The U.S.-Canada tax treaty contains no specific benefits for either students or visiting
scholars who are residents of Canada . The treaty does, however, contain several general
provisions that will apply to some students and scholars from Canada and which a few
may find beneficial.
1) Article XV of the U.S.-Canada tax treaty applies to Canadian residents who had
less than $10,000 of earned income in the U.S. in the calendar year.
This article provides that: 2. ...remuneration derived by a [Canadian resident] in
respect of employment exercised in a calendar year in [the United States ] shall be
taxable only in [ Canada ] if:
(a) Such remuneration does not exceed ten thousand dollars ($10,000) in the currency
of [the United States ]...
Thus if you had less than $10,000 in earned income from U.S. sources in a calendar
year, you may exclude this income from federal income tax in the U.S. by claiming
Article XV of the U.S.-Canada tax treaty when you file Form 1040NR-EZ, or Form 1040NR.
To claim this provision of the U.S.-Canada tax treaty on Form 1040NR-EZ, write "0"
on page 1, Line 3
Write the amount of your earned income for the year (which must be less than $10,000, of course ) on page 1, Line 6, "Total wages and scholarships exempt by a treaty from page 2,
On page 2, Item J, indicate both the dollar amount from line 6 on page one, and also
write "earned income less than $10,000, Article XV, US - Canada Tax Treaty"
To claim this provision of the U.S.-Canada tax treaty on Form 1040NR, write "0" on
page 1, Line 8. Write the amount of your earned income for the year (which must be
less than $10,000, of course) on page 1, Line 22, "Total income exempt by a treaty
from page 5, Item M."
On page 5, Item M, claim the tax treaty for " Canada ," and write the amount of your
earned income (i.e. the same amount you wrote on page 1, Line 22). After the amount
write "earned income less than $10,000, Article XV."
2) The U.S.-Canada tax treaty allows you to deduct from your gross income contributions
that you made to Canadian as well as to U.S. charities. Include any such contributions
as itemized deductions on page 3 of Form 1040NR. (If you wish to claim deductions
for charitable contributions you must use Form 1040NR; you may not use Form 1040NR-EZ
for this purpose..