Credits

Line 43 - Foreign tax credit.   If you paid income tax to a foreign country, you may be able to take this credit. But only if you:

1. Report income from foreign sources (see Foreign Income Taxed by the United States on page 6) and
2. Have paid or owe foreign tax on that income.

Generally, you must complete and attach Form 1116 to take this credit.

Exception.   You do not have to complete Form 1116 to take this credit if all five of the following apply.

1. Form 1040NR is being filed for a nonresident alien individual and not an estate or trust.
2. All of your gross foreign-source income is from interest and dividends and all of that income and the foreign tax paid on it is reported to you on Form 1099-INT or Form 1099-DIV (or substitute statement).
3. If you have dividend income from shares of stock, you held those shares for at least 16 days.
4. The total of your foreign taxes is not more than $300.
5. All of your foreign taxes were:

• Legally owed and not eligible for a refund and
• Paid to countries that are recognized by the United States and do not support terrorism.

Note:   If you need more information about these requirements, see the Instructions for Form 1116.

If you meet all five requirements, enter on line 43 the smaller of your total foreign taxes or the amount on Form 1040NR, line 40. If you do not meet all five requirements, see Form 1116 to find out if you can take the credit.

Line 44 - Credit for child and dependent care expenses.   You may be able to take this credit if you paid someone to care for your child under age 13 or your dependent or spouse who could not care for himself or herself. For details, see Form 2441.

Line 45 - Retirement savings contributions credit.   You may be able to take this credit if you made:

• Contributions to a traditional or Roth IRA.
• Elective deferrals to a 401(k), 403(b), 457, SEP, or SIMPLE plan.
• Voluntary contributions to a qualified retirement plan.
• Voluntary contributions to a 501(c)(18) plan.

However, you cannot take the credit if any of the following apply.

• The amount on Form 1040NR, line 35, is more than $25,000.
• You were under age 18 at the end of 2002.
• You were claimed as a dependent on someone's (such as your parent's) 2002 tax return.
• You were a student (defined below).

You were a student if during any 5 months of 2002 you:

• Were enrolled as a full-time student at a school or
• Took a full-time, on-farm training course given by a school or a state, county, or local government agency.

A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or night schools.

For more details, see Form 8880.

Line 46 - Child tax credit.  

What is the Child Tax Credit?   This credit is for people who have a qualifying child as defined in the instructions for line 7c, column (4), on page 8. It is in addition to the credit for child and dependent care expenses on Form 1040NR, line 44.

Important: Make sure you checked the box in column (4) of line 7c on Form 1040NR for each qualifying child.

How Do You Figure the Credit?   Answer the questions in the Who Must Use Pub. 972 chart on this page to see if you may use the Child Tax Credit Worksheet below or if you must use Pub. 972.

Line 47 - Adoption credit.   You may be able to take this credit if you paid expenses to adopt a child. See Form 8839 for details.

Line 48.   Include in the total on line 48 any of the following credits and check the appropriate box(es). To find out if you can take the credit, see the form indicated.

• Mortgage interest credit. If a state or local government gave you a mortgage credit certificate, see Form 8396.
• District of Columbia first-time homebuyer credit, see Form 8859.

Line 49 - Other credits.   Include in the total on line 49 any of the following credits and check the appropriate box(es). If box c is checked, also enter the form number, if applicable. To find out if you can take the credit, see the form or publication indicated.

• Credit for prior year minimum tax. If you paid alternative minimum tax in a prior year, see Form 8801.
• Qualified electric vehicle credit. If you placed a new electric vehicle in service in 2002, see Form 8834.
• General business credit. This credit consists of a number of credits that usually apply only to individuals who are partners, self-employed, or who have rental property. See Form 3800 or Pub. 334.
• Empowerment zone and renewal community employment credit. See Form 8844.
• New York Liberty Zone business employee credit. See Form 8884.
• Nonconventional source fuel credit. If you sold fuel produced from a nonconventional source, see section 29 to find out if you can take this credit. Attach a schedule showing how you figured the credit. Check box c and enter FNS on the line to the right of box c.

Other Taxes

Line 53 - Social security and Medicare tax on tip income not reported to employer.   If you are subject to social security and Medicare tax, you received tips of $20 or more in any month, and you did not report the full amount to your employer, you must pay the social security and Medicare or railroad retirement (RRTA) tax on the unreported tips. You must also pay this tax if your W-2 form(s) shows allocated tips that you are including in your income on Form 1040NR, line 8.

