[shwarm]

How much income is exempted from 2008 Income taxes under Article 21 of the US-Italy Tax Treaty for an Italian mgmt. trainee who arrived in October, 2008 on a J1 visa working in the US for an international Hotel company here for a temporary 1 year assignment?

Is it $0 or all of his earnings? What number goes on line 21?

[MukatA]

As per the treaty there is no deduction on the income in the U.S.
Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

[shwarm]

As per the treaty there is no deduction on the income in the U.S.
Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

The Italian trainee came over with a French trainee under the same circumstances and to the same employer. The only difference is that one holds a French passport, the other an Italian passport.

It is my understanding that the Frenchman under the France-US Tax Treaty can exempt $5,000 from his income on line 8 of 1040NR and insert $5,000 on line 22.

From your answer, I gather that the Italian cannot exempt any income. So, line will include his entire W-2 income and line 22 is basically $0. Is that correct?

Is the above info correct for the Frenchman?

[shwarm]

The Italian trainee came over with a French trainee under the same circumstances and to the same employer. The only difference is that one holds a French passport, the other an Italian passport.

It is my understanding that the Frenchman under the France-US Tax Treaty can exempt $5,000 from his income on line 8 of 1040NR and insert $5,000 on line 22.

From your answer, I gather that the Italian cannot exempt any income. So, line 8 will include his entire W-2 income and line 22 is basically $0. Is that correct?

Is the above info correct for the Frenchman?

[MukatA]

Yes, France tax treaty has a deduction of $5000.
Go to Internal Revenue Service and read IRS Publication 901: Tax Treaties; page 20 for France and page 22 for Italy.