US Internal Revenue Service: i1040nr--1995

8/14/2019 US Internal Revenue Service: i1040nr--1995

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Department of the TreasuryInternal Revenue Service

Instructions for Form 1040NRU.S. Nonresident Alien Income Tax Return

Section references are to the Internal Revenue Code, unless otherwise noted.

Paperwork Reduction Act Notice. We

ask for the information on this form tocarry out the Internal Revenue laws of theUnited States. You are required to giveus the information. We need it to ensurethat you are complying with these lawsand to allow us to figure and collect theright amount of tax.

The time needed to complete and filethis form will vary depending on individualcircumstances. The estimated averagetime is: Recordkeeping, 6 hr., 40 min.;Learning about the law or the form, 1hr., 56 min.; Preparing the form, 4 hr.,19 min.; and Copying, assembling, andsending the form to the IRS, 1 hr., 47min.

If you have comments concerning theaccuracy of these time estimates orsuggestions for making this form simpler,we would be happy to hear from you. Youcan write to the Tax Forms Committee,Western Area Distribution Center, RanchoCordova, CA 95743-0001. Or, you cancall the IRS with your suggestions at1-800-829-9043 and leave a recordedmessage 24 hours a day, 7 days a week.DO NOT send your return to this address.Instead, see Where To File on page 2.

General Instructions

Changes To NoteNew Form 1040NR-EZ. You may beable to use Form 1040NR-EZ, U.S.Income Tax Return for CertainNonresident Aliens With No Dependents,if your only income from U.S. sources iswages, salaries, tips, taxable refunds ofstate and local income taxes, andscholarship or fellowship grants. Also, ifmarried, you cannot claim an exemptionfor your spouse. For more details, getForm 1040NR-EZ and its instructions.Social Security Numbers (SSNs) forDependents. You must enter the SSNof each dependent, except for a child bornin November or December 1995. If you

don't enter a correct SSN, your refund willbe delayed. If your dependent does nothave an SSN, see the instructions for line7c, column (2), on page 6.Earned Income Credit. If you were anonresident alien for any part of 1995, youcannot claim this credit unless you aremarried to a U.S. citizen or resident alienand elect to be taxed as a resident alienfor all of 1995. For details on the election,see page 2.

Direct Deposit of Refund. If you have

a refund on line 63 of your 1995 Form1040NR, you may be able to have itdirectly deposited into your bank accountinstead of receiving a check. Use newForm 8888, Direct Deposit of Refund, todo so. See the instructions for line 63 onpage 14 for details.Household Employment Taxes.Employment taxes on wages paid tohousehold employees are now reportedon Form 1040NR, line 51, using newSchedule H (Form 1040). If you paidsomeone to work in or around your home,you may owe employment taxes. See theinstructions for line 51 on page 13.

If you paid these taxes in 1994, youshould receive a separate package inJanuary containing Schedule H, FormW-2, and other items.Self-Employed Health InsuranceDeduction. This deduction, whichexpired December 31, 1993, has beenretroactively extended and madepermanent. If you were entitled to claimthis deduction in 1994 but did not do so,file Form 1040X, Amended U.S.Individual Income Tax Return, to amendyour 1994 return. Do not use theworksheet in this booklet to figure yourdeduction for 1994. Instead, use theworksheet in the 1994 Form 1040NRinstructions or get Pub. 535, Business

Expenses.Also, the maximum amount of the

deduction has increased for 1995. Seethe instructions for line 26 on page 10.Payment of Deferred Additional 1993Taxes. If you filed Form 8841, Deferralof Additional 1993 Taxes, with your 1993return, your last installment is due oneither April 15, 1996, or June 17, 1996,depending on your filing requirement (seeWhen To File on page 2). See theinstructions for line 63 on page 14.Social Security Benefits. Eighty-fivepercent of your U.S. social securitybenefits are taxable unless exempted bya tax treaty.Tax Law Changes. For more details,get Pub. 553, Highlights of 1995 TaxChanges.

Items To NoteOther Reporting Requirements. If youmeet the closer connection to a foreigncountry exception to the substantialpresence test or exclude days ofpresence in the United States forpurposes of that test, you must file astatement containing certain information.This rule does not apply to foreign

government-related individuals who

exclude days of presence in the UnitedStates. For details, get Form 8840, CloserConnection Exception Statement forAliens, or Form 8843, Statement forExempt Individuals and Individuals Witha Medical Condition. Certain dual residenttaxpayers who claim tax treaty benefitsmust file Form 8833, Treaty-BasedReturn Position Disclosure Under Section6114 or 7701(b), or a similar statement.A dual resident taxpayer is one who is aresident of both the United States andanother country under each country's taxlaws.United StatesIndia Income TaxTreaty. Residents of India who were

students or business apprentices presentin the United States for educational ortraining purposes may be able to take thestandard deduction and exemptions fortheir spouse and dependents under thistreaty. For details, get Pub. 519, U.S.Tax Guide for Aliens.

Additional InformationIf you need more information, our freepublications may help you. Pub. 519 willbe the most important, but the followingpublications may also help.Pub. 525, Taxable and NontaxableIncome

Pub. 529, Miscellaneous DeductionsPub. 552, Recordkeeping for IndividualsPub. 597, Information on the UnitedStatesCanada Income Tax TreatyPub. 901, U.S. Tax TreatiesPub. 910, Guide to Free Tax Services(includes a list of all publications)

These free publications and the formsand schedules you will need are availableon request from the Internal RevenueService. If you have a foreign address,send your order to either: Eastern AreaDistribution Center, P.O. Box 25866,Richmond, VA 23286-8107, U.S.A.; orWestern Area Distribution Center, RanchoCordova, CA 95743-0001, U.S.A.,whichever is closer.

Resident Alien orNonresident AlienIf you are not a citizen of the UnitedStates, specific rules apply to determineif you are a resident alien or a nonresidentalien. Generally, you are considered aresident alien if you meet either the greencard test or the substantial presencetest for 1995. If you do not meet eitherof these tests for 1995 but you meet thesubstantial presence test for 1996, you

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may be able to choose to be treated as aresident alien for part of 1995. But youmust have been physically present in theUnited States for at least 31 days in a rowduring 1995 to do so. This choice doesnot apply if you met either the green cardtest or the substantial presence test for1994. For more details, see Pub. 519.

You are considered a nonresident alienfor the year if you are not a U.S. residentunder either of these tests. You are alsoconsidered a nonresident alien if you

otherwise meet the substantial presencetest but you come under any of the threeexceptions described below.

For more details on resident andnonresident status, the tests for residenceand the exceptions to them, see Pub. 519.Green Card Test. You are a residentfor tax purposes if you were a lawfulpermanent resident (immigrant) of theUnited States at any time during 1995.Substantial Presence Test. You areconsidered a U.S. resident if you meet thesubstantial presence test for 1995. Youmeet this test if you were physicallypresent in the United States for at least:

1. 31 days during 1995, and2. 183 days during the period 1995,1994, and 1993, counting all the days ofphysical presence in 1995 but only 1/3 thenumber of days of presence in 1994 andonly 1/6 the number of days in 1993.

Generally, you are treated as presentin the United States on any day that youare physically present in the country atany time during the day.Exceptions. The following areexceptions to the substantial presencetest.1. Exempt individual. You do notcount days for which you are an exemptindividual. In general, an exempt

individual is an individual who is a:a. foreign government-relatedindividual,b. teacher or trainee,c. student, ord. professional athlete who istemporarily in the United States tocompete in a charitable sports event.Note: Alien individuals with Q visas aretreated as either students or teachers andtrainees and, as such, are exemptindividuals for purposes of the substantialpresence test if they otherwise qualify.However, Q visa holders may onlyexclude days of presence after

September 30, 1994. Q visas are issuedto aliens participating in certaininternational cultural exchange programs.2. Medical condition. You do notcount any day that you intended to leavethe United States but were unable toleave because of a medical condition ormedical problem that arose while youwere present in the United States.Note: This exception does not apply topre-existing medical conditions orproblems. For more details, see Pub. 519.

3. Closer connection to foreigncountry. Even though you wouldotherwise meet the substantial presencetest, you are not treated as having metthat test for 1995 if you:a. were present in the United States forfewer than 183 days during 1995,b. establish that during 1995 you hada tax home in a foreign country, andc. establish that during 1995 you hada closer connection to one foreign countryin which you had a tax home than to the

United States unless you had a closerconnection to two foreign countries.

Who Must FileFile Form 1040NR if any of the followingfour conditions applies to you.1. You were a nonresident alienengaged, or considered to be engaged, ina trade or business in the United Statesduring 1995. You must file even ifa. none of your income came from atrade or business conducted in the UnitedStates,b. you have no income from U.S.sources, or

c. your income is exempt from U.S. tax.In any of the above three cases, do not

complete the schedules for Form1040NR. Instead, attach a list of the kindsof exclusions you claim and the amountof each.Note: If you were a nonresident alienstudent, teacher, or trainee who wastemporarily present in the United Statesunder an F, J, M, or Q visa, you areconsidered engaged in a trade orbusiness in the United States and youmust file Form 1040NR (or Form1040NR-EZ).2. You were a nonresident alien not

engaged in a trade or business in theUnited States during 1995 and not all U.S.tax that you owe was withheld from yourincome.3. You represent a deceased personwho would have had to file Form 1040NR.4. You represent an estate or trust thatwould have had to file Form 1040NR.Exception for Children Under Age14. If your child was under age 14 onJanuary 1, 1996, had income only frominterest and dividends that are effectivelyconnected with a U.S. trade or business,and that income totaled less than $5,000,you may be able to elect to report yourchild's income on your return. But you

must use Form 8814, Parents' ElectionTo Report Child's Interest and Dividends,to do so. If you make this election, yourchild does not have to file a return. Formore details, see Form 8814.Filing a Deceased Person's Return.The personal representative must file thereturn for a deceased person who wasrequired to file a return for 1995. Apersonal representative can be anexecutor, administrator, or anyone who isin charge of the deceased person'sproperty.

