

  3. Form 1040-SS or Form 1040-PR is filed by residents of U.S. territories and is used to:

    • report net earnings from self-employment and pay self-employment taxes,

    • pay any household employment taxes,

    • claim excess Social Security tax withheld,

    • pay any employee Social Security and Medicare tax on unreported tips or uncollected employee Social Security and Medicare tax on tips or group-term insurance,

    • for TY22, claim the additional child tax credit (only if qualified bona fide residents of Puerto Rico with at least 1 qualifying child),

    • for TY21, claim the refundable child tax credit (only if qualified bona fide residents of Puerto Rico with at least 1 qualifying child),

    • for TY20 and prior, claim the additional child tax credit (only if qualified bona fide residents of Puerto Rico with at least 3 qualifying children), and

    • for TY21 and prior, claim the health coverage tax credit (only if qualified bona fide residents of Puerto Rico).

  4. When correspondence is required, use:

    1. Form 13557 for Form 1040-PR and Form 1040-SS for missing signatures or other correspondence when the return is being sent back to the taxpayer.

    2. Form 13975 for Form 1040-PR and Form 1040-SS for correspondence when the return is not being sent back to the taxpayer.

  5. If a taxpayer, who lives or lived in Puerto Rico (PR), files Form 1040-PR or Form 1040-SS to report self-employment and also files Form 1040 to report worldwide income, see IRM 3.21.3.80.3.

  6. If the taxpayer files Form 1040-PR or Form 1040-SS along with a U.S. Form W-2 showing U.S. income, correspond and request that they file Form 1040 to report their income. Return the Form 1040-PR or Form 1040-SS to the taxpayer using Form 13557, paragraph 11.

  7. For the items listed below, refer to the general instructions:

    • Received Dates, see IRM 3.21.3.8

    • Tax Period, see IRM 3.21.3.11

    • Taxpayer Identification Information, see IRM 3.21.3.12.2

    • Caption Information, see IRM 3.21.3.12.1

    • Address, see IRM 3.21.3.12.3.2 through IRM 3.21.3.12.6

    • P-TIN/S-TIN, see IRM 3.21.3.12.2.1 and IRM 3.21.3.12.2.2

    • Name Line and Additional Information Line, see IRM 3.21.3.12.3 through IRM 3.21.3.12.3.3

  8. Route all Forms 1040-PR and Forms 1040-SS to the workleader when there is an indication it is a copy/copia, amended/enmendada, corrected/corregida, or electronically filed/radicada electronicamente, unless "no TC 150" is annotated.

  9. Route all Forms 1040-PR and Forms 1040-SS to the workleader for TC 150 research before corresponding, when only page 1 is present and the return was received with remittance.

  10. For TY01 and prior, use a current year form to dummy Page 1. See Figure 3.21.3-43.

    Figure 3.21.3-43

    This is an Image: 34010043.gif

    Please click here for the text description of the image.

Government Retiree Credit
  1. "X" any amount claimed for a government retiree credit.

Editing Part I, Lines 1 - 16 (Total Tax and Credits)
  1. The taxpayer uses this section to report Total Tax and Credits.

Line 1 - Filing Status Code (FSC)
  1. The Filing Status Code (FSC) must always be edited. Edit the FSC in the left margin beside the filing status (FS) area.

  2. For TY22 and TY21, use the following table to edit the correct FSC when one filing status box is marked:

    FS Box Marked And Then
    Single   Edit FSC "1" .
    Married filing jointly Two signatures are present Edit FSC "2" .
    Married filing jointly One signature is present Correspond for the spouse’s missing signature.
    Married filing separately (MFS) Spouse's name is not included in the caption area Edit FSC "3" .
    Married filing separately (MFS) Spouse's name is included in the caption area, but only one signature is present Edit FSC "3" , and circle the spouse's name.
    Married filing separately (MFS) Spouse’s name is not included in the caption area, but two signatures are present Edit FSC "3" .
    Married filing separately (MFS) Spouse’s name is included in the caption area, and two signatures are present Edit FSC "2" .
    Head of household At least one qualifying child is present Edit FSC "4" .
    Head of household No qualifying children are present Edit FSC "1" .
    Qualifying surviving spouse No spousal date of death, or date of death was within the two years before the tax year of the return Edit FSC "5" .
    Qualifying surviving spouse Both of the following conditions are present:
    • Spousal date of death was more than two years before the tax year of the return, AND

    • No qualifying children are present

    Edit FSC "1" .
    Qualifying surviving spouse Both of the following conditions are present:
    • Spousal date of death was more than two years before the tax year of the return, AND

    • At least one qualifying child is present

    Edit FSC "4" .
    Qualifying surviving spouse Spousal date of death was either within the tax year of the return or after the tax year of the return Edit FSC "2" .

  3. For TY22 and TY21, use the following table to edit the correct FSC when no filing status box is marked:

    If Then
    Two names are in the caption and two signatures are present Edit FSC "2" .
    Both of the following conditions are present:
    • One name is in the caption and one signature is present, AND

    • An S-TIN or spouse's name is entered on the line under the filing status boxes, or an S-TIN is present in the caption area

    Edit FSC "3" .
    If any other condition exists Edit FSC "1" .

  4. For TY22 and TY21, when more than one filing status box is marked (unless both filing status Single and filing status Head of household are marked), edit the FSC for the marked filing status box that has the largest corresponding FSC number.

  5. For TY22 and TY21, if both filing status Single and filing status Head of household are marked, use the following table to edit the correct FSC:

    If Then
    At least one qualifying child is present Edit FSC "4" .
    No qualifying children are present Edit FSC "1" .

  6. For TY20 and prior, use the following table to edit the correct FSC when one filing status box is marked:

    FS Box Marked And Then
    Single   Edit FSC "1" .
    Married filing jointly Two signatures are present Edit FSC "2" .
    Married filing jointly One signature is present Correspond for the spouse’s missing signature.
    Married filing separately Spouse's name is not included in the caption area Edit FSC "3" .
    Married filing separately Spouse's name is included in the caption area, but only one signature is present Edit FSC "3" , and circle the spouse's name.
    Married filing separately Spouse’s name is not included in the caption area, but two signatures are present Edit FSC "3" .
    Married filing separately Spouse’s name is included in the caption area, and two signatures are present Edit FSC "2" .

  7. For TY20 and prior, use the following table to edit the correct FSC when no filing status box is marked or more than one filing status box is marked:

    If Then
    Two names are in the caption and two signatures are present Edit FSC "2" .
    Both of the following conditions are present:
    • One name is in the caption and one signature is present, AND

    • An S-TIN or spouse's name is entered on the "Married filing separately" line, or an S-TIN is present in the caption area

    Edit FSC "3" .
    Any other condition exists Edit FSC "1" .

Line 2 - Qualifying Children Information
  1. For Form 1040-PR and Form 1040-SS, up to four qualifying children name controls and Social Security Numbers can be transcribed.

  2. A qualifying child may include a son, daughter, stepchild, adopted child, grandchild, niece, nephew, foster child, brother, sister, stepbrother, stepsister, half-brother, or half-sister. For additional information on qualifying children, see IRM 3.11.3.13.2.1(1) and (4). "X" all claimed dependents that are not qualifying children.

    Note:

    Treat a relationship of "g child" as a godchild, and "X" the dependent. Also, "X" a dependent with a blank relationship.

  3. For TY22 and TY21, if the taxpayer has not claimed at least one qualifying child or the taxpayer's address is not in Puerto Rico, take the following actions:

    1. "X" all dependents,

    2. "X" the amount on line 9 (Additional Child Tax Credit/Refundable Child Tax Credit), and

    3. "X" Part II.

  4. For TY20 and prior, if the taxpayer has not claimed at least 3 qualifying children or the taxpayer's address is not in Puerto Rico, take the following actions:

    1. "X" all dependents,

    2. "X" the amount on line 9 (Additional Child Tax Credit), and

    3. "X" Part II.

Child's Social Security Number
  1. Every qualifying child must have a Social Security Number. Search attachments for any qualifying child's Social Security Number not listed on line 2(b).

  2. If the missing Social Security Number is found and:

    If four Social Security Numbers are Then
    Already listed "X" the name of the dependent(s) without a listed Social Security Number
    Not already listed Edit up to four Social Security Numbers to line 2(b).

  3. If the missing Social Security Number is not found on the return or attachments, take the following actions:

    If the taxpayer And Then
    Notes "Died" (child born and died during the tax period) Birth or death certificate or copies of hospital medical record(s) are not attached Correspond for the missing birth certificate.
    Provides no Social Security Number Fewer than four Social Security Numbers are present for other dependents "X" the name(s) of the qualifying child(ren) on line 2(a)
    Provides no Social Security Number At least four Social Security Numbers are present for other dependents Take no action

  4. When corresponding for other missing return items, correspond for missing Social Security Numbers of all qualifying children.

    Exception:

    Do not correspond when a dependent Social Security Number is missing, and there is an indication that the dependent was born and died during the tax year.

Qualifying Child's Name Control
  1. The name control(s) must be present for the first four qualifying children with Social Security Numbers listed on line 2. If missing, edit the name control(s) to the qualifying child's name area. Determine the missing name control(s) in the following priority:

    1. From supporting attachments

    2. From the primary taxpayer's name control

Line 2c - Child Tax Credit Indicator
  1. Edit a checkmark to the right of line 2(c) in the margin for every qualifying child with a name control and complete Social Security Number.

    Caution:

    Do not edit a checkmark if the qualifying child was "X" -ed (disallowed).

Line 3 - Self-Employment Tax
  1. If an amount is present, Part V, Schedule SE, or Schedule SE, Section B (TY19 and prior) must be completed.

  2. If an amount is present and Part V, Schedule SE, or Schedule SE, Section B (TY19 and prior) is missing or blank, dummy Part V or Schedule SE from Part III, Part IV, Schedule C, Schedule F, or Schedule SE, Section A (TY19 and prior), if possible.

  3. If an amount is present and Part V, Schedule SE, or Schedule SE, Section B (TY19 and prior) is missing or blank and cannot be dummied, correspond for Schedule SE.

    Exception:

    If the taxpayer used this line to report unreported tips from Form 4137 or Form 8919, do not correspond. Delete the amount from line 3, and edit the amount to be included in line 6.

  4. If line 3 is blank and Part V or Schedule SE has entries, edit the amount from Part V, line 12 or Schedule SE, line 12 to Part I, line 3.

    Caution:

    The taxpayers may include separate Parts V or Schedules SE for the primary and secondary taxpayers. If the return includes two Parts V or two Schedules SE, combine the line 12 amounts and edit the total to Part I, line 3.

Line 4 - Household Employment Taxes (Schedule H or Schedule H-PR/Schedule H (sp))
  1. If an amount is present on line 4 and Schedule H, Schedule H-PR, or Schedule H (sp) is not attached, correspond:

    1. For Schedule H if the taxpayer filed Form 1040-SS

    2. For Schedule H-PR if the taxpayer filed Form 1040-PR

Line 5 (5a for TY21) - Additional Medicare Tax (Form 8959)
  1. If an amount is present on line 5 (5a for TY21), Form 8959 must be attached. If missing, correspond for Form 8959.

Line 5b - Repayment of Advance Child Tax Credit (TY21 Only)
  1. For TY21 only, if an amount is present on line 5b, Schedule 8812 must be attached. If missing, correspond for Schedule 8812.

Line 6 - Total Tax
  1. Edit line 6 in dollars and cents when adjusting or computing and editing an amount.

  2. Compute and edit line 6 when it is blank, dash, zero, or illegible and there are entries leading to a total.

    Reminder:

    Edit lines 6 through 16 in dollars and cents when adjusting or computing and editing amounts.

  3. If the taxpayer notates, "Tax on Tips," on the line 6 dotted portion, Form 4137 must be attached to support the entry. If missing, correspond for Form 4137.

Line 7 - Estimated Tax Payments
  1. "X" any amount that can be determined to be other than ES tax payments.

Line 8 - Excess Social Security Tax Withheld
  1. Take no action when the amount on line 8 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Correspond when an amount for excess SST is present on line 8 and no Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR is attached.

  3. If line 8 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR is attached, and any single Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR shows Social Security withholding greater than the maximum Social Security tax withholding limit for the tax year filed (see IRM 3.11.3 for prior year maximum SST withholding limits), "X" line 8. Otherwise, take the following steps to verify the line 8 entry using dollars and cents during the computation:

    1. Compute the taxpayer's Social Security tax withheld. If the result is less than the filed year’s maximum SST withholding limit, "X" line 8.

      Caution:

      If married filing jointly, DO NOT ADD Form W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, or Form 499R-2/W-2PR for primary and secondary taxpayers together.

    2. Subtract the filed year’s maximum SST withholding limit from the Social Security tax withheld. The result is the excess Social Security tax withheld for that taxpayer.

    3. For FS 2, the excess SST amount for each taxpayer is computed separately, and the combined total is compared to the entry on line 8.

    4. If the computed amount differs from the line 8 amount by more than $5.00, "X" line 8, and edit the computed amount in dollars and cents.

Line 9 - Additional/Refundable Child Tax Credit
  1. "X" the line 9 amount if present and the address on the return is not in Puerto Rico.

  2. For TY22 and TY21, "X" the line 9 amount if present and the taxpayer has not claimed at least 1 qualifying child on Part I, line 2.

  3. For TY20 and prior, "X" the line 9 amount if present and the taxpayer has not claimed at least 3 qualifying children on Part I, line 2.

  4. If line 9 is blank, Part II, line 3 has an amount, and the taxpayer qualifies for the Additional Child Tax Credit or the Refundable Child Tax Credit, edit the Part II, line 3 amount to Part I, line 9.

    Note:

    Do not edit Part I, line 9 if Part II has been "X" -ed.

Line 11a - Credit for Qualified Sick and Family Leave Wages From Schedule(s) H for Leave Taken Before April 1, 2021
  1. For TY22 and TY21, if line 11a has an amount, then Schedule H must be attached. If missing, correspond for Schedule H.

Line 11b - Credit for Qualified Sick and Family Leave Wages from Schedule(s) H for Leave Taken After March 31, 2021, and Before October 1, 2021
  1. For TY22 and TY21, if line 11b has an amount, then Schedule H must be attached. If missing, correspond for Schedule H.

Line 12 - Total Payments and Credits
  1. Edit line 12 in dollars and cents when adjusting, or computing and editing amounts.

  2. Compute and edit line 12, by adding lines 7 through 11b, when it’s blank, dash, or zero, and there are entries leading to a total.

  3. Correspond for an explanation when there is an amount on line 12 and lines 7 through 11b are blank.

    Exception:

    Do not correspond if "Form 4868" or an explanation is noted on the dotted portion of line 12.

    Note:

    Do not correspond if Form 8959 is attached to support withholding.

  4. For TY20 only, taxpayers may claim Schedule H, line 8e as a write-in on the dotted portion of line 12. If the taxpayer includes an amount with the notation “SLFLC” to the left of line 12, Schedule H must be attached. If missing, correspond for Schedule H.

Line 14a - Refund
  1. Compute and edit line 14a, by subtracting line 6 from line 12, when lines 13, 14a, 15, and 16 are all blank, line 12 is greater than line 6, and any of the following conditions are present:

    1. Line 6 has an entry,

    2. The taxpayer has computed or indicated no tax due on line 6, or

    3. It can be determined that line 6 would be zero if computed.

Lines 14b, 14c and 14d - Direct Deposit Information
  1. For complete instructions, see IRM 3.11.3.

    Note:

    When Form 1040 refers to lines 35b, 35c, and 35d, they are lines 14b, 14c, and 14d on Form 1040-PR and Form 1040-SS.

Line 15 - ES Credit Elect
  1. If lines 13, 14a, and 15 are the same and:

    1. ES Payments (line 7) are claimed, "X" the line 14a entry.

    2. ES Payments (line 7) are not claimed, "X" the line 15 entry.

    Note:

    Take no action when the overpayment (line 13) is divided between lines 14a and 15.

Line 16 - Amount You Owe
  1. Compute and edit line 16, by subtracting line 12 from line 6, when lines 13, 14a, 15, and 16 are all blank, dash, or zero and line 6 is greater than line 12.

Signature
  1. For complete instructions, see IRM 3.11.3.

Identity Protection Personal Identification Numbers (IP PIN)
  1. Identity Protection Personal Identification Number (IP PIN) is located in the "Sign Here" area of the return.

  2. If blank and CP-01A is attached, verify the taxpayer name(s) matches the name(s) on the CP-01A and the tax return. If the name(s) match and the IP PIN on CP-01A is not present on the tax return, edit the IP PIN in the boxes designated for Identity Protection PIN (located below the Daytime phone number box in the signature area of the return).

    Note:

    There may be an IP PIN for both primary and secondary taxpayers; do not circle out. If FS 2 and both spouses have an IP PIN, edit both as necessary.

  3. If the name(s) do not match between an attached CP-01A and the tax return, see Exhibit 3.21.3-1.

  4. Circle IP PIN if it is more or less than 6 numbers.

Paid Preparer Data
  1. Edit the E-File Waiver Indicator to the right of the IP PIN boxes.

  2. For additional instructions, see IRM 3.11.3.

Editing Part II - Bona Fide Residents of Puerto Rico Claiming Additional/Refundable Child Tax Credit
  1. For TY22 and TY21, "X" Part II if entries are present, and the address on the return is not in Puerto Rico or the taxpayer did not claim at least 1 qualifying child on Part I, line 2.

    Note:

    "X" Part II even if there is not an amount on Part I, line 9.

  2. For TY20 and prior, "X" Part II if entries are present, and the address on the return is not in Puerto Rico or the taxpayer did not claim at least 3 qualifying children on Part I, line 2.

    Note:

    "X" Part II even if there is not an amount on Part I, line 9.

Line 1 - Modified Adjusted Gross Income / Income Derived From Sources Within Puerto Rico
  1. If line 1 has an amount, renumber line 1 to line 3, and line through the preexisting line number 3.

    Exception:

    Do not renumber if Part II has been "X" -ed.

Line 2 - Withheld Social Security, Medicare, and Additional Medicare Taxes
  1. Reserved for TY21. The following instructions do not apply to TY21.

  2. If line 2 has an amount, renumber line 2 to line 13f.

    Exception:

    Do not renumber if Part II has been "X" -ed.

  3. For TY22, and TY20 and prior, if an amount is present and the taxpayer is claiming the Additional Child Tax Credit (ACTC) on Part I, line 9, supporting documentation (Forms 499R-2/W-2PR or leave and earnings statements) must be present. If missing, correspond for documentation.

  4. For TY22, and TY20 and prior, if line 2 is blank, ACTC is claimed on Part I, line 9, and Forms 499R-2/W-2PR or leave and earnings statement are present, edit line 2 using the Forms 499R-2/W-2PR or leave and earnings statements by adding all withheld Social Security, Medicare, and Additional Medicare taxes.

  5. For TY22, and TY20 and prior, if an amount was already present, verify the amount claimed by adding all withheld Social Security, Medicare, and Additional Medicare taxes from Forms 499R-2/W-2PR or leave and earnings statements:

    1. If the amount is correct, take no action.

    2. If the amount is not correct, "X" line 2 amount and edit the correct amount.

      Note:

      Allow for rounding by the taxpayer ($2.00 tolerance per Form 499R-2/W-2PR).

    Caution:

    Do not use dollars and cents during the computation.

Editing Part III - Profit or Loss From Farming
  1. No editing is required here.

Editing Part IV - Profit or Loss From Business (Sole Proprietorship)
  1. If Part IV has an amount on line 1, 16, 23, or 24, do the following:

    • If line 1 has an amount to the right of "gross receipts" that is different from an amount to the right of "balance," edit a "1" to the left of the amount for "gross receipts," and line through the line number 1 to the right of "balance."

    • If line 16 has an amount, renumber line 16 to line 18, and line through the preexisting line numbers 18a and 18b.

    • If line 23 has an amount, renumber line 23 to line 25, and line through the preexisting line number 25b.

    • If line 24 has an amount, renumber line 24 to line 26, and line through the preexisting line number 26.

    • Edit Sequence Code "09" in the upper-right margin of the first Page 3 with T-line entries in Part IV, edit Sequence Code "10" in the upper-right margin of the second Page 3 with T-line entries in Part IV, and edit Sequence Code "11" in the upper-right margin of the third Page 3 with T-line entries in Part IV. If there are more than three Parts IV with T-line entries, combine T-line amounts following instructions in IRM 3.11.3.

Editing Part V - Self-Employment Tax
  1. Only two Parts V or Schedules SE can be processed; one Part V or Schedule SE for each of:

    • The primary taxpayer

    • The secondary taxpayer

  2. For TY 19 and prior, when the taxpayer uses Schedule SE - Short version, Section A instead of Part V of Form 1040-PR or Form 1040-SS, convert to Schedule SE. Edit lines 2 and 3 from the Short Schedule SE to lines 2 and 3 of a current Schedule SE.

    Note:

    Schedule SE - Long version is an acceptable substitute for Part V.

  3. If the TIN is present but no dollar amounts are present, "X" Part V or Schedule SE.

  4. If only one processable Part V or Schedule SE is present, edit Sequence Code "17" , if not preprinted.

  5. If two processable Parts V or Schedules SE are present, one for the primary taxpayer and one for the secondary taxpayer, edit the Sequence Code as follows:

    1. Edit "17" , if not preprinted for the primary taxpayer.

    2. Edit "18" , for the secondary taxpayer.

  6. Take one of the following actions when one Part V or Schedule SE was submitted for two taxpayers:

    1. Allocate each taxpayer's Part V or Schedule SE amounts to two separate dummy Parts V or Schedules SE. "X" the Part V or Schedule SE with the combined taxpayer liability.

    2. Correspond for the correct allocation when it cannot be determined.

Social Security Number
  1. A TIN must be present if there are significant T-line entries in Part V or Schedule SE. If the TIN is missing, illegible, or incomplete, take the following actions:

    1. Edit the TIN from the caption on Form 1040-PR or Form 1040-SS.

    2. If the TIN is not present in the caption, search Form(s) W-2 and other attachments for the missing TIN.

      Note:

      Also, edit the missing TIN to the caption.

