[catfooj]

I'm a F1 student from China, I was on OPT and CPT in the year of 2009. 2009 is my fourth year in US. The US-China Tax Treaty says that the first $5,000 income is exempted from income tax. Where can I claim this? There is no place on Form 1040NR to put this $5,000 to decrease my taxable income. Thanks in advance.

[AtlantaTaxExpert]

You ARE still eligible for the $5,000 treay exemption while on OPT, because you are still considered to be a student. The exemption is listed on Line #22 of Form 1040NR, and you debit the $5,000 from the wage amount on Line #8.

In other words, if your wage amount on the W-2 is $35,000, you list only $30,000 on Line #8.

Same logic applies when transferring the amount from Schedule C to Line #13, though the IRS may give you some problems there (I am currently appealing just that issue with a client's tax return).

[catfooj]

Thanks so much for the answer. Is it necessary for my boss to reissue W-2 for me? If so, what forms do we need to file?

[AtlantaTaxExpert]

No need to re-issue the W-2. All calculations are done on the Form 1040NR.

[catfooj]

AtlantaTaxExpert,

Thank you so much for taking time to reply my post. It is huge help.

I saw some other discussing saying to attach form 8833, so the tax payer can put $(5,000) in Other Income Line to decrease the total income. Can I also do my tax return in this way? Or this only applies to the tax payers who are already resident aliens for tax purpose?

I was just thinking if I directly debit the $5,000 on Line 8, the total wages on Line 8 will not match the W-2s I attached. Is it going to be an issue?

[AtlantaTaxExpert]

Putting the negative $5,000 on Line 21 of Form 1040 (with Form 8833) applies only to those who are resident alien who still qualify for the treaty exemption.

The entry on Line #22 of Form 1040NR will account for the $5,000 difference between your Line #8 entry and W-2 amount.