Filing for an Estate or Trust. If youare filing Form 1040NR for a nonresidentalien estate or trust, change the form toreflect the provisions of Subchapter J,Chapter 1, of the Internal Revenue Code.You may find it helpful to refer to Form1041, U.S. Income Tax Return for Estatesand Trusts, and its instructions.

When To FileIndividuals. If you were an employeeand received wages subject towithholding, file Form 1040NR by the 15thday of the 4th month after your tax yearends. A return for the 1995 calendar yearis due by April 15, 1996.

If you did not receive wages as anemployee subject to U.S. income taxwithholding, file Form 1040NR by the 15thday of the 6th month after your tax yearends. A return for the 1995 calendar yearis due by June 17, 1996.Estates and Trusts. If you file for anonresident alien estate or trust that hasan office in the United States, file thereturn by the 15th day of the 4th monthafter the tax year ends. If you file for anonresident alien estate or trust that doesnot have an office in the United States, filethe return by the 15th day of the 6thmonth after the tax year ends.Note: If the regular due date for filing fallson a Saturday, Sunday, or legal holiday,file by the next business day.Extension of Time To File. If youcannot file your return by the due date,you should file Form 4868, Application forAutomatic Extension of Time To File U.S.Individual Income Tax Return. You mustfile Form 4868 by the regular due date ofthe return.Note: Form 4868 does not extend thetime to pay your income tax. The tax is

due by the regular due date of the return.

Where To FileFile Form 1040NR with the InternalRevenue Service Center, Philadelphia,PA 19255, U.S.A.

Election To Be Taxed as aResident AlienYou can elect to be taxed as a U.S.resident for the whole year if either of thefollowing applies to you:q You were a nonresident alien on thelast day of the tax year, and your spousewas a U.S. citizen or resident alien on the

last day of the tax year.q You were a nonresident alien at thebeginning of the tax year, but you were aresident alien on the last day of the taxyear and your spouse was a U.S. citizenor resident alien on the last day of the taxyear. This also applies if both you andyour spouse were nonresident aliens atthe beginning of the tax year and bothwere resident aliens at the end of the taxyear.

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If you elect in 1995 to be taxed as aU.S. resident, you and your spouse mustfile a joint return for 1995 using Form1040, 1040A, or 1040EZ. To make thiselection, you must attach the statementdescribed in Pub. 519 to your return. Donot use Form 1040NR.

Your worldwide income for the wholeyear must be included and will be taxedunder U.S. tax laws. You must agree tokeep the records, books, and otherinformation needed to figure the tax. If

you made the election in an earlier year,you may file a joint return or separatereturn for 1995. If you file a separatereturn, use Form 1040 or Form 1040A.Your worldwide income for the whole yearmust be included whether you file a jointor separate return.Caution: Nonresident aliens who makethis election may forfeit the right to claimbenefits otherwise available under a U.S.tax treaty. For more details, getPub. 901,U.S. Tax Treaties, or refer to the specifictreaty.

Dual-Status TaxpayersNote: If you elect to be taxed as aresident alien (discussed earlier), thespecial instructions and restrictionsdiscussed heredo notapply.

Dual-Status Tax Year

A dual-status year is one in which youchange status between nonresident andresident alien. Different U.S. income taxrules apply to each status.

Most dual-status years are the yearsof arrival or departure. Before you arrivein the United States, you are anonresident alien. After you arrive, youmay or may not be a resident, dependingon the circumstances.

If you become a U.S. resident, you staya resident until you leave the UnitedStates. You may become a nonresidentalien when you leave, if, after leaving (orafter your last day of lawful permanentresidency if you met the green card test)and for the remainder of the calendar yearof your departure, you have a closerconnection to a foreign country than to theUnited States, and, during the nextcalendar year, you are not a U.S.resident under either the green card testor the substantial presence test. See Pub.519.

What and Where To File for aDual-Status Year

If you were a U.S. resident on the lastday of the tax year, file Form 1040, U.S.Individual Income Tax Return. WriteDual-Status Return across the top andattach a statement showing your incomefor the part of the year you were anonresident. You may use Form 1040NRas the statement; write Dual-StatusStatement across the top. File your returnand statement with the Internal RevenueService Center, Philadelphia, PA 19255,U.S.A.

If you were a nonresident on the lastday of the tax year, file Form 1040NR.Write Dual-Status Return across the topand attach a statement showing yourincome for the part of the year you werea U.S. resident. You may use Form 1040as the statement; write Dual-StatusStatement across the top. File your returnand statement with the Internal RevenueService Center, Philadelphia, PA 19255,U.S.A.Statements. Any statement you file

with your return must show your name,address, and social security number(taxpayer identification number). You donot have to sign the statement. Yoursignature on the return is sufficientbecause it also applies to supportingstatements and schedules.

Income Subject to Tax forDual-Status Year

As a dual-status taxpayer not filing a jointreturn, you are taxed on income from allsources for the part of the year you werea resident alien. Generally, you are taxedon income only from U.S. sources for thepart of the year you were a nonresident

alien. However, all income effectivelyconnected with the conduct of a trade orbusiness in the United States is taxable.

Income you received as a dual-statustaxpayer from sources outside the UnitedStates while a resident alien is taxable,even if you became a nonresident alienafter receiving it and before the close ofthe tax year. Conversely, income youreceived from sources outside the UnitedStates while a nonresident alien is nottaxable in most cases, even if youbecame a resident alien after receiving itand before the close of the tax year.Income from U.S. sources is taxablewhether you received it while a

nonresident alien or a resident alien.Restrictions for Dual-StatusTaxpayers

Standard Deduction. You may nottake the standard deduction.Head of Household. You may not usethe Head of HouseholdTax Table columnor Tax Rate Schedule.Joint Return. You may not file a jointreturn. However, see Election To BeTaxed as a Resident Alien earlier.Tax Rates. If you were married and anonresident of the United States for all orpart of the tax year and you do not makethe election to be taxed as a resident alien

as discussed earlier, you must use theTax Table column or Tax Rate Schedulefor Married Filing Separatelyto figure yourtax on income effectively connected witha U.S. trade or business. You may notuse the SingleTax Table column or TaxRate Schedule.Deduction for Exemptions. As adual-status taxpayer, you usually will beentitled to your own personal exemption.Subject to the general rules forqualification, you are allowed exemptionsfor your spouse and dependents in

figuring taxable income for the part of theyear you were a resident alien. Theamount you may claim for theseexemptions is limited to your taxableincome (determined without regard toexemptions) for the part of the year youwere a resident alien. You may not useexemptions (other than your own) toreduce taxable income to below zero forthat period.

Special rules apply for exemptions forthe part of the tax year a dual-status

taxpayer is a nonresident alien if thetaxpayer is a resident of Canada, Mexico,Japan, or the Republic of Korea, or is aU.S. national or a student or businessapprentice from India. See Pub. 519.

How To Figure Tax for Dual-StatusTax Year

When you figure your U.S. tax for adual-status year, you are subject todifferent rules for the part of the year youwere a resident and the part of the yearyou were a nonresident.

All income for the period of residenceand all income that is effectivelyconnected with a trade or business in the

United States for the period ofnonresidence, after allowable deductions,is added and taxed at the same rates thatapply to U.S. citizens and residents.Income that is not effectively connectedwith a trade or business in the UnitedStates for the period of nonresidence issubject to the flat 30% rate or lower treatyrate. No deductions are allowed againstthis income.

If you were a resident alien on the lastday of the tax year, add to the tax fromthe Tax Table, Tax Rate Schedules,Capital Gain Tax Worksheet, or Form8615 the tax on the noneffectivelyconnected income. Enter the total tax on

Form 1040, line 38. Next to line 38 showthe two amounts. If you are filing Form1040NR, enter the tax from the Tax Table,Tax Rate Schedules, Capital Gain TaxWorksheet, or Form 8615 on line 37 andthe tax on the noneffectively connectedincome on line 47.Credits. You are allowed a creditagainst your U.S. income tax liability forcertain taxes you paid, are considered tohave paid, or that were withheld from yourincome. These include:1. Tax withheld from wages earned inthe United States and taxes withheld atthe source from various items of incomefrom U.S. sources other than wages. This

includes U.S. tax withheld on dispositionsof U.S. real property interests.

When filing Form 1040, show the totaltax withheld on line 55. Enter amountsfrom the attached statement (Form1040NR, lines 53, 59a, 59b, 60a, and60b) to the left of line 55 and identify andinclude in the amount on line 55.

When filing Form 1040NR, show thetotal tax withheld on lines 53, 59a, 59b,60a, and 60b. Enter the amount from theattached statement (Form 1040, line 55)to the left of line 53 and identify andinclude in the amount on line 53.

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2. Tax paid with Form 1040-ES,Estimated Tax for Individuals, or Form1040-ES (NR), U.S. Estimated Tax forNonresident Alien Individuals.3. Tax paid with Form 1040-C, U.S.Departing Alien Income Tax Return.When filing Form 1040, include the taxpaid with Form 1040-C with the totalpayments on line 61. Identify the paymentin the area to the left of the entry.