  2. If the TIN and name are both missing, edit the primary TIN.

    Note:

    If corresponding for missing signature on a joint return, also request the Social Security Number.

  3. If there are multiple TINs and one name on Part V or Schedule SE, circle out the TIN that does not match the name. Use the caption area to determine which TIN should be circled out.

Line 1a - Net Farm Profit or (Loss)
  1. If blank, edit the amount from Part III, line 36 or Schedule F, line 34.

Line 1b - Conservation Reserve Program Payments
  1. If blank, edit the amount from Part III, line 6 or Schedule F, line 4b.

Line 2 - Net Nonfarm Profit or (Loss)
  1. If blank, edit the amount from Part IV, line 27 or Schedule C, line 31.

Line 3 - Total Net Profit or (Loss)
  1. Compute and edit line 3 when it is blank, dash, or zero and there are entries leading to a total.

  2. "X" Page 4 or Schedule SE when the amount on line 3 is a negative amount or it is less than $434.

    Exception:

    Do not "X" Page 4 or Schedule SE when line 5a has an entry of $109 or more.

  3. If lines 1a, 1b, 2, and 3 are all blank and you are unable to determine line 3 from attachments, but line 4a has an entry, divide the amount on line 4a by .9235 and edit the result on line 3.

  4. If lines 1a, 1b, 2, 3, and 4a are all blank, but line 4b has an entry, edit line 4b to line 3.

Right Margin of Line 4c - SE Quarters Covered
  1. When the return is for a short year or for a change of accounting period, edit the number of quarters covered in the margin to the right of line 4c, using the following guidelines:

    • The quarters begin in January, April, July, and October.

    • A fraction counts as a full quarter.

    • Code SE quarters as follows - Code 1 for one quarter, - Code 2 for two quarters, - Code 3 for three quarters - DO NOT code for four quarters.

Line 5a - Church Employee Self-Employment Wages
  1. If line 5a has an entry of $109 or more, process regardless of the line 3 amount.

  2. If line 5a is blank and line 5b has an entry, divide the amount on line 5b by .9235, and edit the result on line 5a.

Line 8d - Total Social Security Wages and Tips
  1. If the amount on line 8d is equal to or greater than the maximum Social Security wage limit for the tax year filed (see IRM 3.11.3 for prior year maximum Social Security wage limits) and lines 8b and 8c are blank, add applicable taxpayer's Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS wages and tips subject to Social Security tax withholding, and take one of the following actions:

    1. If wages and tips per Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS are less than the maximum Social Security wage limit for the tax year filed, edit the total income on line 8d.

    2. If there is no Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS income, lines 8a through 8c are blank, and line 8d is equal to or greater than the maximum Social Security wage limit for the tax year filed, "X" line 8d.

    Note:

    For prior year line 8d maximum thresholds, see IRM 3.11.3.

  2. If the amount is equal to or greater than the maximum Social Security wage limit for the tax year filed and line 8b or 8c contains a significant entry, take no action.

  3. Compute and edit line 8d when it is blank, dash, or zero and one of the following conditions is present:

    1. There are entries leading to an amount.

    2. The taxpayer has Form 499R-2/W-2PR, Form W-2VI, Form W-2GU, Form W-2CM, or Form W-2AS wages and/or tips subject to Social Security tax withholding.

    Note:

    Only edit the amounts from the "Social security wages" box and/or the "Social security tips" box if there is also an amount in the box for "Social Security tax withheld" .

Bottom-Center Margin - SE Method Code
  1. Edit the SE Method Code to the bottom-center margin of Form 1040-SS, Page 4 (or Schedule SE, Page 1).

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Part VI, line 2 (or Schedule SE, line 15) and/or Part VI, line 4 (or Schedule SE, line 17) are misplaced.

  2. Edit SE Method Code "1" when both of the following conditions are present:

    • Part VI, line 2 (or Schedule SE, line 15) is blank or zero, and

    • Part V, line 4b (or Schedule SE, line 4b) and Part VI, line 4 (or Schedule SE, line 17) have significant amounts that are equal.

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Part VI, line 2 (or Schedule SE, line 15) and/or Part VI, line 4 (or Schedule SE, line 17) are misplaced.

  3. Edit SE Method Code "2" when both of the following conditions are present:

    • There is a significant entry on either Part VI, line 2 (or Schedule SE, line 15) or Part VI, line 4 (or Schedule SE, line 17), and

    • SE Method Code "1" has not been assigned.

    Exception:

    Do Not edit the SE Method Code when it can be determined that the entries on Part VI, line 2 (or Schedule SE, line 15) and/or Part VI, line 4 (or Schedule SE, line 17) are misplaced.

Forms and Schedules that are Allowed to be Attached to Form 1040-PR or Form 1040-SS
  1. The following forms and schedules are the only transcribed forms and schedules that can be attached to Form 1040-PR or Form 1040-SS:

    • Form 8867

    • Form 8888

    • Form 8919

    • Form 8959

    • Form 9000 (TY21 and later)

    • Schedule C

    • Schedule H

    • Schedule H-PR

    • Schedule LEP (TY19 and later)

    • Schedule SE

      Note:

      For TY19 and prior, only Section B of Schedule SE is transcribed. If Section A (short Schedule SE) is completed, convert to Schedule SE.

  2. If any other forms or schedules are attached, they must be "X" -ed or moved behind the last transcribable form.

Form 1040-NR - General Instructions

  1. Follow the current-year procedures when no specific prior-year instructions are given here.

  2. For TY20, Form 1040-NR was restructured to align with Form 1040, and uses the Form 1040, Schedules 1, 2, and 3.

  3. Form 1040-NR, pages 3 through 5, have been updated to separate schedules beginning in TY20.

    Note:

    Prior to TY20, these schedules did not have sequence numbers.

    1. Treat Schedule A (Sequence 7A), Schedule NEC (Sequence 7B), and Schedule OI (Sequence 7C) as pages 1, 2, and 3 of Sequence 07 when ordering the return.

Form 1040-NR - Perfecting Form 1040-NR Country Code
  1. For TY08 and prior, edit the appropriate 2 alpha character Country Code to the right of the taxpayer’s response to the question "Of what country were you a citizen or national during the tax year?" according to Exhibit 3.21.3-7. Examine Form 1040-NR to determine the country in which the taxpayer was a permanent resident by reviewing:

    1. The taxpayer’s response in the box headed "Give address in the country where you are a permanent resident..."

    2. If the taxpayer indicates "Same" or if the taxpayer does not respond to this question, determine the Country Code by using the address information in the caption.

    3. If the taxpayer uses a U.S. address in the caption area of the Form 1040-NR and does not respond to the question “Give address in the country where you are a permanent resident...”, assign the Country Code for the country indicated in response to the question "Of what country were you a citizen or national during the tax year?"

    4. If unable to determine the correct Country Code from the information on Page 1 of the return (Form 1040-NR), review the information included in the rest of the return, including attachments, to assign the Country Code.

Form 1040-NR - Manual Refund Procedure
  1. For TY08 and Prior:

    1. On a refund return when the nonresident has an address in the box notated, "give the address outside the U.S. to which you want any refund check mailed," which differs from the caption address and at least one is foreign, edit CCC "Y" and an action trail of "Manual Refund" .

    2. If a foreign address is present in the caption of Form 1040-NR or Form 1040-NR-EZ, and a name is present or has been edited as a second AIL, underline both. Then take the following actions for REFUND returns:
      •For Decedent Returns - Do Not Edit CCC "L" or CCC "W" .
      •Edit CCC "Y" and an action trail of "Manual Refund" .

      Exception:

      Do not edit CCC "Y" if CCC "3" has been edited. If taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not issue a manual refund. An IRSN can be identified when the middle two digits are not 50-65, 70-88, 90-99 and the number starts with a 9.

Form 1040-NR - Filing Status Code (FSC)
  1. For TY19 and TY18 Forms 1040-NR, edit the Filing Status Code (FSC) using the table below:

    FS Box Marked And Then
    2   Edit FSC "1" .
    5   Edit FSC "3" .
    6 Spousal date of death was more than two years before the tax year of the return Edit FSC "1" .
    6 No spousal date of death, or date of death was within the two years before the tax year of the return Edit FSC "5" .
    All boxes marked or no boxes marked Spouse is not claimed as a dependent Edit FSC "1" .
    All boxes marked or no boxes marked Spouse is claimed as a dependent Edit FSC "3" .

  2. For TY17 and prior, before editing the FSC, determine if the country the taxpayer resides in is one of the countries that is allowed to exempt a spouse. See table below for the countries allowed to claim a spouse.

    Note:

    The taxpayer will indicate that they are claiming their spouse by checking the box on line 7b, entering the spouse’s name on line 7c, or including them in, "boxes checked on 7a and 7b."

    Country of Residence Spouse
    Canada Yes
    Mexico Yes
    India (Students and business apprentices only)

    Note:

    Review the occupation area, attachments, Schedule OI, or Form 1040-NR-EZ, page 2 to make the determination.

    Yes
    South Korea Yes
    U.S. National (residing in any other country)

    Note:

    Taxpayer may mark FS Box 1 or 3.

    Yes
    All Other Countries No

  3. For TY17 and prior, edit the Filing Status Code (FSC) using the table below:

    FS Box Marked And Then
    1 or 2   Edit FSC "1" .
    3 or 4 Spousal exemption is not claimed or not allowed Edit FSC "3" .
    3 or 4 Spousal exemption is claimed and allowed Edit FSC "6" .
    5 Spousal exemption is not claimed Edit FSC "3" .
    5 Spousal exemption is claimed and the taxpayer is a resident of India and a student or business apprentice Edit FSC "6" .
    5 Spousal exemption is claimed but not allowed Edit FSC "3" .
    6 Spousal date of death was more than two years before the tax year of the return Edit FSC "1" .
    6 No spousal date of death, or date of death was within the two years before the tax year of the return Edit FSC "5" .
    All boxes marked or no boxes marked Spouse is not claimed as an exemption or dependent Edit FSC "1" .
    All boxes marked or no boxes marked Spouse is claimed as an exemption or dependent Edit FSC "3" .

Form 1040-NR - Dependents
  1. Exemptions are restricted by country of residence. See IRM 3.21.3.84.7.1 for instructions showing which countries and what relations are eligible to be claimed.

  2. For TY05 and prior, residents of Japan are allowed to claim exemptions for spouse, children, and other dependents.

Form 1040-NR - Dependent Coding
  1. For TY17 and prior, dependent position 2 will be edited as, "Child who did not live with you."

    Note:

    Always delete all entries on exemption position lines to the right of the line 7 area before editing the dependent positions.

    For TY17 and prior, if an eligible dependent is claimed in dependent position 2 (children on 7c who did not live with you due to divorce or separation), and Form 8332 with entries, Form 2120 with entries, or a copy of a divorce decree is attached, edit FPC "A" .

Form 1040-NR, Line 1a - Wages, Salaries, Tips (TY21 and Prior)
  1. For TY21 and prior, edit SPC "E" when "HSH" is notated on or near line 1a.

Form 1040-NR, Line 1b for TY21 and TY20 (Line 12 for TY19 and Prior) - Scholarship and Fellowship Grants
  1. For TY21 and prior, the following documents can be used to support a Form 1040-NR, line 1b (line 12 for TY19 and prior) entry:

    • Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior), issued by a college or an educational institution

    • A statement from a college or an educational institution (on their letterhead) that states the amount of a grant, the grantor's name, the dates it covers, and the expenses the grant covers

    • Form 1098-T

  2. If it can be determined that a scholarship or fellowship grant entered on line 1b (line 12 for TY19 and prior) is exempt under a tax treaty (check Schedule OI, item L), take the following actions:

    1. Edit/renumber the treaty-exempt amount to line 1k, and

    2. "X" the treaty exemption if shown anywhere else on the return (e.g., line 10c).

  3. Scholarship and fellowship income shown on a Form W-2 should be reported on Form 1040-NR, line 1a. If it is determined any Form W-2 income is included in the line 1b (line 12 for TY19 and prior) entry:

    1. Move the Form W-2 gross income to line 1a, and

    2. Do not adjust or compute Form 1040-NR, line 9 or 11.

  4. If an amount remains on line 1b (line 12 for TY19 and prior) after following the preceding instructions, edit that amount to Schedule 1, line 8r.

Form 1040-NR - Income Exemption(s) Claimed Due to Tax Treaties
  1. Use Exhibit 3.21.3-12 to verify if the treaty is valid when the tax year is listed in Exhibit 3.21.3-12. If the tax year is not included in Exhibit 3.21.3-12, use Exhibit 3.21.3-10 to verify if the treaty is valid.

Form 1040-NR, Line 10c for TY21 and TY20 (Line 31 for TY19 and Prior) - Scholarship and Fellowship Grants Excluded
  1. For TY21 and prior, if the taxpayer claims a treaty exemption on line 10c (line 31 for TY19 and prior) (including a scholarship/fellowship treaty exemption), "X" the entry on line 10c (line 31 for TY19 and prior), and follow one of these sets of actions:

    1. If the treaty exemption claimed is determined to be valid and the taxpayer has entered the income and/or exemption on any of lines 1a through 8 or Schedule 1, Part I, "X" the income and/or exemption, and edit/renumber the valid treaty-exempt amount to line 1k.

      Note:

      Do not adjust or compute line 9 or 11.

    2. If the treaty exemption is determined to be invalid, edit the exempted amount (if not already entered by the taxpayer) on line 1a if income is from Form W-2; on Schedule 1, line 8r if income is from Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior), Form 1098-T, or a college statement; or on another appropriate line of Form 1040-NR, page 1 or Schedule 1, page 1; AND"X" the claimed treaty exemption if entered by the taxpayer elsewhere on Form 1040-NR.

      Note:

      Do not adjust or compute line 9 or 11.

  2. If an amount remains on line 10c (line 31 for TY19 and prior) after following the preceding instructions, at least one of the following must be attached. If missing, correspond.

    • Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior), issued by a college or an educational institution

    • A statement from a college or an educational institution (on their letterhead) that states the amount of a grant, the grantor's name, the dates it covers, and the expenses the grant covers

    • Form 1098-T

  3. If an amount remains on line 10c (line 31 for TY19 and prior) after following the preceding instructions and at least one of the items in IRM 3.21.3.86.15.8 (2) is attached, follow the instructions in the table below:

    If And Then
    The amount on line 10c (line 31 for TY19 and prior) exceeds the sum of all the following:
    • All Form 1098-T payments received for qualified tuition and related expenses, box 1 amounts, and

    • All tuition and required, course-related expenses (fees, books, supplies, equipment) from educational institution statements, receipts, etc.

    Line 10c (line 31 for TY19 and prior) is less than or equal to the edited Schedule 1, line 8r amount Adjust line 10c to equal the sum calculated.

    Note:

    For TY19 and prior, edit the result to line 10c on the conversion sheet.

    The amount on line 10c (line 31 for TY19 and prior) exceeds the sum of all the following:
    • All Form 1098-T payments received for qualified tuition and related expenses, box 1 amounts, and

    • All tuition and required, course-related expenses (fees, books, supplies, equipment) from educational institution statements, receipts, etc.

    Line 10c (line 31 for TY19 and prior) is greater than the edited Schedule 1, line 8r amount Adjust line 10c to equal the lesser of the edited Schedule 1, line 8r amount or the sum calculated.

    Note:

    For TY19 and prior, edit the result to line 10c on the conversion sheet.

    Line 1b is blank Any of the following is attached:
    • Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior), issued by a college or an educational institution

    • Form 1098-T

    • A statement from a college or an educational institution (on their letterhead) that states the amount of a grant, the grantor's name, the dates it covers, and the expenses the grant covers

    Edit the total gross amount of scholarship or fellowship grants from all Form 1042-S with Income Code 16 (Income Code 15 for TY14 and prior) box 2 amounts, Form 1098-T box 5 amounts, and grant statements from educational institutions to Schedule 1, line 8r.

    Exception:

    If the scholarship or fellowship grant is included on line 1a, adjust line 1a and move amount to Schedule 1, line 8r. If line 1a is adjusted to zero and withholding has been claimed on line 25g, edit RPC "G" .

Form 1040-NR - Domestic Production Activities Deduction (Form 8903)
  1. "X" any amount claimed.

Form 1040-NR - Itemized/Standard Deductions
  1. For TY16, do not correspond for Schedule A if the taxpayer is a student/business apprentice of India and the amount on line 12a equals the Form 4684 amount plus the standard deduction. Dummy Schedule A and edit the amount on lines 7 and 8.

  2. See Job Aid 2513-701 in the prior year section for standard deductions for residents of India (student or business apprentices).

Form 1040-NR, Line 12b - Charitable Contributions for Certain Residents of India (TY21 and TY20)
  1. For TY21 and TY20, if there is an entry on this line, "X" line 12b if the taxpayer does not indicate that they were a resident of India on Schedule OI, line B.

Form 1040-NR, Line 31 - Other Payments and Refundable Credits (Schedule 3, Line 15)
  1. For TY22 only, if there is an amount on line 31, and a notation of "IRA22DPE" , "CHIPS22DPE" , "IRA22TRE" , or something similar is present here or elsewhere on the return, indicating a Deemed Payment Election (DPE) is being claimed, follow these instructions:

    1. If "IRA22DPE" , "CHIPS22DPE" , or something similar is notated, edit CCC "3" and RPC "5" .

    2. If "IRA22TRE" or something similar is notated, edit RPC "5" .

    3. Fully code the return, and then pull to be rebatched under the original program using "DPE" as the Batch ID.

  2. For additional instructions, see IRM 3.11.3.

Form 1040-NR, Schedule 3, Line 5 - Residential Energy Credits (Form 5695, Line 15) (TY22 and Prior)
  1. For TY22 and prior, if an amount is claimed on line 5, Form 5695 must be attached. If missing and the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond for Form 5695.

    Note:

    If an amount is claimed on line 5 and only Form 5695, page 2 is attached, delete the amount on line 5.

  2. For TY22 and prior, when an amount is claimed on line 5, renumber line 5 as line 5a.

Form 1040-NR, Schedule 3, Line 6f - Qualified Plug-In Motor Vehicle Credit (TY22 and Prior)
  1. For TY22 and prior, if there is an amount on line 6f, Form 8936 must be attached. If missing, correspond for Form 8936.

Form 1040-NR, Schedule 3, Line 13a - Deemed Payment Election (DPE) (TY22 Only)
  1. For TY22 only, see IRM 3.21.3.86.15.12.

Form 1040-NR, Schedule 3, Line 13b (12b for TY20) (SFL) - Credit for Qualified Sick and Family Leave Wages (TY20, TY21, and TY22)
  1. For TY22, when an amount is claimed on line 13b, Schedule H must be attached. If missing, correspond for Schedule H.

  2. For TY21 and TY20, when an amount is claimed on line 13b (TY21) or line 12b (TY20), Schedule H and Form 7202 must be attached. If either or both are missing, correspond for Schedule H and/or Form 7202.

  3. For TY22 and TY21, when an amount is claimed on line 13b, renumber line 13b as "SFL" .

  4. For TY20, when an amount is claimed on line 12b, renumber line 12b as "SFL" .

Form 1040-NR, Schedule 3, Line 13g - Credit for Child and Dependent Care Expenses (Form 2441) (TY21 Only)
  1. For TY21 only, when an amount is present, Form 2441 with an entry on line 10 must be attached. If missing, correspond for Form 2441.

Form 1040-NR, Schedule 3, Line 13h (SL2) - Credit for Qualified Sick and Family Leave Wages (TY21 and TY22)
  1. For TY22, when an amount is claimed on line 13h, Schedule H must be attached. If missing, correspond for Schedule H.

  2. For TY21, when an amount is claimed on line 13h, Schedule H and Form 7202 must be attached. If either or both are missing, correspond for Schedule H and/or Form 7202.

  3. For TY22 and TY21, when an amount is claimed on line 13h, renumber line 13h as "SL2" .

Form 1040-NR, Schedule A - Other Itemized Deductions
  1. "X" line 7 when the amount on Form 1040-NR, line 11 is over:

    Tax Year FSC 1 FSC 3 or 6 FSC 5
    2017 $261,500 $156,900 $313,800
    2016 $259,400 $155,650 $311,300
    2015 $258,250 $154,950 $309,000
    2014 $254,200 $152,525 $305,050
    2013 $250,000 $150,000 $300,000

  2. For TY12 and prior, do not "X" the amount for Other Miscellaneous Deductions.

Form 1040-NR, Schedule C-EZ (Sequence 09, 10, 11) - Net Profit From Business
  1. Process following Schedule C instructions.

  2. For additional instructions, see IRM 3.11.3.

Form 1040-NR - Self-Employment Tax
  1. For TY09 and prior, if the taxpayer indicates that they are paying Self-Employment (SE) tax on Form 1040-NR, "X" SE tax or half of SE tax where found.

    Caution:

    If there is an amount on line 8 and the taxpayer does not indicate that it is SE income, take no action.

Form 1040-NR - Gambling Winnings
  1. Gambling winnings are non-effectively connected income and are not reducible by gambling losses.

    Exception:

    Residents of Canada may claim losses but only to the extent of winnings.

    Exception:

    Professional gambling income is effectively connected and is reported on Schedule 1, page 1 with supporting Schedule C for TY19 and later, or on Form 1040-NR, page 1 with supporting Schedule C prior to TY19.

  2. Gambling income won in the U.S. by residents of the following foreign countries is not taxable by the U.S.:

    Country Country
    Austria Lithuania
    Belgium Luxembourg
    Bulgaria Netherlands
    Czech Republic Russian Federation/Russia
    Denmark Slovak Republic/Slovakia
    Finland Slovenia
    France South Africa
    Germany Spain
    Hungary Sweden
    Iceland Tunisia
    Ireland Turkey
    Italy Ukraine
    Japan (effective 2005) United Kingdom (includes notations of Great Britain, England, Northern Ireland, Scotland, and Wales)
    Latvia  

    Reminder:

    If line 11 is blank, dash, zero, or edited to be blank and line 23a is significant, edit RPC "J" .

  3. All other countries not listed in IRM 3.21.3.86.15.22 (2) are taxed at 30%.

    Exception:

    Malta is taxed at 10% starting in 2011.

