Resident Alien with Tax Treaty - How to File a Federal Tax Return
If you received treaty benefits while you were a resident alien, the income that falls under the treaty benefits does NOT have to be reported by you to the IRS on any forms, as long as you did not receive a tax form that reported that income.
However, if the income has been reported on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 when you file your federal tax return. For example, you would report any wage, salary, scholarship or fellowship income on line 7 of Form 1040 (in 2010). Then you would enter the amount for which treaty benefits are claimed in parentheses on Form 1040 in the "Other Income" line 21. Next to the amount write “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption. You can find this information on Form W-9 Treaty provided to you by the Tax Office on the FNIS website. On Form 1040, subtract this amount from your income to arrive at total income on Form 1040, line 22.
Attach to your tax return Form W-9Treaty. If you do not remember your username or password for the FNIS website, please contact the Tax Office.
For more information see IRS Publication 519.