As a dual-status taxpayer, yougenerally may claim tax credits using the

same rules that apply to resident aliens.

How To Report Income onForm 1040NR

Community Income

If either you or your spouse, or both youand your spouse, were nonresident aliensat any time during the tax year, and youhad community income during the year,treat the community income according tothe applicable community property lawsexcept as follows:q Earned income of a spouse, other thantrade or business or partnership

distributive share income. The spousewhose services produced the incomemust report it on his or her separatereturn.q Trade or business income, other thanpartnership income. Treat this income asreceived by the husband unless the wifeexercises substantially all of themanagement over the trade or business.q Partnership income (or loss) receivedfrom a trade or business carried on by thepartnership. Treat this income (or loss) asreceived by the spouse who is the partnerand report it on that spouse's return.q Income derived from the separateproperty of one spouse that is not earned

income, trade or business income, orpartnership distributive share income. Thespouse with the separate property mustreport this income on his or her separatereturn.

Get Pub. 555, Federal Tax Informationon Community Property, for more details.

Kinds of Income

You must divide your income for the taxyear into the following three categories:1. Income effectively connected with aU.S. trade or business. This income istaxed at the same rates that apply to U.S.citizens. Report it on page 1 of Form1040NR. Pub. 519 describes this incomein greater detail.2. U.S. income not effectivelyconnected with a U.S. trade or business.This income is taxed at 30% unless atreaty between your country and theUnited States has set a lower rate thatapplies to you. Report this income onpage 4 of Form 1040NR and figure the taxon it. Then, report the tax on line 47. Pub.519 describes this income more fully.Note: Use line 50 to report the 4% taxon U.S. source gross transportationincome.

3. Income exempt from U.S. tax.Complete items L and M on page 5 ofForm 1040NR and line 22 if applicable.

Dispositions of U.S. Real PropertyInterests

Gain or loss on the disposition of a U.S.real property interest by a nonresidentalien individual is treated as if the alienindividual were engaged in a trade orbusiness in the United States and as if thegain or loss were effectively connected

with the conduct of that trade or business.Losses of individuals shall be taken intoaccount only to the extent they would betaken into account under section 165(c).See section 897 and its regulations.

Report gains and losses on thedisposition of U.S. real property interestson Schedule D (Form 1040) and Form1040NR, line 14. Also, net gains may besubject to the alternative minimum tax.See the instructions for line 45.

The nonrecognition rules (notrecognizing gain or loss) apply only whena U.S. real property interest is exchangedfor an interest the sale of which would besubject to U.S. tax.

Money and the fair market value ofproperty received in exchange for aninterest in a partnership, trust, or estate,will, to the extent attributable to a U.S.real property interest held by thepartnership, trust, or estate, beconsidered as received from the sale orexchange of the U.S. real propertyinterest.

Gains or losses from the disposition ofa U.S. real property interest by apartnership, trust, or estate generally arepassed through and must be reported onthe income tax return of each partner orbeneficiary.U.S. Real Property Interests. A U.S.

real property interest is any interest (otherthan an interest solely as a creditor) inreal property located in the United Statesor the Virgin Islands, or any interest in adomestic corporation that is a U.S. realproperty holding corporation. Generally,real property includes:q Land and unsevered naturalproducts of the land, such as growingcrops and timber, and mines, wells, andother natural deposits.q Improvements on land, includingbuildings, other inherently permanentstructures, and structural components ofthese.q Personal property associated withthe use of real property, such asfarming, forestry, mining, or constructionequipment, or property used in lodgingfacilities or rented office space. See Pub.519 for exceptions.

A corporation is a U.S. real propertyholding corporation if the fair market valueof its U.S. real property interests is 50%or more of the fair market value of its U.S.real property interests, interests in foreignreal property, plus any other of its assetsthat are used or held for use in a tradeor business. For special rules, seesections 897(c)(4) and (5).

An interest in a foreign corporation is aU.S. real property interest only if thecorporation elected to be treated as adomestic corporation.

An interest in a domestic corporation isnot a U.S. real property interest if at thedate of disposition of the interest in thecorporation: (a) the corporation did nothold any U.S. real property interests, and(b) all the U.S. real property interests heldby the corporation during the shorter ofthe periods described in section

897(c)(1)(A)(ii):1. Were disposed of in a transaction inwhich all gain realized was recognized,or2. Ceased to be U.S. real propertyinterests because of the application ofsection 897(c)(1)(B) to one or more othercorporations.Stock Regularly Traded. A U.S. realproperty interest does not include anyclass of stock of a domestic corporationthat is regularly traded on an establishedsecurities market, unless you held morethan 5% of that class of stock at any timeduring the shorter of the periodsdescribed in section 897(c)(1)(A)(ii).

Section 897(h) provides special rulesfor a real estate investment trust.Virgin Islands Real Estate. Gain orloss on dispositions of real propertyinterests located in the U.S. Virgin Islandswill be reported on returns filed with theVirgin Islands tax authorities. Tax onthese dispositions will also be paid to theVirgin Islands tax authorities.

Income You May Elect To Treat asEffectively Connected With a U.S.Trade or Business

You may elect to treat some items ofincome as effectively connected with aU.S. trade or business. The electionapplies to all income from real property,or an interest in real property, located inthe United States and held for theproduction of income. Income from realproperty includes:q Rental income from real property.q Profit from disposing of U.S. timber,coal, or iron ore while keeping a share init.q Rents and royalties from mines, oil orgas wells, or other natural resources.

The election does not apply todispositions of U.S. real property interestsdiscussed earlier.

To make the election, attach a

statement to your return for the year of theelection. Include in your statement:1. That you are making the election.2. A complete list of all your realproperty, or any interest in real property,located in the United States (includinglocation). Give the legal identification ofU.S. timber, coal, or iron ore in which youhave an interest.3. The extent of your interest in the realproperty.4. A description of any substantialimprovements on such real property.



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5. Your income from the property.6. The dates you owned it.7. Whether the election is under section871(d) or treaty.8. Details of any previous elections andrevocations of the real property elections.

Foreign Income Taxed by theUnited States

You may be required to report someincome from foreign sources on your U.S.return if it is effectively connected with aU.S. trade or business. For this foreignincome to be treated as effectivelyconnected with a U.S. trade or business,you must have a fixed place of businessin the United States. The income, gain,or loss must result directly from the usualbusiness activities of your U.S. office. Thekinds of foreign income that may be taxedat the graduated rates are:q Interest or dividends from the U.S.business.q Income from foreign sales made byyour U.S. office.q Rents or royalties you received for theuse of intangible property located outside

the United States or the privilege of usingit. Such property includes patents,copyrights, trademarks, and franchises.

Line Instructions forForm 1040NR

Name, Address, andIdentifying NumberName. If you are filing Form 1040NRfor an estate or trust, enter the name ofthe estate or trust, and your name, title,

and address. Also, give the name andaddress of any U.S. grantors andbeneficiaries.P.O. Box. If your post office does notdeliver mail to your home and you havea P.O. box, enter your box numberinstead of your present home address.Foreign Address. If your address isoutside the United States or itspossessions or territories, enter theinformation in the following order: city,province or state, and country. Do notabbreviate the country name. Include thepostal code where applicable.Identifying Number. If you are filingForm 1040NR for an estate or trust, enter

the employer identification number of theestate or trust.If you are a nonresident alien engaged

in a trade or business in the UnitedStates, you must get a taxpayeridentification number. Generally, thisnumber is your social security number(SSN). Apply for your number using FormSS-5, which you can get at SocialSecurity Administration (SSA) offices. Fillit in and return it to the SSA. An incorrector missing SSN will delay your refund.

If you do not have an SSN and are nototherwise required to get one, you canuse an IRS-assigned identificationnumber. This number is similar to anSSN but begins with the number 9. If1995 is the first year you are filing a taxreturn and you are not otherwise requiredto get an SSN, do not make an entry inthe space labeled Identifying or socialsecurity number. When the IRS receivesyour return, you will be assigned anidentification number. You must use this

number when you file tax returns in thefuture or until you get an SSN.

Filing StatusThe amount of your tax depends on yourfiling status. Before you decide which boxto check, read the following explanations.Were You Single or Married? If youwere married on December 31, consideryourself married for the whole year. If youwere single, divorced, or legally separatedunder a decree of divorce or separatemaintenance on December 31, consideryourself single for the whole year. If youmeet the tests described under Married

Persons Who Live Apart below, youmay consider yourself single for the wholeyear.

If your spouse died in 1995, consideryourself married to that spouse for thewhole year, unless you remarried beforethe end of 1995.Married Persons Who Live Apart.Some married persons who have a childand who do not live with their spouse mayfile as single. If you meet all five testsbelow and you are a married resident ofCanada or Mexico, or a U.S. national,check the box on line 1. If you meet thetests and you are a married resident ofJapan or the Republic of Korea, check thebox on line 2.1. You file a separate return from yourspouse.2. You paid more than half the cost tokeep up your home in 1995.3. You lived apart from your spouseduring the last 6 months of 1995.4. Your home was the principal homeof your child, stepchild, adopted child, orfoster child for more than half of 1995.5. You claim this child as yourdependent or the child's other parentclaims him or her as a dependent underthe rules on page 6 for Children ofDivorced or Separated Parents.

Line 6Qualifying Widow(er) WithDependent Child. You may check thebox on line 6 and use joint return tax ratesfor 1995 if all seven of the followingapply.1. You were a resident of Canada,Mexico, Japan, or the Republic of Korea,or a U.S. national.2. Your spouse died in 1993 or 1994and you did not remarry in 1995.3. You have a child, stepchild, adoptedchild, or foster child whom you can claimas a dependent.