  4. If gambling winnings are reported on Form 1040-NR, page 1 or Schedule 1, and the taxpayer is not a professional gambler:

    1. "X" the amount on page 1, or if found on Schedule 1, "X" Schedule 1, line 9.

    2. Multiply the amount of gross gambling winnings by 30%, and edit the result to Form 1040-NR, line 23a.

    3. Do not adjust or compute line 24.

Form 1040-NR-EZ - General Instructions

  1. Form 1040-NR-EZ is obsolete. Form 1040-NR-EZ was a simplified version of Form 1040-NR which was available to certain taxpayers with no dependents.

  2. Convert all Form 1040-NR-EZ to current year Form 1040-NR for transcription. This may be done by either:

    1. Renumbering Form 1040-NR-EZ, and attaching Schedule 1 through Schedule 3 or Form 6114-A, as needed, or

    2. Using Form 13899 to convert Form 1040-NR-EZ, and attaching Schedule 1 through Schedule 3 or Form 6114-A, as needed.

  3. Form 1040-NR-EZ should be processed using the instructions for Form 1040-NR, unless otherwise stated.

  4. Convert Form 1040-NR-EZ as follows:

    Form 1040-NR-EZ Line or Item: Type: Convert By/To:
    Form Title (Form 1040-NR-EZ) T-Line Circle "EZ."
    Caption Information
    • Tax Period

    • TIN

    • Taxpayer Name

    • Additional Information Line

    • Street Address

    • City/State/Province

    • Mail Routing Code

    • Country Code

    T-Line Edit on the Form 1040-NR-EZ following normal Form 1040-NR procedures.
    SPC Code T-Line Edit in the upper-right margin above the Country Code on Form 1040-NR-EZ.
    Filing Status T-Line Edit FSC "3" if the taxpayer marked only box 2. Otherwise, edit FSC "1" .
    1. Renumbering: Edit in the area to the left of the filing status boxes on Form 1040-NR-EZ.

    2. Converting: Edit in the area to the left of the filing status boxes on Form 13899.

    CCC Code T-Line Edit in the area to the right of the filing status boxes on Form 1040-NR-EZ.
    Line 3 T-Line Line 1a
    Line 4 T-Line Schedule 1, line 1
    Line 5 T-Line Schedule 1, line 8r or Form 1040-NR, line 1a. See IRM 3.21.3.86.15.6.
    Line 6 T-Line Line 1k
    Line 7 T-Compute Line 9
    Received Date T-Line
    1. Renumbering: Edit in the blank space above line 8 of Form 1040-NR-EZ.

    2. Converting: Edit in the blank space above the Dependent First Name on Form 13899.

    Line 8 T-Line Line 10c. See IRM 3.21.3.86.15.8.
    Line 9 T-Line Schedule 1, line 21
    Line 10 T-Compute Line 11
    Line 11 T-Line See IRM 3.21.3.86.16.2, Itemized Deductions on Form 1040-NR-EZ.
    Line 14 T-Compute Line 15
    Line 15 T-Line Line 16
    Line 16 T-Line Schedule 2, line 7
    Line 17 T-Compute Line 24
    Line 18a T-Line Line 25d
    Line 18b T-Line Line 25g
    Line 19 T-Line Line 26
    Line 20 T-Line Line 29
    Line 21 T-Compute Line 33
    RPC Code T-Line Edit to the lower-left margin of page 1 of Form 1040-NR-EZ.
    Line 23a T-Compute
    1. Renumbering: Edit as line 35a on Form 1040-NR-EZ.

    2. Converting: Edit to line 35a of Form 13899.

    Line 23b T-Line Line 35b on Form 1040-NR-EZ
    Line 23c T-Line Line 35c on Form 1040-NR-EZ
    Line 23d T-Line Line 35d on Form 1040-NR-EZ
    Line 24 T-Line Line 36
    Line 25 T-Compute Line 37
    Line 26 T-Line Line 38
    Signature Area:
    • Third Party Designee Checkbox

    • Third Party Designee Name

    • Third Party Designee PIN

    • IP Pin

    • Preparer SSN or PTIN

    • Preparer EIN

    • Preparer Phone Number

    • Preparer Code

    T-Line Edit on the Form 1040-NR-EZ following normal Form 1040-NR procedures.
    Action Code T-Line Edit in the bottom-center margin of Form 1040-NR-EZ.
    Audit Code T-Line Edit in the bottom-right margin of Form 1040-NR-EZ.
    Form 1040-NR-EZ, Page 2 (Schedule OI)   "X" Form 1040-NR-EZ, page 2.

    Reminder:

    Do not transfer third party information, direct deposit information, or paid preparer information when using Form 13899 to convert.

  5. Refer to Job Aid 2513-701 for an illustration of converting Form 1040-NR-EZ.

Processing Form 1040-NR-EZ
  1. Do not correspond if there are indications of conditions which are not eligible for Form 1040-NR-EZ, but which are valid for Form 1040-NR in the tax year filed. Convert the additional items following Form 1040-NR instructions.

  2. Review the return following the instructions cited below. Line numbers are for TY19 Form 1040-NR-EZ.

    Condition Then
    Government Service Treaty Verify taxpayer holds an A-1 or A-2 Visa, and see Exhibit 3.21.3-14.
    Line 3: Wages See IRM 3.21.3.84.8.1.
    Line 5: Scholarship and Fellowship Grants If an amount is present, see IRM 3.21.3.86.15.6.
    Line 6: Total Income Exempt by Treaty (Page 2, Schedule OI, Item J) If an amount is present, see IRM 3.21.3.84.8.6.
    Line 8: Scholarship and Fellowship Grants Excluded If an amount is present, see IRM 3.21.3.86.15.8.
    Line 10: Adjusted Gross Income See IRM 3.21.3.84.9.2.
    Line 11: Itemized Deductions Continue to IRM 3.21.3.86.16.2, Line 11 - Itemized Deductions on Form 1040-NR-EZ.
    Line 14: Taxable Income See IRM 3.21.3.84.10.3.
    Line 15: Tax If the taxpayer indicates, "Exempt" or "Treaty," see IRM 3.21.3.84.10.4.
    Line 16: Unreported Social Security and Medicare Tax If an amount is present, see IRM 3.21.3.84.20.5.
    Line 17: Total Tax See IRM 3.21.3.84.12.4.
    Line 18a: Withholding from Form 1042-S See IRM 3.21.3.84.13.2.
    Line 18b: Withholding from Form 1042-S See IRM 3.21.3.84.13.5.
    Line 19: Estimated Tax Payments Correct any misplaced entries if they are determined not to be estimated tax payments.
    Line 21: Total Payments See IRM 3.21.3.84.13.13.
    Line 23a: Refund Due See IRM 3.21.3.84.14.1.
    Line 23e: Refund Check See IRM 3.21.3.83.6 for manual refund procedures.
    Line 24: Estimated Tax Credit Elect See IRM 3.21.3.84.14.4.
    Line 25: Amount You Owe (Balance Due) See IRM 3.21.3.84.14.5.
    Signature See IRM 3.21.3.84.15.
    Identify Protection Personal Identification Number (IP PIN) See IRM 3.21.3.84.17.
    Preparer Data See IRM 3.11.3.14.8.

    Exception:

    Do not edit the E-File Waiver Indicator on Form 1040-NR-EZ.

  3. All T-Line information must be transferred when converting.

    Exception:

    Do not transfer third party information, direct deposit information, or paid preparer information when using Form 13899 to convert.

Line 11 - Itemized Deductions on Form 1040-NR-EZ
  1. If an amount is present on Line 11, total any amounts withheld on Form W-2 or similar statements, or on Form 1042-S, for state and/or local income taxes (including state disability insurance). Take appropriate actions according to the table below, whether or not there are any withholding documents attached:

    If the line 11 amount And Then
    Includes only state and local income taxes (including possible state disability insurance)   Dummy Schedule A to include the amount for state and local taxes (including possible state disability insurance) on Lines 1a and 8.
    Includes withholding for federal income tax (Form W-2, box 2 or Form 1042-S)   Dummy Schedule A to include only the amount for state and local taxes on Line 1a and 8.
    Includes withholding for Social Security Tax (Form W-2, box 4)  
    1. Dummy Schedule A to include only the amount for state and local taxes on Line 1a and 8.

    2. If the taxpayer is an "F" , "J" , "M" , or "Q" visa holder, correspond with a 513C letter and see IRM 3.21.3.84.21.11.

    Taxpayer notation indicates amount includes other than state or local income taxes (job expenses, charitable contributions, etc,) or source of amount cannot be determined   If Schedule A, Form 1040-NR cannot be dummied based on the information provided and IRM 3.21.3.84.22, correspond for Form 1040-NR and Schedule A with Form 13900, using the fill-in, "The only itemized deduction you can claim on Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents, is for state and local income taxes. If you want to claim other itemized deductions, complete and submit Form 1040-NR including page 3, Schedule A, Itemized Deductions."
    Can be determined to be a current or prior year standard deduction The taxpayer is NOT a student/business apprentice from India "X" line 11.
    Can be determined to be a current or prior year standard deduction The taxpayer is a student/business apprentice from India Dummy Schedule A by editing the standard deduction on lines 7 and 8.

Attachment Guide

Exhibit3.21.3-1Attachment Guide

(1) Examine all attachments to the return. Leave attachments with the return unless specifically instructed otherwise. Refer to the table below for specific attachment-by-attachment instructions.

Note:

See IRM 3.11.3 if not found within this list.

Reminder:

Do not detach attachments (except remittance) when sending the return back to the taxpayer.

FORM/DOCUMENTS DETACH ACTION REQUIRED
CP-01A, We Assigned You An Identity Protection Personal Identification Number (IP-PIN)
  1. With related correspondence requiring a response

  2. Without related correspondence

  1. Yes

  2. No

Ensure the names(s) on the CP-01A and the tax return match. If the names do not match and no related correspondence is present, detach for workleader who will destroy CP-01A in accordance with classified waste procedures. If an IP-PIN is present on the tax return meeting this criteria, delete the IP-PIN.
If the name(s) on the CP-01A and the tax return match, verify the IP-PIN on the CP-01A is present on the tax return. If it is not present, edit the IP-PIN in the boxes designated for the Identity Protection PIN.
  1. Route CP-01A and related correspondence and route to KCSC
    Stop No, 6566 P5.

  2. Move CP-01A to the back of the return and continue processing

CP 01H - ID Theft Lock No Route the entire return to ECU (Entity Control Unit)

Exception:

Do not route CP 01H that is "X" -ed.

LTR 2358C
  1. Numbered

  2. Unnumbered

  1. No

  2. No

  1. Edit Action Code "331" .

  2. Route to Exam.

LTR 2894C/SP, Individual Return Incomplete for Processing: Form 1040-PR and Form 1040-SS No Route to Rejects Stop 6126 AUSC.

Exception:

Do not route to Rejects, and continue processing if:
• "Process as Original" is present on the return.
• The letter date is more than 60 calendar days prior to the current date.

LTR 4087C, Individual Return Incomplete for Processing: Form 1040, Form 1040A (2017 and prior), Form 1040EZ (2017 and prior) No Route to Rejects Stop 6126 AUSC.

Exception:

Do not route to Rejects, and continue processing if:
Process as Original is present on the return.
• The letter date is more than 60 calendar days prior to the current date.

LTR 4883C - Potential Identity Theft during Original Processing No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
LTR 5071C - Potential Identity Theft during Original Processing with Online Option No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
LTR 5216 - Taxpayer Cannot Authenticate No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
LTR 5447C - Potential Identity Theft during Original Processing; Foreign Address No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
LTR 5747C - Potential Identity Theft during Original Processing - TAC AUTH ONLY No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
LTR 6167C - Identity Authentication Incomplete (IMF) No Do not process. Route the entire return and attachments to RIVO Stop 6579 AUSC.
May include photocopies of passport, SS card, driver’s license, etc. and Form 14039.
Form W-2, W-2G, etc. - Wage and Tax Statement
  1. Any related copy

  2. Unrelated or loose copy

  3. Employer’s copy submitted with Schedule H

  1. No

  2. Yes

  3. Yes

  1. Take no action.

  2. Route to Accounts Management

  3. Route to Receipt and Control

Form W-7/W-7(SP) - Application for IRS Individual Taxpayer Identification Number (ITIN)
  1. Unnumbered

  2. Numbered

No
  1. Follow local procedures to route ITIN unit if unnumbered

  2. See IRM 3.21.3.12.2.4 if numbered

Form W-7A - Application for IRS Adoption TIN No Do not detach Form W-7A from the return. Route to Entity. Do NOT send Letter 86C. When the ATIN unit sends the return back through processing after the ATIN has been assigned, they will edit for example, "02 RPC 05-14-2024" in the left side margin for the date the ATIN was assigned on refund returns only. Edit this date on the Edit Sheet, if current date is after the filing due date.
Form W-9 - Request for Taxpayer Identification and Certification No If attached with correspondence, route to Accounts Management
If attached with no correspondence, take no action
Form 390 - A.S. Individual Income Tax Return
  1. Original

  2. Duplicate

  1. Yes

  2. No

  1. Transship return to American Samoa at:

    • American Samoa Tax office

    • Executive Office Bldg.

    • First Floor

    • Pago Pago, AS 96799.

  2. No action required.

Form 843 - Claim for Refund and Request for Abatement Yes Route to Accounts Management.

Note:

Refer to IRM 3.21.3.84.21.11

Note:

If Form 8316 is also attached with Form 843, they must remain together.

Form 911 - Request for Taxpayer Advocate Service assistance (And Application for a Taxpayer Assistance Order) Yes Route the Form 911 to Taxpayer Advocate Service, and continue processing the return.
Form 926 - Return by a U.S. Transferor of Property to a Foreign Corporation No Edit Audit Code "H" and continue processing the return.
Form 982 - Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) No Edit the Form 982 Indicator Code "1" on dotted portion of Schedule 1, Line 11. If Schedule 1 is not attached, dummy Schedule 1 by editing the Indicator Code.
Form 1040-C - U.S. Departing Alien Income Tax Return No Edit CCC "Y" and an action trail.
Form 1040-ES - Estimated Tax for Individuals No If remittance is attached for 1040-ES, refer to the manager.
Form 1040 Guam Individual Income Tax Return No Transship return to Guam at:
  • Department of Revenue and Taxation

  • Taxpayer Services Division

  • P.O. Box 23607

  • Barrigada, GU 96921.

Form 1040AS No Transship return to American Samoa.
Form 1040-V - Payment Voucher
  1. Without Remittance

  2. With remittance and unnumbered

  3. With remittance and numbered

  1. No

  2. No

  3. No

  1. Take no action if it does not obstruct T-lines. If it does obstruct T-lines, move voucher to the back of return and continue processing.

  2. Route the entire return to Receipt and Control via your manager.

  3. Consult your Work leader.

Form 1042 - Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Yes Transship to Ogden Service Center (OSC.)
Form 1042-S - Foreign Persons U.S. Source Income Subject to Withholding No Refer to IRM 3.21.3.84.13.5
Form SSA-1042S - Social Security Benefit Statement or
Form RRB-1042S - Statement for Nonresident Aliens Recipients of Payments by the Railroad Retirement Board
No Refer to IRM 3.21.3.83.12
Form 1045 - Application for Tentative Refund
  1. Original Form 1040 or Form 1040-NR

    1. Return posted (TC 150 present)

    2. Return not posted (no TC 150)

  2. Photocopied Form 1040 or Form 1040-NR which is unnumbered.

  3. Photocopied Form 1040 or Form 1040-NR which is numbered.

  4. Photocopied Form 1045 without page 1

  1. No

  2. Yes



 
  • No

  • No

  • No

  1. Research for a TC 150

    1. Move the Form 1045 to the front of the return and route the entire package to Accounts Management

    2. Take the following actions:

      • Edit the received date to the front of Form 1045.

      • Photocopy Page 1 and 2 of Form 1040 or Form 1040-NR and appropriate forms/schedules.

      • Forward Form 1045 and copies to Accounts Management.

      • Process original Form 1040 or Form 1040-NR.

        Note:

        Correspond for any missing information.

  2. Edit the received date to the front of Form 1045. Route to entire package to Accounts Management.

  3. Edit Action Code "640" on Form 1040 or Form 1040-NR and route Form 1045 to Accounts Management.

  4. Take no action.

Form 1065 - U.S. Return of Partnership Income
  1. Signed original 1065 or signed photocopy of 1065

  2. Unsigned photocopy of 1065

  1. Yes

  2. No

  1. Route to Receipt and Control.

    Note:

    Include any related Schedules K-1.

  2. Take no action.

Form 1096 - Annual Summary and Transmittal of U.S. Information Returns Yes Route Form 1096 and copies "A" of Form 1099 to Receipt and Control.
Form 1120 (series) - U.S. Corporation Income Tax Return Yes Route to Receipt and Control.

Note:

Include any related Schedules K-1.

Form 1127 - Application for Extension of Time for Payment of Tax Due to Undue Hardship Yes
  1. Edit the return received date, if present, in the upper-right corner of Form 1127. Attach a photocopy of the taxpayer's envelope, if present.

    Exception:

    If the return is timely, do not edit a received date and do not attach a photocopy of the taxpayer's envelope.

  2. Route to Receipt and Control

Form 1128 - Application to Adopt, Change or Retain Tax Year No Documentation for a Short Period Return. Refer to IRM 3.11.3.
Form 1310 - Statement of Person Claiming Refund Due a Deceased Taxpayer No Refer to IRM 3.11.3.
Form 2031 - Revocation of Exemption from Self-Employment Tax for use by Ministers, Members of Religious Orders and Christian Science Practitioners Yes Mail to:
  • Internal Revenue Service

  • Stop 14M

  • ATTN: Exemption Revocation

  • P.O. Box 12261

  • Covington, KY 41012-0261

Form 2159 - Payroll Deduction Agreement Yes Route to Compliance Services Collections Operation (CSCO)
Form 2210 or Form 2210-F - Underpayment of Estimated Tax by Individuals, Estates and Trusts No
  • For Form 1040, see IRM 3.11.3.

  • For Form 1040-NR and Form 1040-NR-EZ, see IRM 3.21.3.84.14.6.

Form 2275 - Records Request, Charge and Recharge No Edit DLN, if present and received date on Form 2275. Staple to the back of the return so that form shows at least one inch above top.
Form 2350 - Application for Extension of Time to File U.S. Income Tax Return No Support for Schedule 3, line 10.
Form 2439 - Notice to Shareholders of Undistributed Long-Term Capital Gains No Support for Schedule 3, line 13a of Form 1040 or Form 1040-NR. Refer to IRM 3.11.3.
Form 2848 - Power of Attorney (POA) and Declaration of Representative Yes Detach all originals and copies of Form 2848, including the white paper. The white paper is also considered to be a 3rd page of the POA and must remain with the POA. This includes Forms 2848 which cite Treasury Regulation 1.6012(a)(5) or 1.6012-1(b)(3)USAID/G/HCD/POSS/TAX.
Send to the following address following local procedures:
  • PAMC International CAF

  • STOP 4-H14.123

  • 2970 Market Street

  • Philadelphia, PA 19104 - 5016

Caution:

The white page must remain with the Form 2848, including Form 8821 in order for the POA to be processed.
Look for any additional pages related to the Power of Attorney, and keep all of them attached to the POA.

Form 3439 - Statement of Annual Income (Individual) No Route the entire return to Collections.
Form 3449 - Referral Report No Edit DLN, if present and received date on Form 3449. Staple to the back of the return so that the form shows at least one inch above the top.
Form 3465 - Adjustment Request No Edit DLN, if present and received date on Form 3465. Staple to the back of the return so that the form shows at least one inch above the top.
Form 3468 - Investment Credit No Support for Form 3800. See IRM 3.11.3.
Form 3520 - Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts No Edit Audit Code "H" and continue processing.
Form 3520-A - Annual Return of Foreign Trusts with U.S. Owner (Under IRC 6048(b)) No Edit Audit Code "H" and continue processing.
Form 3903 - Moving Expenses No Support for Schedule 1, line 14 of Form 1040 or Form 1040-NR.
Form 3911 - Taxpayer Statement Regarding Refund Yes Route to Refund Inquiry.
Form 4029 - Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
  1. Original

  2. Photocopy of approved application, Form 4029

  1. Yes

  2. No

  1. Route immediately to the Compliance function at:

    • Philadelphia Campus

    • 4-G08-151

    • 2970 Market Street

    • Philadelphia, PA 19104

  2. Refer to IRM 3.11.3

Form 4361 - Application for Exemption from Self-Employment Tax for use by Ministers, Members of Religious Orders, and Christian Science Practitioners
  1. Original

  2. Photocopy or approved application of Form 4361

  1. Yes

  2. No

  1. Edit envelope Postmark Date (or received date if an envelope is not attached) on Form 4361 and route it, along with any additional copies of Form 4361 to the Compliance Function at:

    • Internal Revenue Service

    • Philadelphia, PA 19255-0733

  2. Refer to IRM 3.11.3.

Form 4506 and Form 4506-T - Request for Copy of Tax Return Yes Route to Receipt and Control.
Form 4506F - A Request for a Copy of Fraudulent Tax No Route to Accounts Management
Form 4549 - Income Tax Examination Changes Yes Route to Examination or to Exam Field Support (EFS) at Mail stop 632-2 if shown on return envelope.
Form 4563 - Exclusion of Income for Bona Fide Residents of American Samoa No Refer to IRM 3.21.3.76.1 and IRM 3.21.3.76.1.3
Form 4810 - Request for Prompt Assessment Under Internal Revenue Code 6501(d) Yes Route Form 4810 and a copy of the letters of Testamentary, if present, to Examination.
Form 4868 - Application for Automatic Extension of Time to File U.S. Individual Income Tax Return No Refer to IRM 3.21.3.8.4 and IRM 3.11.3
Form 4970 - Tax on Accumulation Distribution of Trusts No Refer to IRM 3.11.3.
Form 5074 - Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Island (CNMI) No Refer to IRM 3.21.3.77.1.2 and IRM 3.21.3.78.1.2
Form 5471 - Information Return of U.S. Persons with Respect to certain Foreign Corporations, Form 5471 Schedule G-1, or another schedule supporting Form 5471 No Edit Audit Code "H" and FPC "W" and continue processing.
Form 5472 - Information Return of Foreign Owned Corporation No Edit Audit Code "H" and continue processing.
Form 5495 - Request for Discharge from Personal Liability under IRC 6905 No Route to Examination.
Form 5500-EZ - Annual Return of A One-Participant (Owners and Their Spouses) Retirement Plan and Foreign Plan Yes Route to OSC.
Form 5564 - Notice of Delinquency - Waiver
  1. From Examination

  2. From Collection

  3. From Underreporter (URP)

  1. Yes

  2. No

  3. Yes

  1. Route to Examination.

  2. Route entire return to Collection.

  3. Route to Underreporter.

Form 5884 - Work Opportunity Credit No Support for Form 3800. Refer to IRM 3.11.3.
Letter 5935 - (Form 15023) Yes Misrouted or Loose, route to LB&I, Stop 4301 AUSC
Form 6478 - Biofuel Producer Credit No Support for Form 3800. Refer to IRM 3.11.3.
Form 6497 - Information Return of Nontaxable Energy Grants or Subsidized Energy Financing Yes Route form to:
  • LB&I Central Compliance Practice Area

  • 1919 Smith Street M/S 1000-HOU

  • Houston, TX 77002

Form 6513 - Extension of Time to File Not Allowed
  1. With a letter of disagreement or cancelled check

  2. By itself

  1. Yes

  2. No

  1. Route the form and letter (or cancelled check) to Accounts Management.

  2. Take no action.

Form 6765 - Credit for Increasing Research Activities No Support for Form 3800. See IRM 3.11.3.
Form 6781 - Gains and Losses From Section 1256 Contracts and Straddles No If the taxpayer notes Deferred tax from Form 6781 on or near line 38 Form 1040 or Form 1040-NR:
  1. Edit CCC "3" .

