Check out some similar questions!

Jacob73 · Mar 22, 2012, 11:20 AM

Is there any difference between "US compensation of students" and "amounts received
From U.S. Sources to provide ordinary living expenses"?

Treaty treaty between the US and C.I.S. Countries says that certain "amounts received from U.S. Sources to provide ordinary living expenses" are exempt from taxes but university's payroll offices claims that they are different things. I am receiving Research assistantship and I think it is qualified exemption.

I have F-1 visa.

Please help.
Thanks

MukatA · Mar 22, 2012, 08:19 PM

Here is from publication 901. Tax Treaties
An individual who is a resident of a C.I.S. member and who is temporarily in the United States primarily to study at an educational or scientific research institution or to obtain training for qualification in a profession or specialty is exempt from U.S. income tax on amounts received as stipends, scholarships, or other substitute allowances necessary to provide ordinary living expenses. An individual is entitled to the benefit of this exemption for a maximum of 5 years and for less than $10,000 in each tax year.
An individual who is a resident of a C.I.S. member and who is temporarily in the United States primarily to acquire technical, professional, or commercial experience or perform technical services and who is an employee of, or under contract with, a resident of a C.I.S. member is exempt from U.S. income tax on the amounts received from that resident. Also exempt is an amount received from U.S. sources, of not more than $10,000, that is necessary to provide for ordinary living expenses. The exemption contained in this paragraph is limited to 1 year.

I am not sure if assistantship is exempt income as per para 1 but based on para 2, you can claim exemption of $10,000 for one year. Check with AtlantaTaxExpert.

Jacob73 · Mar 22, 2012, 08:38 PM

MukatA, thanks for your response.
I think I need to stick to your para# 1 because I am a student and in the original treaty (http://www.irs.gov/pub/irs-trty/ussr.pdf) that is what is said about the students (Article VI(1) d on pg 10).

In publication 901 (Rev 2011) there is a note #19 on page 53 that says "Also exempt are amounts up to $10,000 received from US sources to provide ordinary living expenses". "Also" here should mean, as I understand, a compensation other than allowances. This can be a compensation for work you perform as a research assistant. This assistantship is the only income I have and obviously that goes for my "ordinary living expences". Am I right?

All these definitions are a bit vague (the treaty was signed in 1975) and AtlantaTaxExpert's opinion would be really valuable.

MukatA · Mar 22, 2012, 08:59 PM

How is research assistantship reported by the University? Which Form and which box number?

Jacob73 · Mar 22, 2012, 09:33 PM

Form W-2, box 16 - State Wages, tips, etc.

MukatA · Mar 22, 2012, 11:24 PM

If box 1 is blank and you have amount in box 16 only, it means that your employer has assumed that the amount is exempt from federal taxes while you will report this on your state tax return.

Jacob73 · Mar 22, 2012, 11:28 PM

There is same amount in box 1 as in box 16. These are total of my compensation as an assistantship. Box 2 shows Federal tax withheld and Box 17 state taxes. These are the only boxes that are filled.

Jacob73 · Mar 26, 2012, 07:47 PM

Yeah, there are as many answers to it as many tax experts...
No clear cut unless somebody takes this issue in the court...