4. This child lived in your home for allof 1995. Temporary absences, such as forschool, vacation, or medical care, countas time lived in the home.5. You paid over half the cost ofkeeping up your home.6. You were a resident alien or U.S.citizen the year your spouse died. Thisrefers to your actual status, not theelection that some nonresident aliens canmake to be taxed as U.S. residents.7. You could have filed a joint return

with your spouse the year he or she died,even if you didn't actually do so.

ExemptionsExemptions for estates and trusts aredescribed in the instructions for line 35.Note: Residents of India who werestudents or business apprentices may beable to claim exemptions for their spouseand dependents. See Pub. 519 for details.Line 7aYourself. Generally, you canalways take an exemption for yourself.However, if you can be claimed as adependent on another person's U.S. tax

return (such as your parent's return), youcannot take an exemption for yourselfeven if that person chose not to claim you.Line 7bSpouse. If you checked filingstatus box 3 or 4, you can take anexemption for your spouse only if yourspouse had no gross income for U.S. taxpurposes and cannot be claimed as adependent on another U.S. taxpayer'sreturn. (You can do this even if yourspouse died in 1995.) In addition, if youchecked filing status box 4, your spousemust have lived with you in the UnitedStates at some time during 1995.Line 7cDependents. Only residentsof Canada, Mexico, Japan, the Republic

of Korea, and U.S. nationals may claimexemptions for their dependents. If youwere a resident of Canada or Mexico, ora U.S. National (American Samoan), youcan claim exemptions for your childrenand other dependents on the same termsas U.S. citizens. Get Pub. 501,Exemptions, Standard Deduction, andFiling Information, for more details. If youwere a resident of Japan or the Republicof Korea, you may claim an exemption forany of your children who lived with you inthe United States at some time during1995.

You can take an exemption for each ofyour dependents who was alive during

some part of 1995. This includes a babyborn in 1995 or a person who died in1995.

After you have figured out whom youcan claim as a dependent, fill in thecolumns on line 7c. If you have morethan five dependents, show theinformation requested in columns (1)through (4) for each of those dependentson an attached statement.

Column (1). Enter the name of eachdependent.



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Column (2). Each dependent musthave an SSN unless the dependent wasborn in November or December of 1995.You must enter the SSN in column (2). Ifyou do not enter it or if the SSN is wrong,it will take us longer to issue any refundshown on your return. You may also haveto pay a $50 penalty. If your dependentwas born in November or December of1995 and does not have an SSN, enter"11/95" or "12/95" in column (2).

Your dependent can get an SSN by

filing Form SS-5 with an SSA office. Ifyour dependent won't have an SSN by thedate your return is due, see Extensionof Time To File on page 2. If yourdependent lives in Canada or Mexico, seePub. 501 for details on how to get anSSN.

Column (3). Enter your dependent'srelationship to you. For example, if thedependent is your child, enter son ordaughter.

Column (4). Enter the number ofmonths your dependent lived with you in1995. Count temporary absences such asfor school or vacation as time lived in yourhome. If your dependent was born or died

in 1995, enter 12 in this column.Children Who Didn't Live With You

Due to Divorce or Separation. If youare claiming a child who didn't live withyou under the rules for Children ofDivorced or Separated Parents below,enter the total number of such children onthe line to the right of line 7c labeled No.of your children on 7c who: didn't live withyou due to divorce or separation. If youput a number on this line, you must doone of the following each year you claimthis child as a dependent.1. Check the box on line 7d if yourdivorce decree or written separationagreement went into effect before 1985

and it states that you can claim the childas your dependent.2. Attach Form 8332 or similarstatement. If your divorce decree orseparation agreement went into effectafter 1984 and it states you can claim thechild as your dependent without regard toany condition, such as payment ofsupport, you may attach a copy of certainpages from the decree or agreementinstead. Get Pub. 504, Divorced orSeparated Individuals, for details.Note: You must attach the requiredinformation even if you filed it in an earlieryear.

Other Dependent Children. Enter the

total number of dependent children whodid not live with you for reasons otherthan divorce or separation on the linelabeled Dependents on 7c not enteredabove.

Children of Divorced or SeparatedParents. The parent who had custody ofa child for most of the year (the custodialparent) can generally claim the child asa dependent if both parents together paidover half of the child's support. Thisgeneral rule also applies to parents wholived apart from each other during the last6 months of the year. But the parent who

did not have custody, or who had the childfor the shorter time (the noncustodialparent), may claim the child as adependent if both parents together paidover half of the child's support and either1 or 2 below applies:1. The custodial parent signs Form8332 or a similar statement agreeing notto claim the child's exemption for 1995,or2. A decree of divorce or separatemaintenance (or a written agreement) that

was in effect before 1985 states that thenoncustodial parent can claim the childas a dependent and he or she gave atleast $600 for the child's support in 1995.This rule does not apply if the decree oragreement was changed after 1984 to saythat the noncustodial parent cannot claimthe child as a dependent.

Rounding Off to WholeDollarsYou may round off cents to the nearestwhole dollar on your forms and schedules.This will make it easier to complete your

return. To do so, drop amounts under 50cents and increase amounts from 50 to99 cents to the next dollar. For example,$1.39 becomes $1 and $2.50 becomes$3. If you do round off, do so for allamounts. But if you have to add two ormore amounts to figure the amount toenter on a line, include cents when addingand only round off the total. Example.You received two W-2 forms, one showingwages of $5,000.55 and one showingwages of $18,500.73. On Form 1040NR,line 8, you would enter $23,501($5,000.55 + $18,500.73 = $23,501.28).

Income EffectivelyConnected With U.S. Tradeor BusinessPub. 519 explains how income isclassified and what income you shouldreport here. The instructions for thissection assume you have decided that theincome involved is effectively connectedwith a U.S. trade or business in which youwere engaged. But your decision may notbe easy. Interest, for example, may beeffectively connected with a U.S. trade orbusiness, it may not be, or it may be taxexempt. The tax status of income alsodepends on its source. Under some

circumstances, items of income fromforeign sources are treated as effectivelyconnected with a U.S. trade or business.Other items are reportable as effectivelyconnected or not effectively connectedwith a U.S. trade or business, dependingon how you elect to treat them.Line 8Wages, Salaries, Tips, etc.Enter the total of your effectivelyconnected wages, salaries, tips, etc. But,do not include amounts exempted undera tax treaty and reported in Item M onpage 5 of Form 1040NR. Also include inthis total:

q Corrective distributions of excess salarydeferrals.q Corrective distributions of excesscontributions and excess aggregatecontributions to a retirement plan.q Disability pensions if you have notreached the minimum retirement age setby your employer.Note: Disability pensions received afteryou reach your employer's minimumretirement age and other pensions shownonForm 1099-R(other than payments

from an IRA) are reported on lines 17aand 17b of Form 1040NR. However, youmust report this income on line 73 if it isnot effectively connected with a U.S. tradeor business. Payments from an IRA arereported on lines 16a and 16b.

Missing or Incorrect Form W-2. If youdon't get a Form W-2 by January 31,1996, ask your employer for it. If you loseyour Form W-2 or it is incorrect, ask youremployer for a new one.

Even if you don't get a Form W-2 fromyour employer, you must still report yourearnings. For example, if you were paidless than $1,000 as a householdemployee in 1995, your employer is not

required to give you a W-2 form, but youmust still include the wages on line 8.

Employer-Provided Vehicle. If youused an employer-provided vehicle forboth personal and business use and100% of its annual lease value wasincluded as wages on your W-2 form, youmay be able to deduct the business useof the vehicle on Schedule A. But youmust use Form 2106, Employee BusinessExpenses, to do so. The total annuallease value of the vehicle should beshown in box 12 of your W-2 form or ona separate statement. For more details,get Pub. 917, Business Use of a Car.

Tip Income. Be sure to report all tip

income you actually received, even if it isnot included in box 1 of your W-2 form(s).You must report as income the amountof allocated tips shown on your W-2form(s) unless you can prove that youreceived less. Allocated tips should beshown in box 8 of your W-2 form(s). Theyare not included in box 1 of your W-2form(s). For details on allocated tips, getPub. 531, Reporting Tip Income.

Use Form 4137, Social Security andMedicare Tax on Unreported Tip Income,to figure any social security and Medicaretax on unreported or allocated tips. Seethe instructions for line 48.

Excess Salary Deferrals. You mayhave chosen to have your employercontribute part of your pay to certainretirement plans (such as a 401(k) planor the Federal Thrift Savings Plan) insteadof having it paid to you. If so, theDeferred compensation box in box 15of your W-2 form should be checked. Theamount deferred should be shown in box13. The total amount that may be deferredfor 1995 under all plans is generallylimited to $9,240 for each person. But adifferent limit may apply if amounts weredeferred under a tax-sheltered annuityplan or an eligible plan of a state or local



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government or tax-exempt organization.Get Pub. 575, Pension and AnnuityIncome, for details. Any amount deferredin excess of these limits must be reportedon Form 1040NR, line 8.

Dependent Care Benefits (DCB). Ifyou received benefits for 1995 under youremployer's dependent care plan, you maybe able to exclude part or all of them fromyour income. You must use Form 2441,Child and Dependent Care Expenses, todo so. The benefits should be shown in

box 10 of your W-2 form(s). First, fill inParts I and III of Form 2441. Include anytaxable benefits from line 20 of that formon Form 1040NR, line 8. On the dottedline next to line 8, enter DCB.Line 9aTaxable Interest Income.Report on line 9a all of your taxableinterest income from assets effectivelyconnected with a U.S. trade or business.