  2. Edit Action Code "620" .

  3. Attach Form 4227 and notate Tax Straddle Investment.

Form 7004 - Application for Automatic 6 - Month Extension of Time to File Certain Business Income Tax, Information and Other Returns Yes Route to Receipt and Control.
Form 7202 - Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals (TY20 and TY21 only) No Support for Schedule 3, lines 13b and 13h.
Form 8082 - Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) No Edit Audit Code "Q" and continue processing.
Form 8275 and Form 8275-R - Disclosure Statement/Regulation Disclosure Statement No Edit Audit Code "K" and continue processing.
Form 8283 - Noncash Charitable Contributions No Support for Schedule A. Refer to IRM 3.21.3.84.22.3 and IRM 3.11.3.
Form 8288 - U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons
  1. Original

  2. Copy

  1. Yes

  2. No

  1. Route to OSC

  2. Take no action.

    Note:

    Cannot be used as FIRPTA verification of withholding.

Form 8288-A - Statement of Withholding on Certain Dispositions by Foreign Persons No See IRM 3.21.3.84.13.4
Form 8288-B - Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests Yes

Note:

Be sure to edit ITIN number before detaching.

Route to OSC:
  • Director, OSC Accounts Management Operation

  • 1973 N. Rulon White Boulevard

  • Ogden, UT 84404

Note:

Send only originals and not copies to OSC.

Form 8302 - Electronic Deposit of Tax Refund of $1 Million or More No Take no action in regards to Form 8302. Refer to IRM 3.11.3.14.3.1(3)
Form 8316 - Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, M or Q Type Yes Route to Accounts Management.

Note:

If Form 843 is also attached with Form 8316, they must remain together.

Form 8379 - Injured Spouse Claim and Allocation No Refer to IRM 3.11.3.
Form 8396 - Mortgage Interest Credit No Support for Schedule 3, line 6g. Refer to IRM 3.11.3.
Form 8404 - Interest Charge on DISC-Related Deferred Tax Liability Yes Route to Receipt and Control.
Form 8453 - U.S. Individual Income Tax Transmittal for an IRS e-file Return No When Form 8453 is on top of the return, route the entire return to Receipt and Control. Otherwise, take no action.
Form 8586 - Low-Income Housing Credit No Refer to IRM 3.11.3.
Form 8609 - Low-Income Housing Credit Allocation Certification No Support for Form 8586. Refer to IRM 3.11.3.
Form 8611 - Recapture of Low-Income Housing Credit (LIHCR) No Support for Schedule 2, Line 16. Refer to IRM 3.11.3
Form 8621 - Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund No "X" Form 8621.
Form 8689 - Allocation of Individual Income Tax to the US Virgin Islands No Refer to IRM 3.21.3.79.1.2
Form 8697 - Interest Computation Under the Look-Back Method for Completed Long-Term Contracts
  1. Refund or Amended Return (line 9, Form 8697)

  2. Zero or Balance Due (line 10, Form 8697)

  1. Yes

  2. No

  1. Route Form 8697 to Accounts Management.

  2. Take no action.

Form 8801 - Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts No Support for Schedule 3, line 6b (Form 1040 and Form 1040-NR). Refer to IRM 3.11.3.
Form 8804 Series (including Form 8804C) - Annual Return for Partnership Withholding Tax (Section 1446)
  1. Original

  2. Duplicate

  1. Yes

  2. No

  1. Route to OSC.

  2. Take no action.

Form 8805 - Foreign Partners Information Statement of Section 1446 Withholding Tax No Support for Form 1040-NR, line 25e. See IRM 3.21.3.84.13.3
Form 8813 - Partnership Withholding Tax Payment Voucher (Section 1446)
  1. Original

  2. Duplicate

  1. Yes

  2. No

  1. Route OSC.

  2. Take no action.

Caution:

If remittance is attached refer to Manager or Work Leader.

Form 8815 - Exclusion of Interest from Series EE and I U.S. Savings Bonds Issued after 1989 No Support for Schedule B, line 3 - Refer to IRM 3.11.3.
Form 8820 - Orphan Drug Credit No Support for Form 3800. Refer to IRM 3.11.3.
Form 8821 - Tax Information Authorization Yes Detach all originals and copies of Form 8821, including 3rd page (white paper).
Send to the following address following local procedures:
PAMC International CAF
STOP 4-H14.123
2970 Market Street
Philadelphia, PA 19104-5016.

Note:

Look for any additional pages related to the authorization, including Form 2848 and/or General Power of Attorney, and keep all documents attached.

Form 8822 - Change of Address
  1. Change of Address

  2. Box 1 or no box is checked

  3. Box 2 is checked

  1. No

  2. No

  3. Yes

  1. Edit the new address from Form 8822 to the caption area unless there is an indication that the address is not permanent.

  2. Take no action

  3. Route Form 8822 to Entity Control.

Form 8826 - Disabled Access Credit No Support for Form 3800.
Form 8828 - Recapture of Federal Mortgage Subsidy No Support for total tax on Form 1040, line 24.

Note:

"X" Form 8828.

Form 8829 - Expenses for Business Use of Your Home No Support for Schedule C, line 30. Refer to IRM 3.11.3.
Form 8830 - Enhanced Oil Recovery Credit No Support for Form 3800.
Form 8833 - Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

Note:

The headings of the statement must read Treaty-Based Return Position Disclosure Under or Section 6114 or 7701(b).

No Edit CCC "C" on Form 1040-NR.
Form 8835 - Renewable Electricity, Refined Coal, and Indian Coal Production Credit No Support for Form 3800.
Form 8840 - Closer Connection Exception Statement for Aliens No Take no action.
Form 8843 - Statement for Exempt Individuals and Individuals with a Medical Condition No Take no action
Form 8845 - Indian Employment Credit No Support for Form 3800. Refer to IRM 3.11.3.
Form 8846 - Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips No Take no action.
Form 8849 - Claim for Refund of Excise Taxes No Edit CCC "Y" , and leave an action trail.
Form 8854 - Initial and Annual Expatriation Information Statement
  1. Unnumbered return:

    1. No stamp indicating LB&I reviewed return

    2. Stamp indicating LB&I reviewed return

  2. Numbered return

  1. No

  2. No

    1. Stop coding. Route entire return containing Form 8854 to Stop 4301 AUSC.

    2. Edit Audit Code "K" , and continue processing as normal.

  1. Edit Audit Code "K" , and continue processing as normal.

Form 8857 - Request for Innocent Spouse Relief Yes Expedite on a daily basis Form 8857 and any supporting documentation to CSPC at the following address:
  • Internal Revenue Service

  • CSO (Campus Support Operation)

  • Stop #840F

  • 7940 Kentucky Drive

  • Florence, KY 41042

Caution:

Form 8857 must be received by CSPC within 10 days of receipt by the IRS.

Note:

Edit CCC "3" and leave an action trail on both Forms.

Form 8859 - District of Columbia First-Time Homebuyer Credit No Support for Schedule 3, line 6h. Refer to IRM 3.11.3.
Form 8862/8862(SP) - Information to Claim Certain Refundable Credits After Disallowance No (1) For TY17 and later, edit an Audit Code as listed below and continue processing:
  • "U" when Part II EIC portion of the form is completed.

  • "2" when Part III CTC/ACTC portion of the form is completed.

  • "3" when Part IV AOTC portion of the form is completed.

Note:

"X" Form 8862


(2) For TY16 and prior, edit Audit Code "U" when Form 8862 is attached.
Form 8865 - Return of U.S. Persons With Respect to Certain Foreign Partnerships No Edit FPC "X" when Form 8865 is attached to the return (Form 1040 or 1040-NR).
Form 8885 - Health Coverage Tax Credit (TY21 and prior) No Support for Schedule 3, line 13c (Form 1040/1040-NR) or support for Form 1040-SS/PR, Part I, line 10.
Form 8886 - Reportable Transaction Disclosure Statement No Edit FPC "J" and continue processing.
Form 8898 - Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession
  1. No stamp indicating LB&I reviewed return

  2. Stamp indicating LB&I reviewed return

  1. No

  2. No

  1. Stop coding. Route entire return to Stop 4301 AUSC.

  2. Continue processing as normal.

Form 8938 - Statement of Foreign Financial Assets No See processing instructions in IRM 3.11.3.6.2.10, Form 8938, Statement of Foreign Financial Assets. These instructions also apply to Form 1040-NR.
Form 8948 - Preparer Explanation for NOT Filing Electronically No Edit E-File Waiver indicator, see IRM 3.11.3.

Exception:

Do not edit indicator on Form 1040-NR.

Form 8957 - Foreign Account Tax Compliance Act (FATCA) Registration Yes Route to Entity Stop 6182 AUSC
Form 8990 - Limitation on Business Interest Expense for Section 163(J) No Edit FPC "R" when Form 8990 is attached to the return (Form 1040, Form 1040-NR, Form 1040-SS, or Form 1040-PR).
Form 8992 - U.S Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI) No Edit FPC "R" when Form 8992 is attached to the return (Form 1040, Form 1040-NR, Form 1040-SS, or Form 1040-PR).
Form 8993 - Deduction for Foreign-Derived Intangible income and Global Intangible Low-Taxed Income No Edit FPC "R" when Form 8993 is attached to the return (Form 1040, Form 1040-NR, Form 1040-SS, or Form 1040-PR).
Form 8994 - Employer Credit for Paid Family and Medical Leave No Edit FPC "R" when Form 8994 is attached to the return (Form 1040, Form 1040-NR, Form 1040-SS, or Form 1040-PR).
Form 8995-A Schedule A - Specified Service Trades or Businesses No Edit FPC "H" when Form 8995-A Schedule A is attached to the return (Form 1040 or Form 1040-NR).
Form 8995-A Schedule B - Aggregation of Business Operations No Edit FPC "H" when Form 8995-A Schedule B is attached to the return (Form 1040 or Form 1040-NR).
Form 8995-A Schedule C - Loss Netting And Carryforward No Edit FPC "H" when Form 8995-A Schedule C is attached to the return (Form 1040 or Form 1040-NR).
Form 8995-A Schedule D - Special Rules for Patrons of Agricultural or Horticultural Cooperatives No Edit FPC "H" when Form 8995-A Schedule D is attached to the return (Form 1040 or Form 1040-NR).
Form 9465/Form 9465 (SP) - Installment Agreement Request Yes Perfect the Amount Paid and Total Tax Due entries on Form 9465 before routing to Collections at Stop 5501.
Form 13441-A - Health Coverage Tax Credit (HCTC) Monthly Registration and Update Yes Route to AUSC Stop: 6098 – Entity

Exception:

Do not detach if Form 8885 is present.

Form 13844 - Application for Reduced User Fee for Installment Agreements Yes Route the form to Collections.
Form 14039/Form 14039 (SP) - Identity Theft Affidavit
  1. For primary or secondary taxpayer

  2. For child or dependent of the taxpayer

  1. No

  2. Yes

  1. Edit FPC "8" when Form 14039 is attached, or edit FPC "9" when Form 14039 (SP) is attached.

    Note:

    This instruction also applies to the presence of police reports or other white mail that purports to notify the Service of Identity Theft.

  2. Refer to workleader.
    If a taxpayer cites IDT and/or attaches Form 14039, and/or police reports or other supporting documentation and claims that someone has claimed their child/dependent on another tax return, photocopy Form 14039, letter or statement. Attach all photocopied items (Form 14039 and documentation) to the return. Send the original Form 14039 with the documentation to CII/ICT.

    Caution:

    Do not edit FPC "8" or FPC "9" for a dependent filing Form 14039 or Form 14039 (SP).

    Note:

    Route loose Form 14039 or Form 14039 (SP) to CII/ICT.

Form 14095 - The Health Coverage Tax Credit (HCTC) Reimbursement Request Yes Route to AUSC Stop: 6098 – Entity

Exception:

Do not detach if Form 8885 is present.

Form 14653 - Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures No Rebatch the entire package as Streamlined, if not in a Streamlined batch.
Amended Form 14653 - Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures No Route the entire package to LB&I at MS AUSC - 4305.
Form 14654 - Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures No Rebatch the entire package as Streamlined, if not in a Streamlined batch.
Amended Form 14654 - Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures No Route the entire package to LB&I at MS AUSC - 4305.
Form 15023 - Offshore Compliance Status Report (Letter 5935) Yes Route to LB&I if misrouted or detached, Stop 4301 AUSC.
Another Return not listed in this guide (e.g., Form 1120-F) original or signed copy

Exception:

Form 1040X or Form 1040 with Form 1040-NR or Form 1040-NR-EZ, Dual Status or Article XXV.

Yes Route to Receipt and Control.
Identity Theft Documentation - This includes the following:
  • copies of police reports indicating identity theft

  • Form 14039 or Form 14039 (SP), Identity Theft Affidavit

  • Copies of Social Security cards, passports, driver’s licenses, etc.

  • Notation of "IDT"

  • Notation of identity theft on Form 8948 or other attachment.

No See Exhibit 3.21.3-1, Form 14039, or Form 14039 (SP).
IRC 965 - Transition Tax Statement or similar statement/worksheet No Edit RPC "F" . For TY17, also edit CCC "P" and Action Code "300" .

Note:

For TY18 and later, do not edit RPC "F" when Form 965-A is attached without an entry on Schedule 2, line 20 unless an amount is present elsewhere (e.g., Schedule 1, line 8z or Schedule 3, line 13z).

State/U.S. Territory/Country Returns (original or copy with taxpayer’s original signature) Yes Route to Receipt and Control for transshipment to taxpayer’s state, U.S. territory, or country.

Form 1042-S Income Codes

Exhibit3.21.3-2Form 1042-S Income Codes
Form 1042-S
Box 1 Income Code
Current Year
Form 1042-S
Box 1 Income Code
Prior Year (If Different from Current Year)
Description (Type) of Income Where Income is Reported
01   Interest Paid by U.S. Obligors - General Form 1040-NR, Page 1, line 2b or Schedule NEC, line 2c
02   Interest Paid on Real Property Mortgages Page 1, line 2b or Schedule NEC, line 2a
03   Interest Paid to Controlling Foreign Corporations Page 1, line 2b or Schedule NEC, line 2c
04   Interest Paid by Foreign Corporations Page 1, line 2b or Schedule NEC, line 2b
05   Interest on Tax Free-Covenant Bonds No reporting required
06   Dividends Paid by United States Corporations - General Page 1, line 3b or Schedule NEC, line 1a
07   Dividends Qualifying for Direct Dividend Rate Page 1, line 3b or Schedule NEC, line 1b
08   Dividends Paid by Foreign Corporations Page 1, line 3b or Schedule NEC, line 1b
09   Capital Gains Page 1, line 7 or Schedule NEC, lines 9 and 18
10   Industrial Royalties Schedule 1, line 5 or Schedule NEC, line 3
11   Motion Picture or Television Copyright Royalties Schedule 1, line 5 or Schedule NEC, line 4
12   Other Royalties (e.g., Copyright, Software, Recording, Broadcasting, Endorsement Payments) Schedule 1, line 5 or Schedule NEC, line 5
13 TY15 and later Royalties paid on certain publicly offered securities Schedule 1, line 5 or Schedule NEC, line 5
14 13 (TY14 and prior) Real Property Income and Natural Resources Royalties Schedule 1, line 5 or Schedule NEC, line 6
15 14 (TY14 and prior) Pensions, Annuities, Alimony, and/or Insurance Premiums Page 1, line 5b or Schedule NEC, line 7
16 15 (TY14 and prior) Scholarships/Fellowship Grants Page 1, line 1k or Schedule 1, line 8r
17 16 (TY14 and prior) Compensation for Independent Personal Services Schedule 1, line 3 or 9 or Form 1040-NR, line 1k

Exception:

If the income is earned by a nonresident alien for services performed outside the U.S., the income is NOT taxable. Follow the taxpayer's intent if they do not claim the income and the address on the Form 1040-NR is outside of the U.S.

18 17 (TY14 and prior) Compensation for Dependent Personal Services Page 1, line 1a or 1k
19 18 (TY14 and prior) Compensation for Teaching Page 1, line 1a or 1k
20 19 (TY14 and prior) Compensation During Studying and Training Page 1, line 1a or 1k
21 (not valid after TY 2015) 21 (TY15 and prior) Gross Income - Capital Gain Dividend Page 1, line 7 or Schedule NEC, line 9 or 18
22   Interest Paid on Deposit with a Foreign Branch of a Domestic Corporation or Partnership Page 1, line 2b or 1k
23 20 (TY14 and prior) Gross Income - Other Schedule 1, line 9 or Schedule NEC, line 12
24   Qualified Investment Entity (QIE) Page 1, line 7 or Schedule NEC, lines 9 and 18
25   Trust Distributions Subject to IRC Section 1445 Generally not reported
26   Unsevered Growing Crops and Timber Distributions by a Trust Subject to IRC Section 1445 Generally not reported
27   Publicly Traded Partnership Distributions Subject to IRC Section 1446(a) Generally not reported
28   Gambling Winnings Schedule NEC, line 10a or 11 (depending on country of residence)
29   Deposit Interest Schedule NEC, line 12
30   Original Issue Discount (OID) Schedule NEC, line 12
31   Short-Term Original Discount (OID) Schedule NEC, line 9
32   Notional Principal Contract Income Schedule 1, line 9 or Schedule NEC, line 12
33   Substitute Payment - Interest Page 1, line 2b or Schedule NEC, line 2c
34   Substitute Payment - Dividends Page 1, line 3b or Schedule NEC, line 1a
35   Substitute Payment - Other Page 1, line 1k or Schedule NEC, line 12
36   Capital Gains Distributions Page 1, line 7 or Schedule NEC, lines 9 and 18
37   Return of capital Generally not reported
38   Eligible deferred compensation items subject to IRC Section 877A(d)(1) Page 1, line 1a
39   Distributions from a non-grantor trust subject to IRC Section 877A(f)(1) Schedule NEC, line 12
40   Other dividend equivalents under IRC Section 871 (m) Schedule 1, line 9 or Schedule NEC, line 12
41   Guaranteed of Indebtedness Schedule 1, line 9 or Schedule NEC, line 12
42 20 (TY11 and prior) Earnings as an Artist or Athlete without a central withholding agreement. Page 1, line 1a or 1k or Schedule 1, line 3
43   Earnings as an Artist or Athlete with a central withholding agreement Page 1, line 1a or 1k or Schedule 1, line 3
44   Specified Federal procurement payments Schedule 1, line 9
50   Income previously reported under escrow procedure No reporting required
51 TY15 and later

Note:

In TY14, Income Code 51 was "Other Income"

Interest paid of certain actively traded or publicly offered securities Page 1, line 2b or Schedule NEC, line 2
52 TY15 and later Dividends paid on certain actively traded or publicly offered securities Page 1, line 3b or Schedule NEC, line 1
53 TY15 and later Substitute payments - dividends from certain actively traded or publicly offered securities Page 1, line 3b or Schedule NEC, line 1
54 TY17 and later

Note:

In TY15-TY16, Income Code 54 was "Other Income" .

