1999 Department of the Treasury Internal Revenue Service Instructions for Form 1040NR U.S. Nonresident Alien Income Tax Return Section references are to the Internal Revenue Code unless otherwise noted. General Instructions TIP For details on these and other changes, see Pub. 553 or see What's Hot at www.irs.gov. What's New for 1999? Simplified Procedure for Claming Certain Refunds You may be able to use this new procedure if you did not have any effectively connected income for the tax year and are completing Form 1040NR solely to claim a refund of U.S. tax withheld at source. See page 2 for details. Student Loan Interest Deduction If you paid interest on a qualified student loan, you may be able to deduct up to $1,500 of the interest on line 25.   See the instructions for line 25 on page 10 for details. Capital Gain Distributions You may not have to file Schedule D (Form 1040) just to report your capital gain distributions. See the instructions for line 14 on page 7. If you do not have to file Schedule D (Form 1040), be sure you check the box on line 14. Child Tax Credits If you have a dependent child (see the instructions for line 7c on page 6 for a list of filers who are allowed to claim a dependent on Form 1040NR) who was under age 17 at the end of 1999, you may be able to claim either or both of these credits: l  The Child Tax Credit l  The Additional Child Tax Credit The total of these credits can be as much as $500 for each qualifying child. To find out if you have a qualifying child, see the instructions for line 7c, column (4), on page 6.   Figure the child tax credit first. See the instructions for line 41 on page 11. If you have three or more qualifying children and you are not able to claim the full $500 child tax credit for each child, you may be able to claim the additional child tax credit. See the instructions for line 56 on page 13. The additional child tax credit is refundable; that is, it may give you a refund even if you do not owe any tax. Use Form 8812 to figure this credit. Self-Employed Health Insurance You may be able to deduct up to 60% of your health insurance.   See the instructions for line 28 on page 10. Did You Convert Part or All of an IRA to a Roth IRA in 1998? If you did and you chose to report the taxable amount over 4 years, you must report the amount that is taxable in 1999 on line 16b. See 1998 Roth IRA Conversions on page 8. IRA Deduction Allowed to More People Covered by Retirement Plans You may be able to take an IRA deduction if you were covered by a retirement plan and your modified adjusted gross income is less than the amount shown below that applies to you. l  $41,000 if you checked filing status box 1, 2, 3, 4, or 5. l  $61,000 if qualifying widow(er) (filing status box 6). See the instructions for line 24 on page 9. Business Standard Mileage Rate The rate for business use of a vehicle before April 1, 1999, is 32¹/2 cents a mile. The rate for business use of a vehicle after March 31, 1999, is 31 cents a mile. Photographs of Missing Children The IRS is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this booklet on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and, if in the United States, calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. What To Look for in 2000 Student Loan Interest Deduction.   You may be able to deduct up to $2,000 of the interest you pay on a qualified student loan. IRA Deduction Allowed to More People Covered by Retirement Plans.   You may be able to take an IRA deduction if you are covered by a retirement plan and your 2000 modified adjusted gross income is less than the amount shown below that applies to you. l  $42,000 if you checked filing status box 1, 2, 3, 4, or 5. l  $62,000 if qualifying widow(er) (filing status box 6). Items To Note Form 1040NR-EZ.   You may be able to use Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, if your only income from U.S. sources is wages, salaries, tips, taxable refunds of state and local income taxes, and scholarship or fellowship grants. Also, if married, you cannot claim an exemption for your spouse. For more details, see Form 1040NR-EZ and its instructions. Other Reporting Requirements.   If you meet the closer connection to a foreign country exception to the substantial presence test you must file Form 8840, Closer Connection Exception Statement for Aliens. If you exclude days of presence in the United States for purposes of the substantial presence test, you must file Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition. This rule does not apply to foreign-government-related individuals who exclude days of presence in the United States. Certain dual-resident taxpayers who claim tax treaty benefits must file Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b).   A dual-resident taxpayer is one who is a resident of both the United States and another country under each country's tax laws. Additional Information If you need more information, our free publications may help you. Pub. 519, U.S. Tax Guide for Aliens, will be the most important, but the following publications may also help. Pub. 525, Taxable and Nontaxable Income Pub. 529, Miscellaneous Deductions Pub. 552, Recordkeeping for Individuals Pub. 597, Information on the United States-Canada Income Tax Treaty Pub. 901, U.S. Tax Treaties Pub. 910, Guide to Free Tax Services (includes a list of all publications) These free publications and the forms and schedules you will need are available on request from the Internal Revenue Service. You may download them from the IRS Internet web site at www.irs.gov. Also see Taxpayer Assistance on page 18 for other ways to get them (as well as information on receiving IRS assistance in completing the forms). Resident Alien or Nonresident Alien If you are not a citizen of the United States, specific rules apply to determine if you are a resident alien or a nonresident alien for tax purposes. Generally, you are considered a resident alien if you meet either the green card test or the substantial presence test for 1999. If you do not meet either of these tests for 1999 but you meet the substantial presence test for 2000, you may be able to choose to be treated as a resident alien for part of 1999. But you must have been physically present in the United States for at least 31 days in a row Cat. No. 11368V