If you received interest not effectivelyconnected with a U.S. trade or business,report it on page 4 of Form 1040NR,unless it is tax exempt under a treaty. GetPub. 901, U.S. Tax Treaties. In addition,interest from a U.S. bank, savings andloan association, or similar institution, and

from certain deposits with U.S. insurancecompanies, is tax exempt if it is noteffectively connected with a U.S. trade orbusiness.

Report any interest you received or thatwas credited to your account so you couldwithdraw it, even if it wasn't entered inyour passbook. Interest credited in 1995on deposits you could not withdrawbecause of the bankruptcy or insolvencyof the financial institution may not have tobe included in your 1995 income. Fordetails, get Pub. 550, Investment Incomeand Expenses.Line 9bTax-Exempt Interest. If youreceived any tax-exempt interest income,

such as from municipal bonds, report iton line 9b. Include any exempt-interestdividends from a mutual fund or otherregulated investment company. Do notinclude interest earned on your IRA.Line 10Dividend Income. Enter yourtotal ordinary dividends from assetseffectively connected with a U.S. trade orbusiness. If you received capital gaindistributions, see the instructions for line14.

Nontaxable Distributions. Somedistributions are nontaxable because theyare a return of your cost. They will not betaxed until you recover your cost. Youmust reduce your cost (or other basis) by

these distributions. After you get back allof your cost (or other basis), you mustreport these distributions as capital gains.Line 11Taxable Refunds, Credits, orOffsets of State and Local IncomeTaxes. If you received a refund, credit,or offset of state or local income taxes in1995 that you paid and deducted before1995, part or all of this amount may betaxable. You may receive Form 1099-G,or similar statement, showing the refund.

If you chose to apply part or all of therefund to your 1995 estimated state orlocal income tax, the amount applied istreated as received in 1995.

If, in the year you paid the tax, you (a)did not itemize deductions on Form1040NR or Schedule A (Form 1040), or(b) filed Form 1040A or Form 1040EZ,none of your refund is taxable.

For details on how to figure the amountyou must report as income, seeRecoveries in Pub. 525, Taxable and

Nontaxable Income.Line 12Scholarship and FellowshipGrants. If you received a scholarshipor fellowship, part or all of it may betaxable.

If you were a degree candidate, theamounts you used for expenses otherthan tuition and course-related expensesare generally taxable. For example,amounts used for room, board, and travelare generally taxable.

If you were not a degree candidate, thefull amount of the scholarship orfellowship is generally taxable. Also,amounts received as a scholarship orfellowship that are payment for teaching,

research, or other services are taxableeven if the services were required to getthe grant.

Report the total amount of the grant online 12 and show any nontaxable part online 29. If the grant was reported on Form1042-S, enter the gross amount fromcolumn (b) on line 12. But do not includeamounts exempted under a tax treaty andreported in item M on page 5 of Form1040NR. Attach a statement that shows:the amount of your grant, the dates itcovers, the grantor's name, expenses thegrant covers, and the conditions underwhich it was given to you. Explain howmuch was taxable, how much was tax

exempt, and why.Attach any Form 1042-S or Form W-2

you received from the college orinstitution. If you did not receive a 1042-Sor W-2 form, attach a statement from thecollege or institution (on their letterhead)showing the details of the grant.Line 13Business Income or(Loss). If you operated your ownbusiness or practiced your profession asa sole proprietor, report your income andexpenses on Schedule C or ScheduleC-EZ (Form 1040).

Include any income you received as adealer in stocks, securities, andcommodities through your U.S. office. Ifyou dealt in these items through anindependent agent, such as a U.S. broker,custodian, or commissioned agent, yourincome may not be considered effectivelyconnected with a U.S. business. Forgeneral information on business incomeor loss, see the Instructions for ScheduleC (Form 1040) and get Pub. 334, TaxGuide for Small Business.Line 14Capital Gain or (Loss).Caution: At the time these instructionswere printed, Congress was consideringlegislation that would change the tax

treatment of capital gains, includingcapital gain distributions. GetPub. 553,Highlights of 1995 Tax Changes.

See the Instructions for Schedule D(Form 1040). Enter the effectivelyconnected gain or (loss) from ScheduleD. You may need Pub. 544, Sales andOther Dispositions of Assets. But if youreceived capital gain distributions anddo not need Schedule D for other capitaltransactions, enter those distributions online 14. Write CGD on the dotted line

next to line 14.Gains and losses from disposing of

U.S. real property interests are taxed asif you were engaged in a U.S. trade orbusiness and are treated as effectivelyconnected with that trade or business.See Dispositions of U.S. Real PropertyInterests on page 4.Note: Your tax may be less if you canuse theCapital Gain Tax Worksheetonpage 12. You can use it if your taxableincome (Form 1040NR, line 36) ismorethan$47,125 if you checked filing statusbox 3, 4, or 5; $56,550 if you checkedfiling status box 1 or 2; or $94,250 if youchecked filing status box 6.

Line 15Other Gains or (Losses). Ifyou sold or exchanged assets used in aU.S. trade or business, see theInstructions for Form 4797.Lines 16a and 16bIRADistributions. Use lines 16a and 16bto report effectively connected payments(distributions) you received from yourindividual retirement arrangement (IRA).These include regular distributions, earlydistributions, rollovers, and any othermoney or property you received from yourIRA account or annuity. But if this incomeis not effectively connected with your U.S.trade or business, report it on line 73.Generally, you will receive a Form

1099-R showing the amount of yourdistribution.

If you made any nondeductiblecontributions to your IRA for 1995 or anearlier year or you rolled your IRAdistribution over into another IRA, see thenext page. Do not use lines 16a and 16bto report a rollover from a qualifiedemployer's plan to an IRA. Instead, seethe instructions for lines 17a and 17b.

IRA distributions that you must includein income are taxed at the same rate asother income. You may not use thespecial averaging rule for lump-sumdistributions from qualified employerplans.

If your IRA distribution is fully taxable,enter it on line 16b; do not make an entryon line 16a. If only part is taxable, enterthe total distribution on line 16a and thetaxable part on line 16b.Caution: You may have to pay anadditional tax if(1)you received an earlydistribution from your IRA and the totaldistribution was not rolled over, (2)youreceived a distribution in excess of$150,000, or(3)you were born beforeJuly 1, 1924, and received less than theminimum required distribution. See theinstructions for line 49 for details.



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Nondeductible Contributions. If youmade nondeductible contributions for anyyear, only part of your IRA distributionmay be taxable. Get Form 8606 to figurethe taxable part of your IRA distribution.If you made any nondeductiblecontributions for 1995, you may need tomake a special computation. Get Pub.590, Individual Retirement Arrangements(IRAs), for details. Enter the totaldistribution on line 16a and the taxablepart on line 16b.

IRA Rollovers. A rollover is a tax-freedistribution of cash or other assets fromone retirement plan that is contributed toanother plan. Use lines 16a and 16b toreport a rollover from one IRA to anotherIRA. Enter the total distribution on line16a. If the total on line 16a was rolledover, enter zero on line 16b. If the totalwas not rolled over, enter the part notrolled over on line 16b. But if you evermake nondeductible contributions to anyof your IRAs, use Form 8606 to figure thetaxable part to enter on line 16b. For moredetails, see Pub. 590.Lines 17a and 17bPensions andAnnuities. Use lines 17a and 17b to

report effectively connected pension andannuity payments you received, includingpayments (distributions) from retirementplans, life insurance annuity contracts,profit-sharing plans, andemployee-savings plans. See page 9 fordetails on rollovers and lump-sumdistributions. But if this income is noteffectively connected with your U.S. tradeor business, report it on line 73.

Also, use these lines to report disabilitypensions received after you reach theminimum retirement age set by youremployer. Disability pensions receivedbefore you reach your employer'sminimum retirement age are reported online 8.

Some annuities are tax-exempt. Seesection 871(f).Note: If you perform services in theUnited States, your income is effectivelyconnected with the conduct of a U.S.

trade or business. When you receive apension in a later year as a result of theseservices, the pension is also consideredeffectively connected with the conduct ofa U.S. trade or business.

In general, you should receive a Form1099-R showing the amount youreceived. Attach Form 1099-R to Form1040NR if any Federal income tax waswithheld.

Do not use lines 17a and 17b to reportcorrective distributions of excess salarydeferrals, excess contributions, or excessaggregate contributions from retirementplans. Instead, see the instructions for line8. Also, do not use lines 17a and 17b to

report social security or railroadretirement benefits shown on FormsSSA-1042S and RRB-1042S. Instead,see the instructions on page 17.Caution: Certain transactions, such asloans against your interest in a qualifiedplan, may be treated as taxabledistributions and may also be subject toadditional taxes. For details, getPub.575, Pension and Annuity Income.

Fully Taxable Pensions andAnnuities. If your pension or annuity isfully taxable, enter it on line 17b; do notmake an entry on line 17a. Yourpayments are fully taxable if either of thefollowing applies:q You did not contribute to the cost ofyour pension or annuity, orq You got your entire cost back tax freebefore 1995.

Fully taxable pensions and annuitiesalso include military retirement pay shown

on Form 1099-R. For details on militarydisability pensions, get Pub. 525, Taxableand Nontaxable Income. If you receiveda Form RRB-1099-R, get Pub. 575 to seehow to report your benefits.