Substitute payments - interest from certain actively traded or publicly offered securities Page 1, line 2b or Schedule NEC, line 2
55 TY19 and later Taxable death benefits on life insurance contracts Schedule 1, line 9 or Schedule NEC, line 12
56 TY22 and later Dividend equivalents under IRC section 871(m) as a result of applying the combined transaction rules Page 1, line 3b
57 TY22 and later Amount realized under IRC section 1446(f) Schedule 1, line 5
58 TY23 and later Publicly traded partnership distributions - undetermined Schedule 1, line 5

Return Processing Codes (RPCs)

Exhibit3.21.3.-3Return Processing Codes (RPCs)
Code Explanation
B International return Form 1040, Form 1040A (TY17 and prior), or Form 1040EZ (TY17 and prior), and EIC is not claimed.
F Taxpayer has included IRC Section 965 claims and/or payments on the return.
G
  1. All income on the return has been exempted by a valid tax treaty, and withholding is present,

  2. Scholarship, stipend, or fellowship grant reported, withholding claimed and neither wages, pensions, and annuities nor Social Security benefits reported,

  3. Gross amount of "scholarship/fellowship" grant has been moved to, or is on, Form 1040-NR, Schedule 1, line 8r, withholding is on Form 1040-NR, line 25d or 25g, and Form 1040-NR, line 1a is zero, blank, or dash,

  4. There is a significant amount on Form 4972, line 6 or 8, and withholding is present, or

  5. Indian Gaming Proceeds (IGP) is present on Form 1040-NR, Schedule 1, Line 8z, and withholding is present.

J Form 1040-NR, line 23a is a significant entry (other than zero), and line 11 is blank, dash, zero, or edited to be blank.
M Unemployment Compensation box checked on Form 8962 for TY21.
S The amount of self-employment income claimed is $434 or more, Schedule SE is not attached, Schedule 2, line 4 does not have a significant entry, and the taxpayer resides in:
  1. Australia

  2. Austria

  3. Belgium

  4. Brazil

  5. Canada

  6. Chile

  7. Czech Republic

  8. Denmark

  9. Finland

  10. France

  11. Germany

  12. Greece

  13. Hungary

  14. Iceland

  15. Ireland

  16. Italy

  17. Japan

  18. Luxembourg

  19. Netherlands

  20. Norway

  21. Poland

  22. Portugal

  23. Slovak Republic/Slovakia

  24. Slovenia

  25. South Korea

  26. Spain

  27. Sweden

  28. Switzerland

  29. United Kingdom (including Great Britain, England, Northern Ireland, Scotland, and Wales)

  30. Uruguay

U Form 8949 attached with code "Z" or "Y" in column (f).
X Indicates LB&I screening of international returns for Revenue Protection.
1 All Dual-Status Returns.

International Organizations and Foreign Governments

Exhibit3.21.3-4International Organizations and Foreign Governments
International Organizations and Foreign Governments
African Development Bank (Ex. Order No. 12403)
African Development Fund (Ex. Order No. 11977)
African Union (Ex. Order No. 13377)
African Union Mission (Ex. Order No. 13444)
Asian Development Bank (Ex. Order No. 11334)
Border Environment Cooperation Commission (Ex. Order No. 12904)
Caribbean Organization (Ex. Order No. 10983)
Commission for Environmental Cooperation (Ex. Order No. 12904)
Commission for Labor Cooperation (Ex. Order No. 12904)
Commission for the Study of Alternatives to the Panama Canal (Ex. Order No. 12567)
Council of Europe in Respect of the Group of States Against Corruption (GRECO) (Ex. Order No. 13240)
Customs Cooperation Council (Ex. Order No. 11596)
European Bank for Reconstruction and Development (Ex. Order No. 12766)
European Central Bank (Ex. Order No. 13307)
European Space Agency (formerly European Space Research Organization - ESRO) (Ex. Order No. 11318/11351/11760/12766)
Food and Agriculture Organization (Ex. Order No. 9698)
Global Fund to Fight AIDS, Tuberculosis and Malaria (Ex. Order No. 13395)
Great Lakes Fishery Commission (Ex. Order No. 11059)
Hong Kong Economic and Trade Offices (Ex. Order No. 13052)
Inter-American Defense Board (Ex. Order No. 10228)
Inter-American Development Bank (Ex. Order No. 10873/11019)
Inter-American Institute of Agricultural Sciences (Ex. Order No. 9751)
Inter-American Investment Corporation (Ex. Order No. 12567)
Inter-American Statistical Institute (Ex. Order No. 9751)
Inter-American Tropical Tuna Commission (Ex. Order No. 11059)
Intergovernmental Maritime Consultative Organization (Ex. Order No. 10795)
International Atomic Energy Agency (Ex. Order No. 10727)
International Bank for Reconstruction and Development (Ex. Order No. 9751)
International Boundary and Water Commission, United States and Mexico (Ex. Order No. 12467)
International Centre for Settlement of Investment Disputes (Ex. Order No. 11966)
International Civil Aviation Organization (Ex. Order No. 9863)
International Civilian Office in Kosovo (Ex. Order No. 13568)
International Coffee Organization (Ex. Order No. 11225)
International Committee of the Red Cross (Ex. Order No. 12643)
International Cotton Advisory Committee (Ex. Order No. 9911)
International Cotton Institute (Ex. Order No. 11283)
International Criminal Police Organization (INTERPOL) (limited privileges) (Ex. Order No. 12425/12971/13524)
International Development Association (Ex. Order No. 11966)
International Development Law Institute (Ex. Order No. 12842)
International Fertilizer Development Center (Ex. Order No. 11977)
International Finance Corporation (Ex. Order No. 10680)
International Food Policy Research Institute (limited privileges) (Ex. Order No. 12359)
International Fund for Agricultural Development (Ex. Order No. 12732)
International Hydrographic Bureau (Ex. Order No. 10769)
International Joint Commission - United States and Canada (Ex. Order No. 9972)
International Labor Organization (Ex. Order No. 9698)
International Maritime Satellite Organization (Ex. Order No. 12238)
International Monetary Fund (Ex. Order No. 9751)
International Pacific Halibut Commission (Ex. Order No. 11059)
International Renewable Energy Agency (Ex. Order No. 13705)
International Secretariat for Volunteer Service (Ex. Order No. 11363)
International Telecommunication Union (Ex. Order No. 9863)
International Telecommunications Satellite Organization (INTELSAT) (Ex. Order No. 11718/11966)
International Union for Conversation of Nature and Natural Resources (Ex. Order No. 12986)
International Wheat Advisory Committee (International Wheat Council) (Ex. Order No. 9823)
Interparliamentary Union (Ex. Order No. 13097)
Israel-United States Binational Industrial Research and Development Foundation (Ex. Order No. 12956)
ITER International Fusion Energy Organization (Ex. Order No. 13451)
Korean Peninsula Energy Development Organization (Ex. Order No. 12997)
Multilateral Investment Guarantee Agency (Ex. Order No. 12647)
Multinational Force and Observers (Ex. Order No. 12359)
North American Development Bank (Ex. Order No. 12904)
North Pacific Anadromous Fish Commission (Ex. Order No. 12895)
North Pacific Marine Science Organization (Ex. Order No. 12894)
Office of the High Representative in Bosnia and Herzegovina (Ex. Order No. 13568)
Organization for European Economic Cooperation (now known as the Organization for Economic Cooperation and Development) (Ex. Order No. 10133)
Organization for the Prohibition of Chemical Weapons (Ex. Order No. 13049)
Organization of American States (includes Pan American Union) (Ex. Order No. 10533)
Organization of Eastern Caribbean States (Ex. Order No. 12669)
Pacific Salmon Commission (Ex. Order No. 12567)
Pan American Health Organization (includes Pan American Sanitary Bureau) (Ex. Order No. 10864)
Preparatory Commission of the International Atomic Energy Agency (Ex. Order No. 10727)
Provisional Intergovernmental Committee for the Movement of Migrants from Europe (now known as the Intergovernmental Committee for European Migration) (Ex. Order No. 10335)
South Pacific Commission (Ex. Order No. 10086)
United International Bureau for the Protection of Intellectual Property (BIRPI) (Ex. Order No. 11484)
United Nations (Ex. Order No. 9698)
United Nations Educational, Scientific, and Cultural Organization (Ex. Order No. 9863)
United Nations Industrial Development Organization (Ex. Order No. 12628)
United States-Mexico Border Health Commission (Ex. Order No. 13367)
Universal Postal Union (Ex. Order No. 10727)
World Health Organization (Ex. Order No. 10025)
World Intellectual Property Organization (Ex. Order No. 11866)
World Meteorological Organization (Ex. Order No. 10676)
World Organisation for Animal Health (Ex. Order No. 13759)
World Tourism Organization (Ex. Order No. 12508)
World Trade Organization (Ex. Order No. 13042)

Province, State and Territory Abbreviations

Exhibit3.21.3-5Province, State and Territory Abbreviations
Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Espirito Santo ES
Goias GO
Maranhao MA
Mato Grosso MT
Mato Grosso do Sul MS
Minas Gerais MG
Para PA
Paraiba PB
Parana PR
Pernambuco PE
Piaui PI
Rio de Janiero RJ
Rio Grande do Norte RN
Rio Grande do Sul RS
Rondonia RO
Roraima RR
Santa Catarina SC
Sao Paulo SP
Sergipe SE
Tocantins TO
Canada Province/Territory Abbreviation
Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador/Newfoundland NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT
Cuba Provincia Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad de La Habana CH
Granma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matanzas MT
Municipio Especial Isla de la Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
Italy Provincia Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Avellino AV
Bari BA
Barletta-Andria-Trani BT
Belluno BL
Benevento BN
Bergamo BG
Biella BI
Bologna BO
Bolzano/Bozen BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanissetta CL
Campobasso CB
Carbonia-Iglesias CI
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CR
Crotone KR
Cuneo CN
Enna EN
Fermo FM
Ferrara FE
Firenze/Florence FI
Foggia FG
Forli-Cesena FO
Frosinone FR
Genova/Genoa GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Lecco LC
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova/Mantua MN
Massa-Carrara MS
Matera MT
Messina ME
Milano/Milan MI
Modena MO
Monza and Brianza MB
Napoli/Naples NA
Novara NO
Nuoro NU
Ogliastra OG
Olbia-Tempio OT
Oristano OR
Padova/Padua PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Ravenna RA
Reggio Calabria RC
Reggio Emilia RE
Rieti RI
Rimini RN
Roma/Rome RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa/Syracuse SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino/Turin TO
Trapani TP
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia/Venice VE
Verbano-Cusio-Ossola VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vicenza VI
Viterbo VT
Mexico State Abbreviation
Aguascalientes AGS
Baja California Norte/Baja California BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana Roo QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Limburg LB
North Brabant/Noord Brabant NB
North Holland/Noord Holland NH
Overijssel OV
South Holland/Zuid Holland ZH
Utrecht UT
Zeeland SLD

U.S. Territory Zip Codes

Exhibit3.21.3-6U.S. Territory Zip Codes

American Samoa (AS)

City ZIP Code
Faga'itua 96799
Leone 96799
Olosega Manua’ 96799
Pago Pago 96799

Federated States of Micronesia (FM)

City ZIP Code
Chuuk 96942
Kosrae 96944
Pohnpei 96941
Yap 96943

Guam (GU)

City ZIP Code
Agana 96910
Inarajan 96917
Merizo 96916
Tamuning 96931
Umatac 96915
Yona 96915

Marshall Islands (MH)

City ZIP Code
Ebeye 96970
Majuro 96960

Northern Mariana Islands (MP)

City ZIP Code
Capitol Hill 96950
Rota 96951
Saipan 96950
Tinian 96952

Palau (PW)

City ZIP Code
Koror 96940
Palau 96940

Puerto Rico (PR)

City ZIP Code
Adjuntas 00601
Aguada 00602
Aguadilla 00603
Aguas Buenas 00703
Aguirre 00704
Aibonito 00705
Anasco 00610
Angeles 00611
Arecibo 00612
Arroyo 00714
Bajadero 00616
Barceloneta 00617
Barranquitas 00794
Bo Obrero 00935
Bayamon 00956
Boqueron 00622
Cabo Rojo 00623
Caguas 00725
Camuy 00627
Canovanas 00729
Caparra Heights 00920 - 00922
Carolina 00979 - 00987
Catano 00962
Cayey 00736
Ceiba 00735
Ciales 00638
Coamo 00769
Comerio 00782
Corozal 00783
Coto Laurel 00780
Culebra 00775
Dorado 00646
Ensenada 00647
Fajardo 00738
Fernandez Juncos 00909 - 00910
Florida 00650
Fort Buchanan 00934
Garrochales 00652
Guanica 00653
Guayama 00784
Guayanilla 00656
Guaynabo 00965 - 00971
Gurabo 00778
Hatillo 00660
Hato Rey STA 00917 - 00919
Humacao 00791
Isabela 00662
Jayuya 00664
Juana Diaz 00795
Juncos 00777
Lajas 00667
La Plata 00786
Lares 00669
Las Marias 00670
Las Piedras 00771
Levittown 00950
Loiza 00772
Loiza ST 00936
Luquillo 00773
Manati 00674
Maricao 00606
Maunabo 00707
Mayaguez 00680
Mercedita 00715
Minillas 00940
Moca 00676
Morovis 00687
Naguabo 00718
Naranjito 00719
Orocovis 00720
Palmer 00721
Patillas 00723
Penuelas 00624
Ponce 00731
Puerta de Tierra 00906
Puerta Real 00740
Punta Santiago 00741
Quebradillas 00678
Rincon 00677
Rio Grande 00745
Rio Blanco 00744
Rio Piedras 00925, 00927, 00928
Rosario 00636
Sabana Grande 00637
Sabana Hoyos 00688
Sabana Seca 00952
Saint Just 00978
Salinas 00751
San Antonio 00690
San German 00683
San Juan 00936
San Lorenzo 00754
San Sebastian 00685
Santa Isabel 00757
Santurce 00907 - 00908
Toa Alta 00953
Toa Baja 00949
Trujillo Alto 00976
Utuado 00641
Vega Alta 00692
Vega Baja (box 1 - 9049) 00694
Vieques 00765
Villalba 00766
Yabucoa 00767
Yauco 00698

Virgin Islands (VI)

City ZIP Code
Charlotte Amalie 00802
Christiansted 00820
Cruz Bay 00830
Downtown 00840
Frederiksted 00840
Kingshill 00850
Saint Croix 00820
Saint John 00830
Saint Thomas 00805
Sunny Isle 00850
Veterans Annex 00820

Country Codes

Exhibit3.21.3-7Country Codes
Foreign Country Country Code
Afghanistan AF
Aland Islands AX
Albania AL
Algeria AG
Andorra AN
Angola AO
Anguilla AV
Antarctic Lands FS
Antarctica AY
Antigua AC
Antigua and Barbuda AC
Argentina AR
Armenia AM
Aruba AA
Ashmore Island AT
Ashmore and Cartier Islands AT
Australia AS
Austria AU
Azerbaijan AJ
Bahamas BF
Bahrain BA
Baker Island FQ
Balearic Islands (Spain) SP
Bangladesh BG
Barbados BB
Barbuda AC
Bassas da India BS
Belarus BO
Belgium BE
Belize BH
Benin BN
Bermuda BD
Bhutan BT
Bolivia BL
Bonaire, Sint Eustatius and Saba BQ
Bosnia-Herzegovina BK
Botswana BC
Bouvet Island BV
Brazil BR
British Indian Ocean Territory IO
British Virgin Islands VI
Brunei BX
Bulgaria BU
Burkina Faso (Upper Volta) UV
Burma/Myanmar BM
Burundi BY
Caicos Islands TK
Cambodia CB
Cameroon CM
Canada CA
Cape Verde/Cabo Verde CV
Cartier Island AT
Cayman Islands CJ
Central African Republic CT
Chad CD
Chile CI
China CH
Christmas Island KT
Clipperton Islands IP
Cocos Island (Keeling Island) CK
Colombia CO
Comoros CN
Congo, Republic of (Brazzaville) CF
Congo, Democratic Republic of (Kinshasa) CG
Cook Islands CW
Coral Sea Islands Territory CR
Costa Rica CS
Cote d'Ivoire (Ivory Coast) IV
Croatia HR
Cuba CU
Curacao (Netherland Antillies) UC
Cyprus CY
Czech Republic EZ
Dem. People's Rep. of Korea (North) KN
Dem. Rep. of Congo (Kinshasa) CG
Denmark DA
Djibouti DJ
Dominica DO
Dominican Republic DR
Dubai AE
East Timor TT
Ecuador EC
Egypt EG
El Salvador ES
Eleuthera Island (Bahamas) BF
England UK
Equatorial Guinea EK
Eritrea ER
Estonia EN
Ethiopia ET
Europa Island EU
Falkland Islands FK
Faroe Islands FO
Fiji FJ
Finland FI
France FR
French Guiana FG
French Polynesia FP
French Southern and Antarctic Lands FS
Futuna WF
Gabon GB
Gambia GA
Gaza Strip GZ
Georgia GG
Germany GM
Ghana GH
Gibraltar GI
Glorioso Islands GO
Great Britain UK
Greece GR
Greenland GL
Grenada GJ
Grenadines VC
Guadeloupe GP
Guam GQ
Guatemala GT
Guernsey GK
Guinea GV
Guinea-Bissau PU
Guyana GY
Haiti HA
Heard Island and McDonald Island HM
Holy See VT
Honduras HO
Hong Kong HK
Howland Island HQ
Hungary HU
Iceland IC
India IN
Indonesia ID
Iran IR
Iraq IZ
Ireland EI
Isle of Man IM
Israel IS
Italy IT
Ivory Coast IV
Jamaica JM
Jan Mayen JN
Japan JA
Jarvis Island DQ
Jersey JE
Johnston Atoll JQ
Jordan JO
Juan de Nova Island JU
Kazakhstan KZ
Kenya KE
Kingman Reef KQ
Kiribati KR
Korea KS
Korea (North) KN
Korea (South) KS
Kosovo KV
Kurile Islands (Russia) RS
Kuwait KU
Kyrgyzstan KG
Laos LA
Latvia LG
Lebanon LE
Lesotho LT
Liberia LI
Libya LY
Liechtenstein LS
Lithuania LH
Luxembourg LU
Macau/Macao MC
Macedonia/North Macedonia MK
Madagascar MA
Malawi MI
Malaysia MY
Maldives MV
Mali ML
Malta MT
Mariana Island CQ
Marshall Islands RM
Martinique MB
Mauritania MR
Mauritius MP
Mayotte MF
McDonald Island HM
Mexico MX
Micronesia FM
Midway Islands MQ
Miquelon SB
Moldova MD
Monaco MN
Mongolia MG
Montenegro MJ
Montserrat MH
Morocco MO
Mozambique MZ
Myanmar/Burma BM
Namibia WA
Nauru NR
Navassa Island BQ
Nepal NP
Netherlands NL
Nevis SC
New Caledonia NC
New Zealand NZ
Nicaragua NU
Niger NG
Nigeria NI
Niue NE
Norfolk Island NF
North Korea KN
North Macedonia/Macedonia MK
Northern Ireland UK
Norway NO
Oman MU
Other (country not identified elsewhere) XX
Pakistan PK
Palmyra Atoll LQ
Panama PM
Papua New Guinea PP
Paracel Islands PF
Paraguay PA
Peru PE
Philippines RP
Pitcairn Islands PC
Poland PL
Portugal PO
Principe TP
Qatar QA
Redonda (British Virgin Islands) VI
Reunion RE
Romania RO
Russia (Russian Federation) RS
Rwanda RW
Ryukyu Islands (Japan) JA
S Georgia Island SX
S Georgia Island and S Sandwich Island SX
S Sandwich Island SX
Samoa WS
San Marino SM
Sao Tome and Principe TP
Sarawak MY
Saudi Arabia SA
Scotland UK
Senegal SG
Serbia RI
Seychelles SE
Sierra Leone SL
Singapore SN
Sint Maarten (Dutch part) (not St. Martin-French part) SD
Slovak Republic (Slovakia) LO
Slovenia SI
Solomon Islands BP
Somalia SO
South Africa SF
South Georgia Island SX
South Georgia Island and South Sandwich Island SX
South Korea KS
South Sandwich Island SX
South Sudan SS
Spain SP
Spratly Islands PG
Sri Lanka CE
(St) Saint Barthelemy TB
St. Helena SH
St. Kitts and Nevis SC
St. Lucia ST
St. Martin (French part) (not Sint Maarten-Dutch part) RN
St. Miquelon SB
St. Pierre SB
St. Pierre and Miquelon SB
St. Vincent and Grenadines VC
Sudan SU
Suriname NS
Svalbard SV
Swaziland WZ
Sweden SW
Switzerland SZ
Syria SY
Taiwan TW
Tajikistan TI
Tanzania TZ
Thailand TH
The Bahamas BF
The Gambia GA
The Netherlands NL
Timor-Leste TT
Togo TO
Tokelau TL
Tonga TN
Tortola VI
Trinidad and Tobago TD
Tromelin Island TE
Tunisia TS
Turkey/Turkiye TU
Turkmenistan TX
Turks and Caicos Islands TK
Tuvalu TV
Uganda UG
Ukraine UP
United Arab Emirates AE
United Kingdom UK
Uruguay UY
Uzbekistan UZ
Vanuatu NH
Vatican City VT
Venezuela VE
Vietnam VM
Wake Island WQ
Wales UK
Wallis and Futuna WF
Windward Island VC
Yemen YM
Zaire CG
Zambia ZA
Zimbabwe ZI
All Other Countries XX

Types of Non-Immigrant Visa Issued to Aliens Admitted to the U.S.

Exhibit3.21.3-8Types of Non-Immigrant VISA
Visa Type Description Residency Status For Income Tax Purposes
A "Diplomatic" Visa Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests, see IRM 3.21.3.3.2.

B "Visitors Visa"
  • B - 1: Business

  • B - 2: Tourism; Medical Treatment

  • Cannot work as employee for United States or foreign employer, but can be independent contractor

Nonresident or Resident Alien based on substantial presence
C In Transit - Must depart from United States within 10-20 days from arrival Nonresident Alien (unless meets substantial presence based on number of days in U.S. during tax year)
D Ship crew members Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2

E
  • E - 1: Treaty Trader

  • E - 2: Treaty Investor

Status depends on length of stay in the U.S. (substantial presence)
F Foreign Student already accepted by college or university for full course of study.

Note:

Generally, unable to accept employment

Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2

G Works for foreign government or International Organization (e.g., United Nations) Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2

H Temporary Worker - Visa petition filed by U.S. employer must be approved Status depends on length of stay in the U.S. (substantial presence)
I Foreign media representative - Journalist Status depends on length of stay in the U.S. (substantial presence)
J Exchange Visitor (USA sponsored) -Foreign Professor or Teacher

Note:

Generally, length of stay in the United States is 2 years

Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2.

K
  • Fiancee of U.S. citizen

  • Marriage must take place within 90 days of arrival in U.S.