Partially Taxable Pensions andAnnuities. If your pension or annuity ispartially taxable and your Form 1099-Rdoes not show the taxable part, you mustuse the General Rule to figure the taxablepart. The General Rule is explained inPub. 939, Pension General Rule(Nonsimplified Method). But if yourannuity starting date (defined later) wasafter July 1, 1986, you may be able to usethe Simplified General Rule, explained

below.You can ask the IRS to figure the

taxable part for you for a $50 fee. Submityour request before the due date of yourreturn, including extensions. For details,see Pub. 939.

If your Form 1099-R shows a taxableamount, you may report that amount online 17b. But you may be able to report alower taxable amount by using theGeneral Rule or, if you qualify, theSimplified General Rule.

Once you have figured the taxable partof your pension or annuity, enter thatamount on line 17b and the total on line17a.

Annuity Starting Date. Your annuitystarting date is the later of the first day ofthe first period for which you received apayment, or the date the plan'sobligations became fixed.

Simplified General Rule. This methodwill usually give you the same amount ormore of the pension or annuity tax freeeach year as the General Rule or asfigured by the IRS. You can use thissimpler method if all four of the followingapply.1. Your annuity starting date was afterJuly 1, 1986.2. The payments are for (a) your life or

(b) your life and that of your beneficiary.3. The payments are from a qualifiedemployee plan, a qualified employeeannuity, or a tax-sheltered annuity.4. At the time the pension or annuitypayments began, either you were underage 75 or the number of years ofguaranteed payments was fewer than 5.

If all four of the above apply, use theworksheet on this page to figure thetaxable part of your pension or annuity. Ifyou are a beneficiary entitled to a deathbenefit exclusion, add the exclusion to theamount you enter on line 2 of the

Simplified General Rule WorksheetLines 17a and 17b (keep for your records)

Enter the total pension or annuity payments received this year. Also,enter this amount on Form 1040NR, line 17a

1.1.

Enter your cost in the plan at the annuity starting dateplus any death benefit exclusion (see page 9)2. 2.

Age at annuity starting date(see page 9):

3.Enter:

300260240170120

55 and under56606165667071 and older

3.Divide line 2 by line 3 4.4.

Multiply line 4 by the number of months for which thisyears payments were made. If your annuity startingdate was before 1987, skip lines 6 and 7 and enterthis amount on line 8. Otherwise, go to line 6

5.

5.

Enter the amount, if any, recovered tax free in yearsafter 1986 6.

6.

Subtract line 6 from line 2 7.7.

Enter the smaller of line 5 or line 78. 8.

Taxable amount. Subtract line 8 from line 1. Enter the result, but notless than zero. Also, enter this amount on Form 1040NR, line 17b. Ifyour Form 1099-R shows a larger amount, use the amount on this lineinstead of the amount from Form 1099-R

9.

9.

Note: If you had more than one partially taxable pension or annuity, figure the taxable partof each separately. Enter the total of the taxable parts on Form 1040NR, line 17b. Enterthe total pension or annuity payments received in 1995 on Form 1040NR, line 17a.



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worksheet. Do this even if you received aForm 1099-R showing a taxable amount.The payer of the annuity cannot add thedeath benefit exclusion to your cost whenfiguring the taxable amount. Attach asigned statement to your return statingthat you are entitled to a death benefitexclusion. For more details on theSimplified General Rule, see Pub. 575 orPub. 721, Tax Guide to U.S. Civil ServiceRetirement Benefits.Caution: If you received U.S. Civil

Service retirement benefits and you chosethe lump-sum credit option, use theworksheet in Pub. 721. Do notuse theone on page 8.

Age at Annuity Starting Date. If youare the retiree, use your age on theannuity starting date. If you are thesurvivor of a retiree, use the retiree's ageon his or her annuity starting date. If youare the beneficiary of an employee whodied, see Pub. 575. If there is more thanone beneficiary, see Pub. 575 or Pub. 721to figure each beneficiary's taxableamount.

Changing Methods. If your annuitystarting date was after July 1, 1986, you

may be able to change the way you figurethe taxable part of your pension. Fordetails, see Pub. 575 or Pub. 721.

Death Benefit Exclusion. If you arethe beneficiary of a deceased employeeor former employee, amounts paid to youby, or on behalf of, an employer becauseof the death of the employee may qualifyfor a death benefit exclusion of up to$5,000. If you are entitled to thisexclusion, add it to the cost of the pensionor annuity. Special rules apply if you arethe survivor under a joint and survivor'sannuity. For details, see Pub. 575.

Rollovers. A rollover is a tax-freedistribution of cash or other assets from

one retirement plan that is contributed toanother plan. Use lines 17a and 17b toreport a rollover, including a directrollover, from one qualified employer'splan to another or to an IRA.

Enter on line 17a the total distributionbefore income tax or other deductionswere withheld. This amount should beshown in box 1 of Form 1099-R. Fromthe total on line 17a, subtract anycontributions (usually shown in box 5) thatwere taxable to you when made. Fromthat result, subtract the amount that wasrolled over either directly or within 60 daysof receiving the distribution. Enter theremaining amount, even if zero, on line

17b.Special rules apply to partial rollovers

of property. For more details on rollovers,including distributions under qualifieddomestic relations orders, see Pub. 575.

Lump-Sum Distributions. If youreceived a lump-sum distribution from aprofit-sharing or retirement plan, yourForm 1099-R should have the Totaldistribution box in box 2b checked. Youmay owe an additional tax if you (1)received an early distribution from aqualified retirement plan and the total

amount was not rolled over, or (2)received a distribution in excess of$150,000 from a qualified retirement plan.For details, see the instructions for line49.

Enter the total distribution on line 17aand the taxable part on line 17b. But youmay pay less tax on the distribution if youwere born before 1936 or were at leastage 591/2 on the date of the distribution,you meet certain other conditions, andyou chose to use Form 4972, Tax on

Lump-Sum Distributions, to figure the taxon any part of the distribution. You mayalso be able to use Form 4972 if you arethe beneficiary of a deceased employeewho was either age 591/2 or older on thedate of death or born before 1936 andwas age 50 or older on the date of death.For details, get Form 4972.Line 20UnemploymentCompensation. Enter on line 20 anyunemployment compensation (insurance)you received. By January 31, 1996, youshould receive a Form 1099-G showingthe total amount paid to you during 1995.This amount should be shown in box 1.

If you received an overpayment of

unemployment compensation in 1995 andyou repaid any of it in 1995, subtract theamount you repaid from the total amountyou received. Enter the result on line 20.Also, enter Repaid and the amount yourepaid on the dotted line next to line 20.

If, in 1995, you repaid unemploymentcompensation that you reported in anearlier year, see Repayments in Pub.525, Taxable and Nontaxable Income.

Do not include on line 20 anysupplemental unemployment benefitsreceived from a company-financedsupplemental unemployment benefit fund.Instead, report these benefits on line 8.Line 21Other Income. Use line 21

to report any other income effectivelyconnected with your U.S. business thatis not reported on your return or otherschedules. List the type and amount ofincome. If necessary, show the requiredinformation on an attached statement.Examples of income to report on line 21are:q Repayments of expenses you deductedin an earlier year if they reduced your tax.q Fees received as a nonprofessionalfiduciary, such as an executor oradministrator of the estate of a deceasedfriend or relative.

For more details, see MiscellaneousTaxable Income in Pub. 525.

Report other income on page 4 of Form1040NR if not effectively connected witha U.S. trade or business.

Recapture of Clean-Fuel VehicleDeduction. If you claimed this deductionin 1993 or 1994 for property that no longerqualifies as clean-fuel vehicle property,you may have to include on line 21 partor all of the amount you deducted. Fordetails, see Pub. 535.

Net Operating Loss. If you had a netoperating loss in an earlier year to carryforward to 1995, include it as a negative

amount in parentheses on line 21. Attacha statement showing how you figured theamount. Get Pub. 536, Net OperatingLosses, for more details.Line 22. Use line 22 to report your totaleffectively connected income that isexempt from tax by a tax treaty. Do notinclude this exempt income on line 23.Also, you must complete item M on page5 of Form 1040NR.

AdjustmentsAdjustments are amounts you cansubtract from your income effectivelyconnected with a U.S. trade or business.Line 24IRA Deduction. Use line 24to deduct contributions to your individualretirement arrangement (IRA).Caution: If you were covered by aretirement plan (qualified pension,profit-sharing (including 401(k)), annuity,Keogh, SEP, etc.) at work or throughself-employment, your IRA deduction maybe reduced or eliminated. Earnings oncontributions to your IRA are not taxeduntil they are distributed to you.

Special Rule for Married Individuals.If you checked filing status box 3, 4, or 5and you were not covered by a retirementplan but your spouse was, you areconsidered covered by a plan unless youlived apart from your spouse for all of1995.

Not Covered by a Retirement Plan.If you were not covered by a retirementplan, you can take a full IRA deduction.

Covered by a Retirement Plan. YourForm W-2 should have the Pensionplan box in box 15 checked if you werecovered by your employer's plan even ifyou were not vested in the plan. You arealso covered by a plan if you were

self-employed and had a Keogh or SEPretirement plan.Get Pub. 590, Individual Retirement

Arrangements (IRAs), for more details.Line 25Moving Expenses.Employees and self-employed persons(including partners) can deduct certainmoving expenses. The move must be inconnection with employment thatgenerates effectively connected income.

You can take this deduction if youmoved in connection with your job orbusiness and your new workplace is atleast 50 miles farther from your old homethan your old home was from your oldworkplace. If you had no former

workplace, your new workplace must beat least 50 miles from your old home. Thededuction is generally limited to moves toor within the United States or itspossessions. If you meet theserequirements, get Pub. 521, MovingExpenses. Use Form 3903, MovingExpenses, to figure the amount to enteron this line.Note: Expenses incurred before 1994that you didn't previously deduct are onlyallowed as an itemized deduction onSchedule A.