  • Nonresident Alien if not going to reside in U.S. with spouse

  • Resident Alien if going to reside permanently in U.S. (substantial presence)

L Intra company transferee Status depends on length of stay in the U.S. (substantial presence)
M Student in vocational or other non-academic school Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2

Q Treated as engaged in trade or business in the United States Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" ; or substantial presence test. For details on tests see IRM 3.21.3.3.2

TN Both NAFTA (effective on or before June 30, 2020) and its successor, the United States-Mexico-Canada Agreement (USMCA) (effective July 1, 2020) allow temporary entry of Canadian and Mexican professionals in qualifying occupations to work. Nonresident Alien

Note:

An alien (not a U.S. citizen) is considered a nonresident alien unless they meet the "green card test" or substantial presence test. For details on tests see IRM 3.21.3.3.2

Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties

Exhibit3.21.3-9Table 1 (irs.gov)

This table lists the income tax rates on income other than personal service income. The income code numbers shown in this table are the same as the income codes on TY23 Form 1042-S. Use this table and the footnote references to verify tax treaty claims. To determine prior year codes, see Exhibit 3.21.3-2.

Table 1. Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties

Income Code 1 6 7 15 10 10 10 11 12
Name Code Interest Paid by U.S. Obligors - General bbb Dividends Paid by U.S. Corporations - General a Dividends Qualifying for Direct Dividend Ratea,b, aaa Pensions and Annuities d Royalties Industrial Equipment Know-How/ Other Industrial Royalties Royalties Patents Royalties Film & TV Royalties Copyrights
Armenia (see Note below) AM 0 n 30 30 30 0 0 0 0 0
Australia AS 10 g,jj,nn 15 mm 5 mm,oo 0 n/a u 5 5 5 5
Austria AU 0 g,jj, ss 15 w 5 w 0 n/au 0 ss 0 ss 10 ss 0 ss
Azerbaijan (see Note below) AJ 0 n 30 30 30 0 0 0 0 0
Bangladesh BG 10 g,bb,jj 15 mm 10 mm 0 f,q n/au 10 10 10 10
Barbados BB 5rr, z 15 w, rr 5 w, rr 0 f n/au,rr 5 rr 5 rr 5 rr 5 rr
Belarus(see Note below) BO 0 n 30 30 30 0 0 0 0 0
Belgium BE 0 g,jj,ss 15 dd,mm 5 dd,mm,oo 0 f n/au 0 ss 0 ss 0 ss 0 ss
Bulgaria BU 5 g,dd,jj,z 10 dd,mm 5 dd,mm 0 f n/au 5 5 5 5
Canada CA 0 g,jj 15 mm 5 mm 15ii 10 0 0 10 0
China, People's Rep. of CH 10z 10 10 0 t 7v 10 10 10 10
Comm. Of Independent States (see Note below)   0 n 30 30 30 0 0 0 0 0
Cyprusbbb CY 10 z 15 5 0 f n/au 0 0 0 0
Czech Republic EZ 0 g 15 w 5 w 0 f 10 10 10 0 0
Denmark DA 0 g,jj 15 dd,mm 5 dd,mm,oo 30 c,t n/au 0 0 0 0
Egypt EG 15z 15 5 0 f n/au 30 u 15 n/a u 15
Estonia EN 10 g,jj,z 15 w 5 w 0 f 5 10 10 10 10
Finland FI 0 g,jj 15 dd,mm 5 dd,mm,oo 0 f n/au 0 0 0 0
France FR 0 g,jj,ss 15 mm 5 mm,oo,ss 30 t n/au 0 ss 0 ss 0 ss 0 ss
Georgia (see Note below) GG 0 n 30 30 30 0 0 0 0 0
Germany GM 0 g,jj 15 dd,mm 5 dd,mm,oo 0 f n/au 0 0 0 0
Greece GR 0 r 30 30 0 0 0 0 30 0
Hungary HU 0 15 5 0 t n/au 0 0 0 0
Iceland IC 0 g,jj,ss 15 dd,mm 5 dd,mm,ss 0 n/a u 5 i,ss 0 ss 5 ss 0 ss
India IN 15 z 25 w 15 w 0 f,ii 10 x 15 x 15 x 15 x 15 x
Indonesia ID 10z 15 10 15 q 10 10 10 10 10
Irelandbbb EI 0 g,jj,ss 15 mm 5 mm,ss 0 f n/a u 0 ss 0 ss 0 ss 0 ss
Israelbbb IS 17 1/1z 25 w 12 1/1w 0 f n/a u 15 u 15 10 10
Italy IT 10 g,h 15 mm 5 mm 0 f,ii 5tt 8 8 8 0
Jamaicabbb JM 12 1/1z 15 10 0 f,p n/a u 10 10 10 10
Japanbbb JA 10 e,g,dd 10 dd,mm 5 dd,mm,oo 0 n/au 0 0 0 0
Kazakhstan KZ 10 g, z 15 ff 5 ff 0 f 10 uu 10 10 10 10
Korea, South KS 12z 15 10 0 f n/a u 15 15 10 10
Kyrgyzstan (see Note below) KG 0 n 30 30 30 0 0 0 0 0
Latvia LG 10 g,jj,z 15 w 5 w 0 f 5 10 10 10 10
Lithuania LH 10 g,z,jj 15 w 5 w 0 f 5 10 10 10 10
Luxembourg LU 0 g,jj 15 w 5 w 0 n/au 0 ss 0 ss 0 ss 0 ss
Malta bbb MT 10 g,jj,ss,z 15 dd,mm 5 dd,mm,ss 0 f n/au 10 ss 10 ss 10 ss 10 ss
Mexico MX 15 g,dd,hh 10 dd,mm 5 dd,mm,oo 0 10 10 10 10 10
Moldova (see Note below) MD 0 n 30 30 30 0 0 0 0 0
Moroccobbb MO 15z 15 10 0 f n/au 10 10 10 10
Netherlands NL 0 m,ss 15 dd,pp, 5 oo,pp 0 f,ii n/au 0 ss 0 ss 0 ss 0 ss
New Zealand NZ 10 g,jj,z 15 mm 5 mm,oo 0 n/au 5 5 5 5
Norway NO 0 s 15 15 0 f n/au 0 0 n/a u 0
Pakistan PK 30 30 15 0 j n/au 0 0 n/a u 0
Philippines RP 15z 25 20 30 q n/au 15 vv 15 vv 15 vv 15 vv
Poland PL 0 15 5 30 n/au 10 10 10 10
Portugal PO 10 g,jj,z 15 w 5 w 0 f 10 10 10 10 10
Romania RO 10z 10 10 0 f n/au 15 15 10 10
Russia RS 0 g 10 ff 5 ff 0 t n/au 0 0 0 0
Slovak Republic LO 0 g 15 w 5 w 0 f 10 10 10 0 0
Slovenia SI 5 g,z,jj 15 mm 5 mm 0 f n/au 5 5 5 5
South Africa SF 0 g,jj 15 w 5 w 15 l n/au 0 0 0 0
Spain SP 10z 15 w 10 w 0 f 8 10 10 8 5 aa
Sri Lanka CE 10 g,jj,z 15 gg 15 gg 0 t 5 y 10 10 10 10
Sweden SW 0 g,jj 15 dd,mm 5 dd,mm,oo 0 n/au 0 0 0 0
Switzerland SZ 0 g,jj 15 w 5 w 0 n/a u 0 0 n/a u 0
Tajikistan (see Note below) TI 0 n 30 30 30 0 0 0 0 0
Thailandbbb TH 15 g,z 15 w 10 w 0 f 8 15 15 5 5
Trinidad & Tobago TD 30z 30 30 0 f n/au 15 15 n/a u 0 cc
Tunisia TS 15z 20 w 14 w 0 f 10xx 15 15 15 15
Turkey TU 15 g,z,jj 20 w 15 w 0 5 10 10 10 10
Turkmenistan (see Note below) TX 0 n 30 30 30 0 0 0 0 0
Ukraine UP 0 g 15 ff 5 ff 0 n/au 10 10 10 10
United Kingdombbb UK 0 g,jj 15 mm 5 mm,oo 0 f,ii n/au 0 0 0 0
Uzbekistan (see Note below) UZ 0 n 30 30 30 0 0 0 0 0
Venezuela VE 10 g,jj,z,ll 15 mm 5 mm 0 t 5 10 10 10 10
Other Countries   30 30 30 30 30 30 30 30 30
 

Note:

Those countries to which the U.S. - U.S.S.R. income tax treaty still applies: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan

Compensation for Personal Services Performed in United States Exempt from U.S. Income Tax Under Income Tax Treaties

Exhibit3.21.3-10Table 2 (irs.gov)

Tax Treaty Table 2. Compensation for Personal Services Performed in United States Exempt from U.S. Income Tax Under Income Tax Treaties is used to verify tax treaty claims exempting personal services compensation. The table lists the different types of personal services income that may be fully or partly exempt from U.S. income tax. The income code numbers in column (2) are for TY23. Use this table and the footnote references to verify tax treaty claims.

Table 2. Compensation for Personal Services Performed in United States Exempt from U.S. Income Tax Under Income Tax Treaties

Country Code1 Purpose22 Maximum Presence in U.S. Required Employer or Payer Maximum Amount of Compensation Treaty Article Citation
Armenia - see C.I.S            
Australia 17 Independent personal services7 183 days Any contractor No limit 14
Australia 18 Dependent personal services17,47,57 183 days Any foreign resident No limit 15
Australia 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.25 17
Australia 20 Studying and training: Remittances or allowance11 No limit Any foreign resident No limit 20
Austria 17 Independent personal services7 No limit Any contractor No limit 14
Austria 18 Dependent personal services17,58 183 days Any foreign resident No limit 15
Austria 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 17
Austria 20 Studying and training: Remittances or allowance11 3 years45 Any foreign resident No limit 20
Azerbaijan - see C.I.S            
Bangladesh 16 Scholarship or fellowship grant4 2 years45 Any U.S. or foreign resident 5 No limit 21(2)
Bangladesh 17 Independent personal services7 183 days Any contractor No limit 15
Bangladesh 18 Dependent personal services17,57 183 days Any foreign resident No limit 16
Bangladesh 42 Public entertainment No limit Any contractor $10,000 p.a.30 18
Bangladesh 19 Teaching or research4 2 years Any U.S. or foreign resident No limit 21(1)
Bangladesh 20 Studying and training:4
Remittances or allowances
2 years45 Any foreign resident No limit 21(2)
Bangladesh 20 Studying and training:4Compensation during study or training 2 years45 Any U.S. or foreign resident $8,000 p.a. 21(2)
Barbados 17 Independent personal services7,8,47 89 days Any foreign contractor No limit 14
Barbados 17 Independent personal services7,8,47 89 days Any U.S. contractor $5,000 p.a. 14
Barbados 18 Dependent personal services8,17,58 183 days Any foreign resident $5,000 p.a. 15
Barbados 42 Public entertainment No limit Any U.S. or foreign resident $250 per day or $4,000 p.a. 6,50 17
Barbados 20 Studying and training:23Remittances or allowances11 No limit Any foreign resident No limit 20
Belarus - see C.I.S            
Belgium 17 Independent personal services12,53       7
Belgium 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 14
Belgium 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 16
Belgium 19 Teaching4 2 years Any U.S. educational or research institution No limit 19(2)
Belgium 20 Studying and training:11Remittances or allowances 2 years45 Any foreign resident No limit 19(1)(a)
Belgium 20 Studying and training:11Compensation during study or training 2 years45 Any U.S. or foreign resident $9,000 p.a. 19(1)(b)
Bulgaria 17 Independent personal services53       7
Bulgaria 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 14
Bulgaria 42 Public entertainment No limit Any U.S. or foreign resident $15,000 p.a.25 16
Bulgaria 19 Teaching4 2 years Any U.S. educational or research institution No limit 19(2)
Bulgaria 20 Studying and training:11 Remittances or allowances 2 years45 Any foreign resident No limit 19(1)(a)
Bulgaria 20 Studying and training:11Compensation during study or training 2 years45 Any U.S. or foreign resident $9,000 p.a. 19(1)(b)
Canada 17 Independent personal services53       VII
Canada 18 Dependent personal services57 No limit Any U.S. or foreign resident $10,000 XV
Canada 18 Dependent personal services57 183 days Any foreign resident17 No limit13 XV
Canada 42 Public entertainment54 No limit Any U.S. or foreign resident $15,000 p.a.25 XVI
Canada 20 Studying and training:11 Remittances or allowances No limit52 Any foreign resident No limit XX
China, People's Rep. of 16 Scholarship or fellowship grant15 No specific limit Any U.S. or foreign resident5 No limit 20(b)
China, People's Rep. of 17 Independent personal services7,8 183 days Any contractor No limit 13
China, People's Rep. of 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 14
China, People's Rep. of 42 Public entertainment29       16
China, People's Rep. of 19 Teaching4 3 years U.S. educational or research institute No limit 19
China, People's Rep. of 20 Studying and training: Remittances or allowances No specific limit Any foreign resident No limit 20(a)
China, People's Rep. of 20 Studying and training: Compensation during training or while gaining experience No specific limit Any U.S. or foreign resident $5,000 p.a. 20(c)
C.I.S (Commonwealth of Independent States)
(See Note below table)
16 Scholarship or fellowship grant 5 years Any U.S. or foreign resident Limited19 VI(1)
C.I.S 17 Independent personal services 183 days Any U.S. or foreign contractor No limit VI(2)
C.I.S 18 Dependent personal services 183 days Any U.S. or foreign resident No limit VI(2)
C.I.S 19 Teaching4,20 2 years Any U.S. educational or scientific institution No limit VI(1)
C.I.S 20 Studying and training: Remittances or allowances 5 years Any U.S. or foreign resident Limited VI(1)
C.I.S 20 Studying and training: Compensation while gaining experience 1 year C.I.S. resident No limit21 VI(1)
C.I.S 20 Studying and training: Compensation under U.S. government program 1 year Any U.S. or foreign resident No limit VI(1)
Cyprus 16 Scholarship or fellowship grant15 Generally, 5 years Any U.S. or foreign resident5 No limit 21(1)
Cyprus 17 Independent personal services7,12 182 days Any contractor No limit 17
Cyprus 18 Dependent personal services17,58 182 days Any foreign resident No limit 18
Cyprus 42 Public entertainment No limit Any U.S. or foreign resident $500 per day or $5,000 p.a.6 19(1)
Cyprus 20 Studying and training: Remittances or allowances Generally, 5 years Any foreign resident No limit 21(1)
Cyprus 20 Studying and training: Compensation during training Generally, 5 years Any U.S. or foreign resident $2,000 p.a. 21(1)
Cyprus 20 Studying and training: Compensation while gaining experience2 1 year Cyprus resident $7,500 21(2)
Cyprus 20 Studying and training: Compensation under U.S. government program 1 year U.S. government or its contractor $10,000 21(3)
Czech Republic 16 Scholarship or fellowship grant4,15 5 years Any U.S. or foreign resident 5 No limit 21(1)
Czech Republic 17 Independent personal services7 183 days Any contractor No limit 14
Czech Republic 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 15
Czech Republic 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 18
Czech Republic 19 Teaching4, 35 2 years Any U.S. educational or research institution No limit 21(5)
Czech Republic 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 21(1)
Czech Republic 20 Studying and training:4
Compensation during training
5 years Any U.S. or foreign resident $5,000 p.a. 21(1)
Czech Republic 20 Studying and training:4,2
Compensation while gaining experience2
12 consecutive months Czech resident $8,000 21(2)
Czech Republic 20 Studying and training:4
Compensation under U.S. government program
1 year U.S. government $10,000 21(3)
Denmark 17 Independent personal services7 No limit Any contractor No limit 14
Denmark 18 Dependent personal services 8,17,58 183 days Any foreign resident No limit 15
Denmark 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 17
Denmark 20 Studying and training:4
Remittances or allowances 11
3 years45 Any foreign resident No limit 20
Egypt 16 Scholarship or fellowship grant15 Generally, 5 years Any U.S. or foreign resident5 No limit 23(1)
Egypt 17 Independent personal services 89 days Any contractor No limit 15
Egypt 18 Dependent personal services16,17,58 89 days Egyptian resident No limit 16
Egypt 42 Public entertainment No limit Any U.S. or foreign resident $400 per day46 17
Egypt 19 Teaching 4, 13 2 years U.S. educational institution No limit 22
Egypt 20 Studying and training:
Remittances or allowances
Generally, 5 years Any foreign resident No limit 23(1)
Egypt 20 Studying and training:
Compensation during training
Generally, 5 years U.S. or any foreign resident $3,000 p.a. 23(1)
Egypt 20 Studying and training:
Compensation while gaining experience2
12 consecutive months Egyptian resident $7,500 23(2)
Egypt 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 23(3)
Estonia 16 Scholarship or fellowship grant4 5 years Any U.S. or foreign resident5 No limit 20(1)
Estonia 17 Independent personal services7 183 days Any contractor No limit 14
Estonia 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 15
Estonia 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 17
Estonia 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 20(1)
Estonia 20 Studying and training:4
Compensation during training
12 consecutive months Estonian resident $8,000 20(2)
Estonia 20 Studying and training:4
Compensation during training
5 years Other foreign or U.S. resident $5,000 p.a. 20(1)
Estonia 20 Studying and training:4
Compensation while gaining experience2
12 consecutive months Estonian resident $8,000 20(2)
Estonia 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 20(3)
Finland 17 Independent personal services7 No limit Any contractor No limit 14
Finland 18 Dependent personal services17,57 183 days Any foreign resident No limit 15
Finland 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 17
Finland 20 Studying and training:
Remittances or allowances11
No limit Any foreign resident No limit 20
France 16 Scholarship or fellowship grant 15 5 years43 Any U.S. or foreign resident 5 No limit 21(1)
France 17 Independent personal services7,12 No limit Any contractor No limit 14
France 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 15
France 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.30 17
France 19 Teaching4, 44 2 years43 U.S. educational or research institution No limit 20
France 20 Studying and training:4
Remittances or allowances
5 years43 Any foreign resident No limit 21(1)
France 20 Studying and training:
Compensation during study or training
12 consecutive months French resident $8,000 21(2)
France 20 Studying and training:
Compensation during study or training
5 years43 Other foreign or U.S. resident $5,000 p.a. 21(1)
France 20 Studying and training:
Compensation while gaining experience2
12 consecutive months French resident $8,000 21(2)
Georgia - see C.I.S            
Germany 16 Scholarship or fellowship grant No limit Any U.S. or foreign resident5 No limit 20(3)
Germany 17 Independent personal services53,12       7
Germany 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 15
Germany 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 17
Germany 19 Teaching4,55 2 years U.S. educational or research institution No limit 20(1)
Germany 20 Studying and training:11
Remittances or allowances
No limit Any foreign resident No limit 20(2)
Germany 20 Studying and training:11
Compensation during study or training
4 years Any U.S. or foreign resident $9,000 p.a. 20(4)
Germany 20 Studying and training:11
Compensation while gaining experience2
1 year Any foreign resident $10,00028 20(5)
Greece 17 Independent personal services 183 days Greek resident contractor No limit X
Greece 17 Independent personal services 183 days Other foreign or U.S. resident contractor $10,000 p.a. X
Greece 18 Dependent personal services 183 days Greek resident No limit X
Greece 18 Dependent personal services 183 days Other foreign or U.S. resident contractor $10,000 p.a. X
Greece 19 Teaching 3 years U.S. educational institution No limit XII
Greece 20 Studying and training: Remittances or allowances No limit Any foreign resident No limit XIII
Hungary 17 Independent personal services7 183 days Any contractor No limit 13
Hungary 18 Dependent personal services17,57 183 days Any foreign resident No limit 14
Hungary 19 Teaching4 2 years U.S. educational institution No limit 17
Hungary 20 Studying and training:23
Remittances or allowances11
No limit Any foreign resident No limit 18(1)
Iceland 16 Scholarship or fellowship grant 5 years Any U.S. or foreign resident5 No limit 19(1)
Iceland 17 Independent personal services53       7
Iceland 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 14
Iceland 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 16
Iceland 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 19(1)
Iceland 20 Studying and training:
Compensation during study or training
5 years Any U.S. or foreign resident $9,000 p.a. 19(1)
Iceland 20 Studying and training:
Compensation while gaining experience
12 consecutive months Any U.S. or foreign resident $9,000 19(2)
Iceland 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $9,000 19(3)
India 17 Independent personal services7,8 89 days Any contractor No limit 15
India 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 16
India 42 Public entertainment No limit Any U.S. or foreign resident $1,500 p.a.26,50 18
India 19 Teaching4 2 years U.S. educational institution No limit 22
India 20 Studying and training: Remittances or allowances Reasonable period Any foreign resident27 No limit 21(1)
Indonesia 16 Scholarship and fellowship grant15 5 years Any U.S. or foreign resident5 No limit 19(1)
Indonesia 17 Independent personal services7 119 days Any contractor No limit 15
Indonesia 18 Dependent personal services17,57 119 days Any foreign resident No limit 16
Indonesia 42 Public entertainment No limit Any U.S. or foreign resident $2,000 p.a.25,50 17
Indonesia 19 Teaching4,44 2 years U.S. educational institution No limit 20
Indonesia 20 Studying and training: Remittances or allowances 5 years Any foreign resident No limit 19(1)
Indonesia 20 Studying and training:
Compensation during training
5 years Any U.S. or foreign resident $2,000 p.a. 19(1)
Indonesia 20 Studying and training:
Compensation while gaining experience
12 consecutive months Any U.S. or foreign resident $7,500 19(2)
Ireland 17 Independent personal services7,12 No limit Any contractor No limit 14
Ireland 18 Dependent personal services17,47,58 183 days Any foreign resident No limit 15
Ireland 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 17
Ireland 20 Studying and training: Remittances or allowances11 1 year45 Any foreign resident No limit 20
Israel 16 Scholarship and fellowship grant 5 years Any U.S. or foreign resident5 No limit 24(1)
Israel 17 Independent personal services 182 days Any contractor No limit 16
Israel 18 Dependent personal services16,17,57 182 days Israeli resident No limit 17
Israel 42 Public entertainment No limit Any U.S. or foreign resident $400 per day37 18
Israel 19 Teaching4,39 2 years U.S. educational institution No limit 23
Israel 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 24(1)
Israel 20 Studying and training:
Compensation during study or training
5 years Any U.S. or foreign resident $3,000 p.a. 24(1)
Israel 20 Studying and training:
Compensation while gaining experience2
12 consecutive months Israeli resident $7,500 24(2)
Israel 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 24(3)
Italy 17 Independent personal services7 No limit Any contractor No limit 14(1)
Italy 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 15(2)
Italy 42 Public entertainment 90 days Any U.S. or foreign resident $20,000 p.a.25 17
Italy 19 Teaching or research4 2 years Any U.S. or foreign resident No limit 20
Italy 20 Studying and training: Remittances or allowances No limit Any foreign resident No limit 21
Jamaica 17 Independent personal services7,12 89 days Any foreign contractor No limit 14
Jamaica 17 Independent personal services17,12 89 days Any U.S. contractor $5,000 p.a. 14
Jamaica 18 Dependent personal services17,57 183 days Any foreign resident $5,000 p.a. 15
Jamaica 42 Public entertainment No limit Any U.S. or foreign resident $400 per day or $5,000 p.a.6 18
Jamaica 19 Teaching or research4,44 2 years U.S. educational institution No limit 22
Jamaica 20 Studying and training:23Remittances or allowances 11 No limit Any foreign resident No limit 21(1)
Jamaica 20 Studying and training:23
Compensation during study
12 consecutive months Jamaican resident $7,500 p.a. 21(2)
Jamaica 20 Studying and training:23
Compensation while gaining experience2
12 consecutive months Jamaican resident $7,500 p.a. 21(2)
Japan 17 Independent personal services8,53       7
Japan 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 14
Japan 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.25 16
Japan 19 Teaching or research4 2 years Any U.S. educational institution No limit 20
Japan 20 Studying and training: Remittances or allowances 1 year 45 Any foreign resident No limit 19
Kazakhstan 16 Scholarship or fellowship grant4,15,41 5 years31 Any U.S. or foreign resident5 No limit 19
Kazakhstan 17 Independent personal services7,8 183 days Any contractor No limit 14
Kazakhstan 18 Dependent personal services17,47,58 183 days Any foreign resident No limit 15
Kazakhstan 20 Studying and training:4 Remittances or allowances 5 years31 Any foreign resident No limit 19
Korea, South 16 Scholarship or fellowship grant15 5 years Any U.S. or foreign resident5 No limit 21(1)
Korea, South 17 Independent personal services7 182 days Any contractor $3,000 p.a. 18
Korea, South 18 Dependent personal services17,57 182 days Korean resident18 $3,000 p.a. 19
Korea, South 19 Teaching4 2 years U.S. educational institution No limit 20
Korea, South 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 21(1)
Korea, South 20 Studying and training:
Compensation during training
5 years Any foreign or U.S. resident $2,000 p.a. 21(1)
Korea, South 20 Studying and training:
Compensation while gaining experience 2
1 year Korean resident $5,000 21(2)
Korea, South 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 21(3)
Kyrgyzstan - see C.I.S            
Latvia 16 Scholarship or fellowship grant4 5 years Any U.S. or foreign resident5 No limit 20(1)
Latvia 17 Independent personal services7,8 183 days Any contractor No limit 14
Latvia 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 15
Latvia 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 17
Latvia 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 20(1)
Latvia 20 Studying and training:4
Compensation during training
12 consecutive months Latvian resident $8,000 20(2)
Latvia 20 Studying and training:4
Compensation during training
5 years Other foreign or U.S. resident $5,000 p.a. 20(1)
Latvia 20 Studying and training:
Compensation while gaining experience 2
12 consecutive months Latvian resident $8,000 20(2)
Latvia 20 Studying and training:
Compensation under U.S. Government program
1 year U.S. government or its contractor $10,000 20(3)
Lithuania 16 Scholarship or fellowship grant 4 5 years Any U.S. or foreign resident 5 No limit 20(1)
Lithuania 17 Independent personal services7 183 days Any contractor No limit 14
Lithuania 18 Dependent personal services 8,17,57 183 days Any foreign resident No limit 15
Lithuania 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 17
Lithuania 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 20(1)
Lithuania 20 Studying and training4 Compensation during training 12 consecutive months Lithuanian resident $8,000 20(2)
Lithuania 20 Studying and training4 Compensation during training 5 years Other foreign or U.S. resident $5,000 p.a. 20(1)
Lithuania 20 Studying and training:
Compensation while gaining experience2
12 consecutive months Lithuanian resident $8,000 20(2)
Lithuania 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 20(3)
Luxembourg 17 Independent personal services7 No limit Any contractor No limit 15
Luxembourg 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 16
Luxembourg 42 Public entertainment No limit Any U.S. or foreign resident $10.000 p.a.25 18
Luxembourg 19 Teaching or research9 2 years Any U.S. or foreign resident No limit 21(2)
Luxembourg 20 Studying and training: Remittances or allowances 11 2 years45 Any U.S. or foreign resident No limit 21(1)
Malta 17 Independent personal services53       7
Malta 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 14
Malta 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.25 16
Malta 20 Studying and training:
Remittances or allowances
1 year45 Any foreign resident No limit 20(1)
Malta 20 Studying and training:
Compensation during study or training
No limit Any U.S. or foreign resident $9,000 p.a. 20(2)
Malta 20 Studying and training:
Compensation while gaining experience
No limit Any U.S. or foreign resident $9,000 p.a. 20
Mexico 17 Independent personal services7,8 182 days Any contractor No limit 14
Mexico 18 Dependent personal services17,47,57 183 days Any foreign resident No limit 15
Mexico 42 Public entertainment No limit Any U.S. or foreign resident $3,000 p.a.30 18
Mexico 20 Studying and training: Remittances or allowances No limit Any foreign resident No limit 21
Moldova - see C.I.S            
Morocco 16 Scholarship or fellowship grant15 5 years Any U.S. or foreign resident5 No limit 18
Morocco 17 Independent personal services7 182 days Any contractor13 $5,000 14
Morocco 18 Dependent personal services17,57 182 days Moroccan resident13,18 No limit 15
Morocco 20 Studying and training:5
Remittances or allowances
5 years Any foreign resident No limit 18
Morocco 20 Studying and training: 5
Compensation during training
5 years Any U.S. or foreign resident $2,000 p.a. 18
Netherlands 16 Scholarship or fellowship grant15,33 3 years Any U.S. or foreign resident5 No limit 22(2)
Netherlands 17 Independent personal services7 No limit Any contractor No limit 15
Netherlands 18 Dependent personal services17,47,58 183 days Any foreign resident No limit 16
Netherlands 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.25 18
Netherlands 19 Teaching4,34 2 years U.S. educational institution No limit 21(1)
Netherlands 20 Studying and training:33
Remittances or allowances
Reasonable period Any foreign resident No limit 22(1)
Netherlands 20 Studying and training:33
Compensation while gaining experience
Reasonable period Any U.S. or foreign resident $2,000 p.a. 22(1)
Netherlands 20 Studying and training:33
Compensation while recipient of scholarship or fellowship grant
Reasonable period Any U.S. or foreign resident $2,000 p.a.36 22(2)
New Zealand 17 Independent personal services53 183 days Any U.S. or foreign resident No limit 14
New Zealand 18 Dependent personal services17,58 183 days Any foreign resident No limit 15
New Zealand 42 Public entertainment No limit Any U.S. or foreign resident $10,00025 17
New Zealand 20 Studying and training: Remittances or allowances11 No limit Any foreign resident No limit 20
Norway 16 Scholarship or fellowship grant15 5 years Any U.S. or foreign resident5 No limit 16(1)
Norway 17 Independent personal services7 182 days Any contractor No limit 13
Norway 18 Dependent personal services17,56,59 182 days Norwegian resident18 No limit 14
Norway 42 Public entertainment 90 days Any contractor $10,000 p.a.28 13
Norway 19 Teaching4 2 years U.S. educational institution No limit 15
Norway 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 16(1)
Norway 20 Studying and training:
Compensation during training
5 years Any U.S. or foreign resident $2,000 p.a. 16(1)
Norway 20 Studying and training: Compensation while gaining experience2 12 consecutive months Norwegian resident $5,000 16(2)
Norway 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,000 16(3)
Pakistan 16 Scholarship or fellowship grant15 No limit Pakistani nonprofit organization No limit XIII(1)
Pakistan 17 Independent personal services16 183 days Pakistani resident contractor No limit XI
Pakistan 18 Dependent personal services16 183 days Pakistani resident No limit XI
Pakistan 19 Teaching 2 years U.S. educational institution No limit XII
Pakistan 20 Studying and training: Remittances or allowances No limit Any foreign resident No limit XIII(1)
Pakistan 20 Studying and training:
Compensation during training
No limit U.S. or any foreign resident $5,000 p.a. XIII(1)
Pakistan 20 Studying and training:Compensation while gaining experience2 1 year Pakistani resident $6,000 XIII(2)
Pakistan 20 Studying and training:
Compensation while under U.S. government program
No limit U.S. government, its contractor, or any foreign resident employer $10,000 XIII(3)
Philippines 16 Scholarship or fellowship grant15 5 years U.S. or any foreign resident5 No limit 22(1)
Philippines 17 Independent personal services7 89 days Any foreign contractor No limit 15
Philippines 17 Independent personal services7 89 days Any U.S. resident $10,000 p.a. 15
Philippines 18 Dependent personal services17,57 89 days Any Philippines resident18 No limit 16
Philippines 42 Public entertainment No limit Any U.S. or foreign resident $100 per day or $3,000 p.a.28,50 17
Philippines 19 Teaching 4,38 2 years U.S. educational institution No limit 21
Philippines 20 Studying and training: Remittances or allowances 5 years Any foreign resident No limit 22(1)
Philippines 20 Studying and training:
Compensation during study
5 years Any U.S. or foreign resident $3,000 p.a. 22(1)
Philippines 20 Studying and training:
Compensation while gaining experience 2
12 consecutive months Philippines resident $7,500 p.a. 22(2)
Philippines 20 Studying and training:
Compensation while under U.S. government program
1 year U.S. government or its contractor $10,000 p.a. 22(3)
Poland 16 Scholarship or fellowship grant15 5 years U.S. or any foreign resident 5 No limit 18(1)
Poland 17 Independent personal services 182 days Any contractor No limit 15
Poland 18 Dependent personal services 17,57 182 days Any foreign resident No limit 16
Poland 19 Teaching 4,41 2 years U.S. educational institution No limit 17
Poland 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 18(1)
Poland 20 Studying and training:
Compensation during study or training
5 years U.S. or any foreign resident $2,000 p.a. 18(1)
Poland 20 Studying and training:
Compensation while gaining experience2
1 year Polish resident $5,000 18(2)
Poland 20 Studying and training:
Compensation while under U.S. government program
1 year U.S. government or its contractor $10,000 18(3)
Portugal 16 Scholarship or fellowship grant15 5 years U.S. or any foreign resident5 No limit 23(1)
Portugal 17 Independent personal services7 182 days Any contractor No limit 15
Portugal 18 Dependent personal services8,17,58 183 days Any foreign resident No limit 16
Portugal 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.30 19
Portugal 19 Teaching4,42 2 years U.S. educational institution No limit 22
Portugal 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 23(1)
Portugal 20 Studying and training:4
Compensation during study or training
12 consecutive months Portuguese resident $8,000 23(2)
Portugal 20 Studying and training:4
Compensation during study or training
5 years Other foreign or U.S. resident $5,000 p.a. 23(1)
Portugal 20 Studying and training:4
Compensation while gaining experience2
12 consecutive months Portuguese resident $8,000 23(2)
Romania 16 Scholarship or fellowship grant15 5 years Any U.S. or foreign resident5 No limit 20(1)
Romania 17 Independent personal services 182 days Any contractor No limit 14
Romania 42 Public entertainment60 90 days Any contractor $3,000 p.a.28 14
Romania 18 Dependent personal services17,57 182 days Romanian resident18 No limit 15
Romania 42 Public entertainment60 89 days Any U.S. or foreign resident $2,999.99 p.a.28 15
Romania 19 Teaching4 2 years U.S. educational institution No limit 19
Romania 20 Studying and training: Remittances or allowances 5 years Any foreign resident No limit 20(1)
Romania 20 Studying and training:
Compensation during training
5 years U.S. or any foreign resident $2,000 p.a. 20(1)
Romania 20 Studying and training:
Compensation while gaining experience2
1 year Romanian resident $5,000. 20(2)
Romania 20 Studying and training:
Compensation while under U.S. government program
1 year U.S. government or its contractor $10,000 20(3)
Russia 16 Scholarship or fellowship grant4,15,41 5 years31 Any U.S. or foreign resident5 No limit 18
Russia 17 Independent personal services 7 183 days Any contractor No limit 13
Russia 18 Dependent personal services8,17,32,58 183 days Any foreign resident No limit 14
Russia 20 Studying and training:4
Remittances or allowances
5 years 31 Any foreign resident No limit 18
Slovak Republic 16 Scholarship or fellowship grant4,15 5 years Any U.S. or foreign resident5 No limit 21(1)
Slovak Republic 17 Independent personal services7 183 days Any contractor No limit 14
Slovak Republic 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 15
Slovak Republic 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a.30 18
Slovak Republic 19 Teaching4,35 2 years Any U.S. educational or research institution No limit 21(5)
Slovak Republic 20 Studying and training:4
Remittances or allowances
5 years Any foreign resident No limit 21(1)
Slovak Republic 20 Studying and training:4 Compensation during training 5 years Any U.S. or any foreign resident $5,000 p.a. 21(1)
Slovak Republic 20 Studying and training:4
Compensation while gaining experience2
12 consecutive months Slovak resident $8,000 21(2)
Slovak Republic 20 Studying and training:4
Compensation while under U.S. government program
1 year U.S. government $10,000 21(3)
Slovenia 16 Scholarship or fellowship grant4 5 years10 Any U.S. or foreign resident5 No limit 20(1)
Slovenia 17 Independent personal services7 No limit Any contractor No limit 14
Slovenia 18 Dependent personal services12,17,58 183 days Any foreign resident No limit 15
Slovenia 42 Public entertainment No limit Any U.S. or foreign resident $15,000 p.a.30 17
Slovenia 19 Teaching or research4 2 years40 Any U.S. or foreign resident No limit 20(3)
Slovenia 20 Studying and training:4
Remittances or allowances
5 years10 Any foreign resident No limit 20(1)
Slovenia 20 Studying and training:4Compensation during training 12 months Slovenian resident $8,000 20(2)
Slovenia 20 Studying and training:4
Compensation during training
5 years10 Other foreign or U.S. resident $5,000 p.a. 20(1)
Slovenia 20 Studying and training:4
Compensation while gaining experience2
12 months Slovenian resident $8,000 20(2)
South Africa 17 Independent personal services 7 183 days Any contractor No limit 14
South Africa 18 Dependent personal services12,17,58 183 days Any foreign resident No limit 15
South Africa 42 Public entertainment No limit Any U.S. or foreign resident $7,500 p.a.30 17
South Africa 20 Studying and training:
Remittances or allowances11
1 year 45 Any foreign resident No limit 20
Spain 16 Scholarship or fellowship grant4,15 5 years Any U.S. or foreign resident5 No limit 22(1)
Spain 17 Independent personal services7 No limit Any contractor No limit 15
Spain 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 16
Spain 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.30 19
Spain 20 Studying and training: 4
Remittances or allowances
5 years Any foreign resident No limit 22(1)
Spain 20 Studying and training:4
Compensation during training
5 years Any U.S. or foreign resident $5,000 p.a. 22(1)
Spain 20 Studying and training:4
Compensation while gaining experience 2
12 consecutive months Spanish resident $8,000 22(2)
Sri Lanka 17 Independent personal services7,12 183 days Any contractor No limit. 15
Sri Lanka 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 16
Sri Lanka 42 Public entertainment No limit Any U.S. or foreign resident $6,000 p.a.30 18
Sri Lanka 20 Studying and training:
Remittances or allowances11
No limit Any foreign resident No limit 21(1)
Sri Lanka 20 Studying and training:
Compensation while gaining experience2
1 year Sri Lankan resident19 $6,000 21(2)
Sweden 17 Independent personal services7 No limit Any contractor No limit. 14
Sweden 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 15
Sweden 42 Public entertainment No limit Any U.S. or foreign resident $6,00025 18
Sweden 20 Studying and training:
Remittances or allowances11
No limit Any foreign resident No limit 21
Switzerland 17 Independent personal services7 No limit Any contractor No limit 14
Switzerland 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 15
Switzerland 42 Public entertainment No limit Any U.S. or foreign resident $10,000 p.a.25 17
Switzerland 20 Studying and training: Remittances or allowances11 No limit Any foreign resident No limit 20
Tajikistan - see C.I.S            
Thailand 16 Scholarship or fellowship grant 5 years Any U.S. or foreign resident5 No limit 22(1)
Thailand 17 Independent personal services7 89 days Any U.S. resident or permanent establishment $10,000 p.a. 15
Thailand 17 Independent personal services7 89 days Any foreign contractor No limit49 15
Thailand 18 Dependent personal services12,17,47,57 183 days Any foreign resident No limit 16
Thailand 42 Public entertainment No limit Any U.S. or foreign resident $100 per day or $3,000 p.a.48 19
Thailand 19 Teaching or research4,38 2 years Any U.S. or foreign resident No limit 23
Thailand 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 22(1)
Thailand 20 Studying and training:
Compensation during training
5 years Any U.S. or foreign resident $3,000 p.a. 22(1)
Thailand 20 Studying and training:
Compensation while gaining experience
12 consecutive months Thai resident2 $7,500 p.a. 22(2)
Thailand 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government $10,000 22(3)
Trinidad and Tobago 16 Scholarship or fellowship grant15 5 years Any U.S. or foreign resident5 No limit 19(1)
Trinidad and Tobago 17 Independent personal services14 183 days Any foreign resident contractor No limit 17
Trinidad and Tobago 17 Independent personal services14 183 days Any U.S. contractor $3,0006 17
Trinidad and Tobago 18 Dependent personal services8,14 183 days Any foreign resident No limit 17
Trinidad and Tobago 18 Dependent personal services8,14 183 days Any U.S. resident $3,0006 17
Trinidad and Tobago 42 Public Entertainment No limit Any U.S. or foreign resident $100/day 17(4)
Trinidad and Tobago 19 Teaching4 2 years U.S. educational institution or U.S. government No limit 18
Trinidad and Tobago 20 Studying and training:
Remittances or allowances
5 years Any foreign resident No limit 19(1)
Trinidad and Tobago 20 Studying and training:
Compensation during study or research
5 years U.S. or any foreign resident $2,000 p.a.6 19(1)
Trinidad and Tobago 20 Studying and training:
Compensation during professional training
5 years U.S. or any foreign resident $5,000 p.a.6 19(1)
Trinidad and Tobago 20 Studying and training:
Compensation while gaining experience
1 year Trinidad-Tobago resident 2 $5,0006 19(2)
Trinidad and Tobago 20 Studying and training:
Compensation under U.S. government program
1 year U.S. government or its contractor $10,0006 19(3)
Tunisia 16 Scholarship and fellowship grant11,15 5 years Any U.S. or foreign resident5 No limit 20
Tunisia 17 Independent personal services7 183 days Any resident contractor $7,500 p.a. 14
Tunisia 18 Dependent personal services8,17,57 183 days Any foreign resident No limit 15
Tunisia 42 Public entertainment No limit Any U.S. or foreign resident $7,500 p.a.25 17
Tunisia 20 Studying and training: 11
Remittances or allowances
5 years Any foreign resident No limit 20
Tunisia 20 Studying and training:11 Compensation during training 5 years Any U.S. or foreign resident $4,000 p.a. 20
Turkey 17 Independent personal services7 183 days Any contractor No limit 14
Turkey 18 Dependent personal services12,17,57 183 days Any foreign resident No limit 15
Turkey 42 Public entertainment No limit Any U.S. or foreign resident $3,000 p.a.48 17
Turkey 19 Teaching or research 2 years Any foreign resident No limit 20(2)
Turkey 20 Studying and training: Remittances or allowances11 No limit Any foreign resident No limit 20(1)
Turkmenistan - see C.I.S            
Ukraine 16 Scholarship or fellowship grant41 5 years 31 Any U.S. or foreign resident 5 No limit 20
Ukraine 17 Independent personal services3,7 No limit Any contractor No limit 14
Ukraine 18 Dependent personal services3,17,47,58 183 days Any foreign resident No limit 15
Ukraine 20 Studying and training: Remittances or allowances 4 5 years31 Any foreign resident No limit 20
United Kingdom 17 Independent personal services53       7
United Kingdom 18 Dependent personal services12,17,58 183 days Any foreign resident No limit 14
United Kingdom 42 Public entertainment No limit Any U.S. or foreign resident $20,000 p.a. 25 16
United Kingdom 19 Teaching or research4 2 years Any U.S. educational institution No limit 20A
United Kingdom 20 Studying and training:
Remittances or allowances11
1 year45 Any foreign resident No limit 20
Uzbekistan - see C.I.S            
Venezuela 16 Scholarship or fellowship grant4 5 years10 Any U.S. or foreign resident 5 No limit 21(1)
Venezuela 17 Independent personal services7,12 No limit Any contractor No limit 14
Venezuela 18 Dependent personal services12,17,58 183 days Any foreign resident No limit 15
Venezuela 42 Public entertainment No limit Any U.S. or foreign resident $6,000 p.a.30 18
Venezuela 19 Teaching4 2 years40 Any U.S. or foreign resident No limit 21(3)
Venezuela 20 Studying and training:4
Remittances or allowances
5 years10 Any foreign resident No limit 21(1)
Venezuela 20 Studying and training:4 Compensation during training 12 months Venezuelan resident $8,000 21(2)
Venezuela 20 Studying and training:4 Compensation during training 5 years10 Other foreign or U.S.resident $5,000 p.a. 21(1)
Venezuela 20 Studying and training:4
Compensation while gaining experience
12 months Venezuelan resident2 $8,000 21(2)
 

Note:

Those countries to which the U.S. - U.S.S.R. income tax treaty still applies: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan

Form 8288-A and Form 13698

Exhibit3.21.3-11Form 8288-A and Form 13698Form8288-A 13698International Credit Verification SlipThis is an Image: 34010111.gif