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Self-Employed Health Insurance Deduction WorksheetLine 26(keep for your records)

1. Enter total payments made in 1995 for health insurance coveragefor 1995 for you, your spouse, and dependents. But do not includeamounts for any month you were eligible to participate in anemployer-sponsored health plan 1.

2. Multiply line 1 by 30% (.30) 2.

3. Enter your net profit and any other earned income* from thebusiness under which the insurance plan is established, minusany deduction you claim on Form 1040NR, line 27 3.

4. Self-employed health insurance deduction. Enter the smallerof line 2 or line 3 here and on Form 1040NR, line 26 4.

*Earned income includes net earnings and gains from the sale, transfer, or licensing ofproperty you created. It does not include capital gain income.

Tax Computation on IncomeEffectively Connected With aU.S. Trade or BusinessLine 33Itemized Deductions. Entertotal itemized deductions from ScheduleA.Note: Residents of India who werestudents or business apprentices may beable to take the standard deduction

instead of their itemized deductions. SeePub. 519 for details.Line 35Deduction for Exemptions.You can claim exemptions only to theextent of your income that is effectivelyconnected with a U.S. trade or business.

If you file as an individual, multiply$2,500 by the total number of exemptionsentered on line 7e. (If you were a residentof Japan or the Republic of Korea, youmust figure the exemptions for yourspouse and children according to theproportion your U.S. income bears to yourtotal income. For details, see Pub. 519.)But use the worksheet on the next pageto figure the amount, if any, to enter on

line 35 if your adjusted gross income fromline 32 is more than $86,025 ($114,700 ifyou checked filing status box 1 or 2;$172,050 if you checked filing status box6).

If you are filing for an estate, enter$600 on line 35. If you are filing for a trustwhose governing instrument requires it todistribute all its income currently, enter$300 on line 35. Any other trust is allowedan exemption of $100.Line 37Tax. To figure your tax, useone of the following methods.

Tax Table. If your taxable income (line36) is less than $100,000, you must usethe Tax Table to find your tax unless you

are required to use Form 8615 or you usethe Capital Gain Tax Worksheet (seebelow). The Tax Table starts on page 19.Be sure you use the correct column. If youchecked filing status box 3, 4, or 5, youmust use the Married filing separatelycolumn.

Tax Rate Schedules. You must usethe Tax Rate Schedules on page 31 tofigure your tax if your taxable income is$100,000 or more, OR you are filing foran estate or trust, unless you are requiredto use Form 8615 or you use the CapitalGain Tax Worksheet.

Capital Gain Tax Worksheet. If youhad a net capital gain on Schedule D or

you reported capital gain distributions onForm 1040NR, line 14, your tax may beless if you figure it using the worksheeton page 12.

Form 8615. You must generally useForm 8615 to figure the tax for any childwho was under age 14 on January 1,1996, and who had more than $1,300 ofinvestment income, such as taxableinterest or dividends, that is effectivelyconnected with a U.S. trade or business.But if neither of the child's parents was

Line 26Self-Employed HealthInsurance Deduction. If you wereself-employed and had a net profit for theyear, you may be able to deduct part ofthe amount paid for health insurance onbehalf of yourself, your spouse, anddependents. But if you were also eligibleto participate in any subsidized healthplan maintained by your or your spouse'semployer for any month or part of a monthin 1995, amounts paid for health

insurance coverage for that month cannotbe used to figure the deduction. For moredetails, get Pub. 535, BusinessExpenses.

If you qualify to take the deduction, usethe worksheet above to figure the amountyou can deduct.Line 27Keogh & Self-Employed SEPPlans. If you are self-employed or apartner, deduct payments to your Keogh(HR 10) plan or Simplified EmployeePension (SEP) on line 27. If a SEP, besure to check the box. Deduct paymentsfor your employees on Schedule C or F(Form 1040).

There are two types of Keogh plans:q A defined-contribution plan has aseparate account for each person.Benefits are based on the amount paid toeach account.q Payments to a defined-benefit planare determined by the funds needed togive a specific benefit at retirement. If youdeduct payments to this kind of plan,enter DB next to line 27.

Get Pub. 560, Retirement Plans for theSelf-Employed, for more details, includinglimits on the amount you can deduct.Line 28Penalty on Early Withdrawalof Savings. The Form 1099-INT orForm 1099-OID you received will showthe amount of any penalty you werecharged.Line 29Scholarship and FellowshipGrants Excluded. If you were a degreecandidate, enter amounts used for tuitionand course-related expenses (fees,books, etc.) Do not include any amountshown on line 22.Line 30Total Adjustments. Includein the total on line 30 any of the followingadjustments that are related to youreffectively connected income.

Qualified Performing Artists. Includein the total on line 30 yourperforming-arts-related expenses fromline 10 of Form 2106, Employee BusinessExpenses, or line 6 of Form 2106-EZ,Unreimbursed Employee BusinessExpenses. Enter the amount and QPAnext to line 30.

Forestation or ReforestationAmortization. If you can claim adeduction for amortization of these costs

and you do not have to file Schedule C,C-EZ, or F (Form 1040) for this activity,include your deduction in the total on line30. Enter the amount and Reforestationnext to line 30.

Repayment of Sub-Pay Under theTrade Act of 1974. If you repaidsupplemental unemployment benefits(sub-pay) that you previously reported inincome because you became eligible forpayments under the Trade Act of 1974,include in the total on line 30 the amountyou repaid in 1995. Enter the amount andSub-pay TRA next to line 30. Or, youmay be able to claim a credit against yourtax instead. Get Pub. 525 for more

details.Contributions to Section 501(c)(18)

Pension Plans. The amount youcontributed should be identified with codeH in box 13 of your W-2 form. You maydeduct this amount subject to the limitsexplained under Excess SalaryDeferrals on page 6. Include yourdeduction in the total on line 30. Enter theamount and 501(c)(18) next to line 30.

Deduction for Clean-Fuel Vehicles.If you placed a vehicle in service in 1995that uses a clean-burning fuel, you maybe able to take this deduction. Fordetails, get Pub. 535, BusinessExpenses. Include your deduction in the

total on line 30. But if part of yourdeduction is claimed on Schedule C,C-EZ, E, or F (Form 1040), subtract thatpart from your total deduction and includeonly the balance on line 30. Enter theamount and Clean-Fuel next to line 30.Line 31Adjusted Gross Income. Ifline 31 is less than zero, you may have anet operating loss that you can carry toanother tax year. If you carry the lossback to earlier years, see Form 1045,Application for Tentative Refund. Formore details, get Pub. 536, Net OperatingLosses.



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alive on December 31, 1995, do not useForm 8615 to figure the child's tax.

CreditsLine 40Credit for Child andDependent Care Expenses. You maybe able to take this credit if you paidsomeone to care for your child under age13 or your dependent who could not carefor himself or herself. But to do so, thecare must have been provided so that youcould work or look for work and you musthave had effectively connected incomefrom a job or through self-employment.

Use Form 2441 to figure the credit. Ifyou received any dependent care benefitsfor 1995, you must file Form 2441 tofigure the amount of benefits you canexclude from your income even if youcannot take the credit. For more details,including special rules for divorced orseparated parents, see the Instructionsfor Form 2441 and Pub. 503, Child andDependent Care Expenses.Line 41Foreign Tax Credit.Form1116 explains when you can take thiscredit for payment of income tax to aforeign country. To take it, you mustreport income from foreign sources. SeeForeign Income Taxed by the UnitedStates on page 5. You also must havepaid or owe foreign tax on that income.Also, get Pub. 514, Foreign Tax Credit forIndividuals.Line 42Other Credits. Complete line42 if you can take any of the followingcredits.

General Business Credit. If you havetwo or more of the following credits, acarryforward of any of these credits, or ifany of the credits (other than thelow-income housing credit) are from apassive activity, you must also completeForm 3800. Include on line 42 theamount from Form 3800 and check theForm 3800 box. If you don't have to fileForm 3800 and you have one of thesecredits, include on line 42 the amount ofthe credit. Check the Form (specify) boxand enter the form number for that credit.q Investment credit (Form 3468).q Jobs credit (Form 5884).q Credit for alcohol used as a fuel (Form6478).q Credit for increasing research activities(Form 6765).q Low-income housing credit (Form 8586,Form 8609, and Schedule A (Form

8609)).q Disabled access credit (Form 8826).q Enhanced oil recovery credit (Form8830).q Renewable electricity production credit(Form 8835).q Indian employment credit (Form 8845).q Credit for employer social security andMedicare taxes paid on certain employeetips (Form 8846).q Credit for contributions to selectedcommunity development corporations(Form 8847).

Deduction for Exemptions WorksheetLine 35 (keep for your records)See the instructions for line 35.

1. Multiply $2,500 by the total number of exemptions claimed onForm 1040NR, line 7e

2. Enter the amount from Form 1040NR, line 323. Enter $114,700 ($86,025 if you checked filing status

box 3, 4, or 5; $172,050 if you checked filing statusbox 6)

4. Subtract line 3 from line 2. If zero or less, stop here;enter the amount from line 1 above on Form 1040NR,line 35

Note: If line 4 is more than $122,500 (more than$61,250 if you checked filing status box 3, 4, or 5),stop here; you cannot take a deduction forexemptions. Enter -0- on Form 1040NR, line 35.

5. Divide line 4 by $2,500 ($1,250 if you checked filingstatus box 3, 4, or 5). If the result is not a wholenumber, round it up to the next higher whole number(for example, round 0.0004 to 1)

6. Multiply line 5 by 2% (.02) and enter the result as adecimal amount

7. Multiply line 1 by line 6

8. Deduction for exemptions. Subtract line 7 from line 1. Enter the resulthere and on Form 1040NR, line 35

1.

7.

8.

2.

3.

4.

5.

6.

Is the amount on Form 1040NR, line 32, more than the dollar amount shown on line 3 belowfor your filing status?

.

No. Stop. Multiply $2,500 by the total number of exemptions claimed on Form 1040NR, line7e, and enter the result on line 35.

Yes. Complete the worksheet below to figure your deduction for exemptions.

Empowerment Zone EmploymentCredit (Form 8844). Although this creditis part of the general business credit, it isnot reported on Form 3800. If you cantake this credit, check the Form(specify) box and enter the form number.

Mortgage Interest Credit (Form8396). If you were issued a mortgagecredit certificate by a state or localgovernment, get Form 8396 to see if you

can take this credit. If you can, check thebox for Form 8396.Credit for Prior Year Minimum Tax

(Form 8801). If you paid alternativeminimum tax in an earlier year, get Form8801 to see if you can take this credit. Ifyou can, check the box for Form 8801.

Qualified Electric Vehicle Credit(Form 8834). If you placed a new electricvehicle in service in 1995, get Form 8834to see if you can take this credit. If youcan, check the Form (specify) box andenter the form number.Line 43. If you sold fuel produced froma nonconventional source, see section 29to find out if you can take the

nonconventional source fuel credit. Ifyou can, attach a schedule showing howyou figured the credit. Include the creditin the total for line 43. Enter the amountand FNS next to line 43.

Other TaxesLine 45Alternative Minimum Tax.The tax law gives special treatment tosome kinds of income and allows specialdeductions and credits for some kinds ofexpenses. If you benefit from these

provisions, you may have to pay aminimum amount of tax through thealternative minimum tax. This tax isfigured on Form 6251 for individuals. Ifyou are filing for an estate or trust, getSchedule I (Form 1041) and itsinstructions to see if you owe this tax.

If you are claiming a net operating lossdeduction or the foreign tax credit, youmust complete Form 6251. Otherwise, to

see if you should complete Form 6251,add the amounts on Form 1040NR, lines33 and 35, plus the total of all adjustmentsand tax preference items that apply to you(see the list that begins below). If the totalis more than the dollar amount shownbelow that applies to you, fill in Form6251.q $33,750 if you checked filing status box1 or 2.q $22,500 if you checked filing status box3, 4, or 5.q $45,000 if you checked filing status box6.

Disposition of U.S. Real PropertyInterests. If you disposed of U.S. real

property interests at a gain, you mustmake a special computation to see if youowe this tax. For details, see theInstructions for Form 6251.

Adjustments and Preferences:1. Accelerated depreciation.2. Income from incentive stock options3. Tax-exempt interest from privateactivity bonds.4. Intangible drilling costs.5. Depletion.6. Circulation expenditures.7. Research and experimental costs.



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8. Mining exploration/developmentcosts.9. Pollution-control facilitiesamortization.10. Tax-shelter farm activity income or(loss).11. Passive activity income or (loss).12. Percentage-of-completion incomefrom long-term contracts.13. Installment sales income.Note: Form 6251 should be filled in for

a child under age 14 if the total of thechild's adjusted gross income from Form1040NR, line 32, exceeds the child'searned income by more than $1,000.Line 46Recapture Taxes. If you oweany of the following taxes, check thebox(es) and include the tax on line 46.

Recapture of Investment Credit. Ifyou disposed of investment creditproperty or changed its use before theend of its useful life or recovery period,you may owe this tax. See Form 4255 fordetails.

Recapture of Low-Income HousingCredit. If you disposed of property (orthere was a reduction in the qualified

basis of the property) on which you tookthe low-income housing credit, you mayowe this tax. See Form 8611 for details.

Recapture of Federal MortgageSubsidy. If you sold your home in 1995and it was financed (in whole or in part)from the proceeds of any tax-exemptqualified mortgage bond or you claimed

the mortgage interest credit, you may owethis tax. See Form 8828 for details.

Recapture of Qualified ElectricVehicle Credit. If you claimed this creditin 1993 or 1994 based on a vehicle thatno longer qualifies, get Pub. 535,Business Expenses, to see if you owe thistax. If you do, include the tax on line 46and write QEV next to the entry space.

Recapture of the Indian EmploymentCredit. If you owe this tax, include it online 46 and write 45A next to the entry

space.Line 48Social Security and MedicareTax on Tip Income Not Reported toEmployer. If you are subject to socialsecurity and Medicare tax, you receivedtips of $20 or more in any month, and youdid not report the full amount to youremployer, you must pay the socialsecurity and Medicare or railroadretirement (RRTA) tax on the unreportedtips. You must also pay this tax if yourW-2 form(s) shows allocated tips that youare including in your income on Form1040NR, line 8.

To figure the tax, get Form 4137,Social Security and Medicare Tax on

Unreported Tip Income. Enter the tax online 48. But to pay the RRTA tax, contactyour employer. Your employer will figureand collect the tax.Caution: You may be charged a penaltyequal to 50% of the social security andMedicare tax due on tips you received butdid not report to your employer.

Line 49Tax on Qualified RetirementPlans, Including IRAs. You may owethis tax if any of the following apply:1. You received any early distributionsfrom a qualified retirement plan (includingyour IRA), annuity, or modifiedendowment contract entered into afterJune 20, 1988.2. You made excess contributions toyour IRA.3. You were born before July 1, 1924,and did not take the minimum required

distribution from your qualified retirementplan.4. You received a distribution in excessof $150,000 from a qualified retirementplan.

If any of the above apply, get Form5329 and its instructions to see if you owethis tax and if you must file Form 5329.Enter the tax from Form 5329 on line 49.However, if only item 1 above applies toyou and distribution code 1 is shown inbox 7 of your Form 1099-R, you do nothave to file Form 5329. Instead, multiplythe taxable amount of the distribution by10% (.10) and enter the result on line 49.The taxable amount of the distribution is

the part of the distribution you reportedon line 16b or line 17b of Form 1040NRor on Form 4972. Also, enter No on thedotted line next to line 49 to indicate thatyou do not have to file Form 5329. But ifdistribution code 1 is incorrectly shown inbox 7, you must file Form 5329.Caution: Be sure to include on line 16bor line 17b of Form 1040NR or on Form4972, whichever applies, the taxable partof any early distributions you received.Line 50Transportation Tax.Nonresident alien individuals are subjectto a 4% tax on U.S. source grosstransportation income that is noteffectively connected with a U.S. trade orbusiness. However, the term U.S. sourcegross transportation income does notinclude any such income that is taxable ina possession of the United States underthe provisions of the Internal RevenueCode as applied to that possession.

For purposes of this tax, transportationincome will not be treated as effectivelyconnected with the conduct of a trade orbusiness in the United States unless:1. You had a fixed place of business inthe United States involved in the earningof transportation income, and2. Substantially all of your U.S. sourcegross transportation income wasattributable to regularly scheduledtransportation. Or, in the case of incomefrom the leasing of a vessel or aircraft, itwas attributable to a fixed place ofbusiness in the United States. Seesections 887 and 863 for rules, definitions,and exceptions.

You may be exempt from this taxbecause of a treaty or an exchange ofnotes between the United States and thecountry of which you are a resident. If thecountry of which you are a resident doesnot impose tax on the shipping or aircraftincome of U.S. persons, you may also be

Capital Gain Tax WorksheetLine 37 (keep for your records)

Use this worksheet to figure your tax only if (a) you are filing Schedule D and bothlines 17 and 18 of Schedule D are gains, or (b) you reported capital gain distributionsdirectly on Form 1040NR, line 14, and:

You checkedfiling status box:

3, 4, or 5 $47,1256 $94,250

Enter the amount from Form 1040NR, line 36

If you are filing Schedule D, enter the smaller ofSchedule D, line 17 or line 18. Otherwise, enter thecapital gain distributions reported on Form 1040NR,line 14

Subtract line 4 from line 1Enter $23,350 ($19,500 if you checked filing status box 3, 4, or 5;$39,000 if you checked filing status box 6)

Enter the greater of line 5 or line 6

Subtract line 7 from line 1

Figure the tax on the amount on line 7. Use the Tax Table or TaxRate Schedules, whichever applies

Multiply line 8 by 28% (.28)

Add lines 9 and 10

1 or 2 $56,550

ANDForm 1040NR,line 36, is over:

You checkedfiling status box: AND

Form 1040NR,line 36, is over:

1.

2.

3.

4.

5.6.

7.

8.

9.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Figure the tax on the amount on line 1. Use the Tax Table or TaxRate Schedules, whichever applies

Tax. Enter the smaller of line 11 or line 12 here and on Form 1040NR,line 37. Check the box for Capital Gain Tax Worksheet

10.

11.

If you are filing Form 4952, enter the amount fromForm 4952, line 4e

Subtract line 3 from line 2. If zero or less, stop here; you cannotuse this worksheet to figure your tax. Instead, use the Tax Table orTax Rate Schedules, whichever applies

13.13.

12.12.



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exempt from this tax. If you are exemptfrom the tax for one of these reasons, youmust attach a statement to Form 1040NRidentifying your country of residence andthe treaty, note, or law and provisionsunder which you claim exemption from thetax.

If you owe this tax, you must attach astatement to your return th

US Internal Revenue Service: i1040nr--1995

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