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Prior Year Treaty table

Exhibit3.21.3-12Prior Year Treaty table

Compensation for Personal Services Performed in United States Exempt from U.S. Income Tax Under Income Tax Treaties

Country Purpose Maximum Presence in the U.S. Required Employer or Payer Maximum Amount of Compensation Treaty Article
Austria
TY 1998 - Prior
Scholarship or Fellowship Grant No Limit Any U.S. or foreign resident No limit XIII(3)
Austria
TY 1998 - Prior
Independent Personal Service 183 days Austrian resident contractor No limit X
Austria
TY 1998 - Prior
Independent Personal Service 183 days Other foreign or U.S. contractor $3,000 X
Austria
TY 1998 - Prior
Dependent Personal Service 183 days Austrian resident No limit X
Austria
TY 1998 - Prior
Dependent Personal Service 183 days Other foreign or U.S. resident $3,000 X
Austria
TY 1998 - Prior
Teaching 2 years U.S. educational institution No limit XII
Austria
TY 1998 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit XIII(1) and (2)
Austria
TY 1998 - Prior
Studying and Training: Compensation while gaining experience 1 year Austrian resident $10,000 XIII(4)
Bangladesh
TY 2006 and prior
N/A N/A N/A N/A N/A
Belgium
TY 2007 - Prior
Scholarship or Fellowship Grant 5 years Any U.S. or foreign resident No limit 21(1)
Belgium
TY 2007 - Prior
Independent personal service 182 days Any contractor No limit 14(2)(a)(b)
Belgium
TY 2007 - Prior
Public Entertainment 90 days Any contractor $3,000 14(2)(c)
Belgium
TY 2007 - Prior
Dependent personal service 182 days Belgium resident No limit 15
Belgium
TY 2007 - Prior
Teaching 2 years U.S. educational institution No limit 20
Belgium
TY 2007 - Prior
Studying and Training: Remittances or allowances 5 years Any foreign resident No limit 21(1)
Belgium
TY 2007 - Prior
Studying and Training: Compensation during training 12 consecutive months Belgium resident $5,000 21(2)(b)
Belgium
TY 2007 - Prior
Studying and Training: Compensation during training 5 years Other foreign or U.S. resident $2,000 p.a. 21(1)
Belgium
TY 2007 - Prior
Studying and Training: Compensation while gaining experience 12 consecutive months Belgium resident $5,000 21(2)(a)
Belgium
TY 2007 - Prior
Studying and Training: Compensation under U.S. Govt Program 1 year U.S. government or its contractor $10,000 21(3)
Bulgaria
TY 2008 - Prior
N/A N/A N/A N/A N/A
Canada
TY 2003 - Prior
Independent personal service No limit Any contractor No limit XIV
Canada
TY 2003 - Prior
Dependent personal service No limit Any U.S. or foreign resident $10,000 XV
Canada
TY 2003 - Prior
Dependent personal service 183 days Any foreign resident No limit XV
Canada
TY 2003 - Prior
Dependent personal service No limit Any foreign resident No limit XX
Canada
TY 2008 - 2004
Independent personal service No limit Any contractor No limit XIV
Canada
TY 2008 - 2004
Public Entertainment No limit Any contractor $15,000 p.a. XVI
Canada
TY 2008 - 2004
Dependent personal service No limit Any U.S. or foreign resident $10,000 XV
Canada
TY 2008 - 2004
Dependent personal service 183 days Any foreign resident No limit XV
Canada
TY 2008 - 2004
Studying and Training: Remittances or allowances No limit Any foreign resident No limit XX
Denmark
TY 2000 - Prior
Independent personal service 180 days Danish resident contractor No limit XI
Denmark
TY 2000 - Prior
Independent personal service 90 days Other foreign or U.S. contractor $3,000 XI
Denmark
TY 2000 - Prior
Dependent personal service 180 days Danish resident No limit XI
Denmark
TY 2000 - Prior
Dependent personal service 90 days Other foreign or U.S. resident $3,000 XI
Denmark
TY 2000 - Prior
Teaching 2 years U.S. educational institution No limit XIV
Denmark
TY 2000 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit XIII
Estonia
TY 1999 - Prior
N/A N/A N/A N/A N/A
Germany
TY 2007 and prior
Scholarship or Fellowship Grant No limit Any U.S. or foreign resident No limit 20(3)
Germany
TY 2007 and prior
Dependent personal service 183 days Any foreign resident No limit 15
Germany
TY 2007 and prior
Public Entertainment No limit Any U.S. or foreign resident $20,000 17
Germany
TY 2007 and prior
Teaching 2 years U.S. educational or research institution No limit 20(1)
Germany
TY 2007 and prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit 20(2)
Germany
TY 2007 and prior
Studying and Training: Compensation during study or training 4 years Any foreign resident $5,000 20(4)
Germany
TY 2007 and prior
Studying and Training: Compensation while gaining experience 1 year Any U.S. or foreign resident $10,000 20(5)
Germany
TY 2008 and prior
Scholarship or fellowship grant No limit Any U.S. or foreign resident No limit 21(1)
Germany
TY 2008 and prior
Independent personal service No limit Any contractor No limit 14
Germany
TY 2008 and prior
Independent personal service: Public entertainment No limit Any contractor $20,000 p.a. 17
Germany
TY 2008 and prior
Dependent personal service 183 days Any foreign resident No limit 15
Germany
TY 2008 and prior
Dependent personal service: Public entertainment 183 days Any foreign resident $20,000 p.a. 17
Germany
TY 2008 and prior
Teaching 2 years U.S. educational or research institution No limit 20(1)
Germany
TY 2008 and prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit 20(2)
Germany
TY 2008 and prior
Studying and Training: Compensation during study or training 4 years Any U.S. or foreign resident $5,000 p.a. 20(4)
Germany
TY 2008 and prior
Studying and Training: Compensation while gaining experience 1 year Any German enterprise or foreign organization or institution $10,000 20(5)
Iceland
TY 2008 - Prior
N/A N/A N/A N/A N/A
Ireland
TY1998 - Prior
Independent personal service 183 days Irish resident contractor No limit XI
Ireland
TY1998 - Prior
Dependent personal service 183 days Irish resident No limit XI
Ireland
TY1998 - Prior
Teaching 2 years U.S. educational institution No limit XVIII
Ireland
TY1998 - Prior
Studying and Training: Remittances or allowances No limit Irish resident No limit XIX
Italy
TY 2010 - Prior
Independent personal service 183 days Any contractor No limit 14
Italy
TY 2010 - Prior
Independent personal service: public entertainment 90 days Any contractor $12,000 p.a. 17(1)
Italy
TY 2010 - Prior
Dependent personal service 183 days Any foreign resident No limit 15
Italy
TY 2010 - Prior
Independent personal service: public entertainment 90 days Any U.S. or foreign resident $12,000 p.a. 17(1)
Italy
TY 2010 - Prior
Teaching 2 years U.S. educational institution No limit 20
Italy
TY 2010 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit 21
Japan
TY 2003 - Prior
Scholarship or Fellowship Grant 5 years Any U.S. or foreign resident No limit 20(1)
Japan
TY 2003 - Prior
Independent personal service 183 days Any contractor No limit 17
Japan
TY 2003 - Prior
Public Entertainment 90 days Any contractor $3,000 17
Japan
TY 2003 - Prior
Dependent personal service 183 days Japanese resident No limit 18
Japan
TY 2003 - Prior
Teaching 2 years U.S. educational institution No limit 19
Japan
TY 2003 - Prior
Studying and Training: Remittances or allowances 5 years Any foreign resident No limit 20(1)
Japan
TY 2003 - Prior
Studying and Training: Compensation during training 5 years U.S. or any foreign resident $2,000 20(1)
Japan
TY 2003 - Prior
Studying and Training: Compensation while gaining experience 12 consecutive months Japanese resident $5,000 20(2)
Japan
TY 2003 - Prior
Studying and Training: Compensation under U.S. government program 1 year U.S. government or its contractor $10,000 20(3)
Latvia
TY 1999 - Prior
N/A N/A N/A N/A N/A
Lithuania
TY 1999 - Prior
N/A N/A N/A N/A N/A
Luxembourg
TY 2003 - Prior
Scholarship or Fellowship Grant No limit Any foreign resident No limit XIV(1)
Luxembourg
TY 2003 - Prior
Independent personal service 180 days Luxembourg resident No limit XII
Luxembourg
TY 2003 - Prior
Independent personal service 180 days Any U.S. or foreign resident $3,000 XII
Luxembourg
TY 2003 - Prior
Dependent personal service 180 days Luxembourg resident No limit XII
Luxembourg
TY 2003 - Prior
Dependent personal service 180 days Any U.S. or foreign resident $3,000 XII
Luxembourg
TY 2003 - Prior
Teaching 2 years U.S. educational institution No limit XIII
Luxembourg
TY 2003 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit XIV(1)
Luxembourg
TY 2003 - Prior
Studying and Training: Compensation during training 1 year Any foreign resident No limit XIV(1)
Luxembourg
TY 2003 - Prior
Studying and Training: Compensation while gaining experience 1 year Any foreign resident $5,000 XIV(2)
Luxembourg
TY 2003 - Prior
Studying and Training: Compensation under U.S. government program 1 year U.S. government, its contractor, or a foreign resident $10,000 XIV(3)
Malta
TY 2010 - Prior
N/A N/A N/A N/A N/A
New Zealand
TY 2010 - Prior
Independent personal service 183 days Any contractor No limit 14
New Zealand
TY 2010 - Prior
Independent personal service: Public entertainment 183 days Any contractor $10,000 17
New Zealand
TY 2010 - Prior
Dependent personal service 183 days Any foreign resident No limit 15
New Zealand
TY 2010 - Prior
Dependent personal service: Public entertainment 183 days Any foreign resident $10,000 17
New Zealand
TY 2010 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit 20
Slovenia
TY 2003 - Prior
N/A N/A N/A N/A N/A
South Africa
TY 1998 - Prior
N/A N/A N/A N/A N/A
Sri Lanka
TY 2006 - Prior
N/A N/A N/A N/A N/A
Switzerland
TY 1998 - Prior
Independent personal service 183 days Swiss resident contractor No limit X
Switzerland
TY 1998 - Prior
Independent personal service 183 days Other foreign or U.S. contractor $10,000 X
Switzerland
TY 1998 - Prior
Dependent personal service 183 days Swiss resident No limit X
Switzerland
TY 1998 - Prior
Dependent personal service 183 days Other foreign or U.S. contractor $10,000 X
Switzerland
TY 1998 - Prior
Teaching 2 years U.S. educational institution No limit XII
Switzerland
TY 1998 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit XIII
Thailand
TY 1998 - Prior
N/A N/A N/A N/A N/A
Turkey
TY 1998 - Prior
N/A N/A N/A N/A N/A
Ukraine
TY 2000 - Prior
N/A N/A N/A N/A N/A
United Kingdom
TY 2003 - Prior
Independent personal service 183 days Any contractor No limit 14
United Kingdom
TY 2003 - Prior
Dependent personal service 183 days Any foreign resident No limit 15
United Kingdom
TY 2003 - Prior
Teaching 2 years U.S. education institution No limit 20
United Kingdom
TY 2003 - Prior
Studying and Training: Remittances or allowances No limit Any foreign resident No limit 21
Venezuela
TY 1999 - Prior
N/A N/A N/A N/A N/A

Examples of Resident Alien Cards (Green Cards) and Visas

Exhibit3.21.3-13Resident Alien CardsThis is an Image: 34010131.gif

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This is an Image: 34010132.gif

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Exempt Countries for Government Service Employees

Exhibit3.21.3-14Exempt Countries for Government Service Employees
Mission Article Government salary exempt from US tax?
Armenia (USSR) VI(1)(a) Yes, if citizen of paying state
Australia 19 Yes, if citizen of paying state
Austria 19 Yes, if citizen of paying state
Azerbaijan (USSR) VI(1)(a) Yes, if citizen of paying state
Bangladesh 20 Yes
Barbados 19 Yes, if citizen of paying state
Belarus (USSR) VI(1)(a) Yes, if citizen of paying state
Belgium 18 Yes
Bulgaria 18 Yes
Canada XIX Yes, if citizen of paying state
China 18 Yes
Cyprus 22 Yes, if citizen of paying state
Czech Republic 20 Yes, if citizen of paying state
Denmark 19 Yes
Egypt 21 Yes, if citizen of paying state
Estonia 19 Yes
Finland 19 Yes
France 19 Yes
Georgia (USSR) VI(1)(a) Yes, if citizen of paying state
Germany 19 Yes
Greece XI Yes
Hungary 16 Yes
Iceland 18 Yes
India 19 Yes
Indonesia 18 Yes
Ireland 19 Yes
Israel 22 Yes, if citizen of paying state
Italy 19 Yes
Jamaica 20 Yes
Japan 18 Yes
Kazakhstan 17 Yes
Korea 22 Yes, if citizen of paying state
Kyrgyzstan (USSR) VI(1)(a) Yes, if citizen of paying state
Latvia 19 Yes
Lithuania 19 Yes
Luxembourg 20 Yes
Malta 19 Yes
Mexico 20 Yes
Moldova (USSR) VI(1)(a) Yes, if citizen of paying state
Morocco 17 Yes, if citizen of paying state
Netherlands 20 Yes
New Zealand 19 Yes
Norway 17 Yes, if citizen of paying state
Pakistan IX Yes, if citizen of paying state
Philippines 20 Yes, if citizen of paying state
Poland 19 Yes, if citizen of paying state
Portugal 21 Yes
Romania 18 Yes, if citizen of paying state
Russia (Russian Federation) 16 Yes
Slovak Republic (Slovakia) 20 Yes, if citizen of paying state
Slovenia 19 Yes
South Africa 19 Yes
Spain 21 Yes
Sri Lanka 20 Yes, if citizen of paying state
Sweden 20 Yes,
Switzerland 19 Yes,
Tajikistan (USSR) VI(1)(a) Yes, if citizen of paying state
Thailand 21 Yes
Trinidad and Tobago 20 Yes, if citizen of paying state
Tunisia 19 Yes, if citizen of paying state
Turkey 19 Yes
Turkmenistan (USSR) VI(1)(a) Yes, if citizen of paying state
Ukraine 18 Yes
United Kingdom 19 Yes
Uzbekistan (USSR) VI(1)(a) Yes, if citizen of paying state
Venezuela 20 Yes

Correspondence Action Sheet Instructions Form 13900

Exhibit3.21.3-15Correspondence Action SheetForm13900This is an Image: 34010151.gif

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This is an Image: 34010152.gif

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This is an Image: 34010153.gif

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Correspondence Action Sheet Instructions Form 13975

Exhibit3.21.3-16Correspondence Action SheetForm13975This is an Image: 34010161.gif

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This is an Image: 34010162.gif

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Copy of Receipt from Casinos in Lieu of Form 1042-S

Exhibit3.21.3-17Copy of Receipt from Casinos in lieu of Form 1042-SThis is an Image: 34010171.gif

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Letter 4087C Fill-in Paragraphs

Exhibit3.21.3-18Letter 4087C Fill-in Paragraphs
Letter 4087C – International Return Incomplete for Processing Literal
A - Form 1128 required for accounting period change The tax return you submitted indicates you are changing your accounting period. Send us Form 1128, Application to Adopt, Change, or Retain a Tax Year, a copy of your application, or a statement relating to an application to change your accounting period. We are unable to process your return as submitted without this documentation or IRS authority.
B - IRC 965 Transition Tax Statement (Form 1040 Only) Internal Revenue Code (IRC) Section 965 Transition Tax Statement was either not attached or was incomplete. Send us a completed, signed IRC Section 965 Transition Tax Statement to support the Section 965 claims on your tax return.
C - Disaster return with unsupported itemized deductions Schedule A is incomplete or missing from your return. Complete the schedule with information that supports your entry for itemized deductions. If applicable, you must also submit any supporting forms for Schedule A, such as Form 4684.
D - EC 355, Employer and employee addresses in Puerto Rico (MeF) Send us your Forms W-2, Wage and Tax Statement, used to support the amount of federal withholding on your tax return.
K - Second Correspondence Thank you for sending us the information we requested on your tax return for the period shown on page 1 of this letter. We still need more information to process your return. Please send us the information we’ve requested in this letter.

Letter 2894SP and Letter 2894C Fill-in Paragraphs

Exhibit3.21.3-19Letter 2984SP and Letter 2894C Fill-in Paragraphs
Letter 2894SP (Form 1040-PR) – Returns Incomplete for Processing – Form 1040-PR

Note:

Note: For English translation see Letter 2894C below.

Literal
PD - Form 8959, Line 1 support of Medicare tax withheld Envienos los Formularios W-2AS, W-2CM, W-2GU, W-2VI, y 499R-2/W-2PR que documentan su anotación en la linea 1 del Formulario 8959.
PM - EC 094 - Married Filing Separately Su planilla indicó el estado civil casado que radica por separado. Sin embargo, esta incluye ingreso que pertenence a su cónyuge. Envíenos la planilla contributiva corregida con solo su ingreso. Si desea radicar conjuntamente, ambos cónyuges tienen que firmar.
Letter 2894C (Form 1040-SS) – Returns Incomplete for Processing – Form 1040-SS Literal
PJ - Form 8959, Line 1 support of Medicare tax withheld Send us Forms W-2AS, W-2CM, W-2GU, W-2VI, and 499R-2/W-2PR that document your amount for Medicare wages and tips on line 1 of Form 8959.
PL - EC 094 - Married Filing Separately Your return indicates a married filing separately filing status. However, it includes income belonging to your spouse. Submit a corrected tax return with only your income. If you wish to file jointly, both spouses must sign a joint return.

Glossary

Exhibit3.21.3-20Glossary
Term Definition
Alien Any person who is not a U.S. citizen or U.S. National. For Income tax purposes, aliens are classified as Residents or Nonresidents.
Bona Fide Residence A residence established in a foreign country or countries for an uninterrupted period which includes an entire year and part of the tax year of the return.
Competent Authority The Commissioner, LB&I is the U.S. Competent Authority charged with administering the provisions of tax treaties, interpreting and applying the treaties, and reaching mutual agreement in specific cases. The U.S. competent authority conducts the competent authority process through two offices, Advance Pricing and Mutual Agreement Program (APMA) and the Treaty Assistance and Interpretation Team (TAIT).
Domicile A fixed or permanent place of living for an indefinite length of time. A domicile can be different from the taxpayer's residence.
Dual Status Aliens who are both Residents and Nonresidents of the U.S. within the same tax year.
Economic Impact Payment (EIP) Advance Recovery Rebate Credit payments.
Effectively Connected Income Any compensation received for personal services in the U.S. Any earned income derived from an office or fixed place of business in the U.S. Generally applies to nonresidents.
Excludable Income Any income that can be omitted from taxable income such as Form 2555/2555-EZ (TY 2018 and prior) exclusions, Form 4563 exclusions and exclusions due to tax treaty conventions and IRC exclusions.
Foreign Tax Treaties Country-specific tax treaties designed to avoid international double taxation and to prevent tax evasion.
Fulbright Grant A grant under the Mutual Educational and Cultural Exchange Act of 1961. It can be received for teaching and research duties, or by students.
Green Card Test A taxpayer is a lawful permanent resident of the U.S. at any time during the calendar year if that person has been issued an alien registration card, also known as a green card.
IRC 911 Section of the Internal Revenue Code that allows U.S. citizens and resident aliens to claim an exclusion for certain income earned outside the U.S. and certain housing costs. Taxpayers use Form 2555 to claim this exclusion.
IRC 931 Section of the Internal Revenue Code that allows bona fide residents of American Samoa to exclude income using Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa.
IRC 933 Section of the Internal Revenue Code that allows U.S. citizens who are bona fide residents of Puerto Rico to exclude income from Puerto Rico sources.
Nonresident Alien An alien who is temporarily residing in the U.S., a resident alien who has abandoned permanent residence in the U.S. or an alien who has never been in the U.S.
Non-Effectively Connected Income Nonresident aliens' income received from sources within the U.S. which are not connected with a U.S. trade or business.
Physical Presence Test A rule applied in determining if a taxpayer qualifies for the Foreign Earned Income Exclusion. Generally, the taxpayer must be physically present in a foreign country for a minimum of 330 days during a consecutive 12-month period that includes part of the tax year of the return.
Principal Residence Usually the home in which a taxpayer resides for the majority of the tax year.
Recovery Rebate Credit (RRC) TY20 and TY21 refundable credit available to certain taxpayers to assist with economic recovery. All or part of this credit may have been issued in advance as an Economic Impact Payment (EIP).
Resident Alien Aliens admitted to the U.S. under permanent immigration visas are generally resident aliens and meet the substantial presence test or lawful permanent residency test (green card test).
Substantial Presence Test A rule applied in determining if an alien is a U.S. Resident for tax purposes. Generally, an individual meets the substantial presence test if the individual was in the United States for at least 31 days during the current calendar year and was present in the United States for at least 183 days during the current year and the two preceding calendar years (when multiplied by the applicable multiplier provided in Section 7701(b)(3)(A)).

Note:

For purposes of the substantial presence test, an individual does not count days of temporary presence in the United States under certain visas.

Tax Home A taxpayer's principal place of business, employment, station or post of duty, regardless of where the taxpayer maintains his or her residence.
Treaty Trader Nonresident Alien who has entered the U.S. on an "E-1" visa.
U.S. National An individual who, although not a U.S. citizen, owes his or her allegiance to the United States. For tax purposes, U.S. national refers to American Samoans and Northern Mariana Islanders who chose to become U.S. nationals instead of U.S. citizens.
Visa An endorsement written or stamped on a passport granting entry into a country.
Withholding Agent Any person (e.g., individual trust, partnership, estate, corporation, government agency, non-profit organization or private organization), whether foreign or domestic, required to withhold income tax on U.S. source income received by a nonresident alien, foreign partnership corporation, and various other organizations. A withholding agent is responsible for submitting the withholding information on Form 1042 and providing the income recipient information on Form 1042-S.
Worldwide Income Money that is paid to U.S. citizens or resident aliens as wages, independent contractor payments or unearned income from pensions, rents, royalties and investments may all be subject to tax by the IRS. There are some exceptions for U.S. taxpayers who live abroad.