To figure the tax, use Form 4137. To pay the RRTA tax, contact your employer. Your employer will figure and collect the tax.

You may be charged a penalty equal to 50% of the social security and Medicare tax due on tips you received but did not report to your employer.

Line 54 - Tax on qualified plans, including IRAs, and other tax-favored accounts.   If any of the following apply, see Form 5329 and its instructions to find out if you owe this tax and if you must file Form 5329.

1. You received any early distributions from (a) an IRA or other qualified retirement plan, (b) an annuity, or (c) a modified endowment contract entered into after June 20, 1988.
2. Excess contributions were made to your IRAs, Coverdell education savings accounts (ESAs), or Archer MSAs.
3. You received taxable distributions from Coverdell ESAs or qualified tuition programs.
4. You were born before July 2, 1931, and did not take the minimum required distribution from your IRA or other qualified retirement plan.

Exception. If only item 1 applies to you and distribution code 1 is correctly shown in box 7 of your Form 1099-R, you do not have to file Form 5329. Instead, multiply the taxable amount of the distribution by 10% (.10) and enter the result on line 54. The taxable amount of the distribution is the part of the distribution you reported on line 16b or line 17b of Form 1040NR or on Form 4972. Also, enter No on the dotted line next to line 54 to indicate that you do not have to file Form 5329. But if distribution code 1 is incorrectly shown in box 7 of Form 1099-R, you must file Form 5329.

Line 55 - Transportation tax.   Nonresident alien individuals are subject to a 4% tax on U.S. source gross transportation income that is not effectively connected with a U.S. trade or business. However, the term U.S. source gross transportation income does not include any such income that is taxable in a possession of the United States under the provisions of the Internal Revenue Code as applied to that possession.

For purposes of this tax, transportation income will be treated as not effectively connected with the conduct of a trade or business in the United States unless:

1. You had a fixed place of business in the United States involved in the earning of transportation income and
2. At least 90% of your U.S. source gross transportation income was attributable to regularly scheduled transportation. Or, in the case of income from the leasing of a vessel or aircraft, it was attributable to a fixed place of business in the United States. See sections 887 and 863 for rules, definitions, and exceptions.

You may be exempt from this tax because of a treaty or an exchange of notes between the United States and the country of which you are a resident. If the country of which you are a resident does not impose tax on the shipping or aircraft income of U.S. persons, you may also be exempt from this tax. If you are exempt from the tax for one of these reasons, you must attach a statement to Form 1040NR identifying your country of residence and the treaty, note, or law and provisions under which you claim exemption from the tax.

If you owe this tax, you must attach a statement to your return that includes the information described in Pub. 519.

Line 56 - Household employment taxes.   If any of the following apply, see Schedule H (Form 1040) and its instructions to find out if you owe these taxes.

1. You paid any one household employee (defined below) cash wages of $1,300 or more in 2002. Cash wages include wages paid by checks, money orders, etc.
2. You withheld Federal income tax during 2002 at the request of any household employee.
3. You paid total cash wages of $1,000 or more in any calendar quarter of 2001 or 2002 to household employees.

For purposes of item 1, do not count amounts paid to an employee who was under age 18 at any time in 2002 and was a student.

Household Employee. Any person who does household work is a household employee if you can control what will be done and how it will be done. Household work includes work done in or around your home by babysitters, nannies, health aides, maids, yard workers, and similar domestic workers.

Line 57 - Total tax.   Include in the total on line 57 any of the following taxes. To find out if you owe the tax, see the form or publication indicated. On the dotted line next to line 57, enter the amount of the tax and identify it as indicated.

Recapture of the Following Credits.  

• Investment credit (see Form 4255). Identify as ICR.
• Low-income housing credit (see Form 8611). Identify as LIHCR.
• Qualified electric vehicle credit (see Pub. 535). Identify as QEVCR.
• Indian employment credit. Identify as IECR.
• New markets credit (see Form 8874). Identify as NMCR.

Recapture of Federal Mortgage Subsidy.   If you sold your home in 2002 and it was financed (in whole or in part) from the proceeds of any tax-exempt qualified mortgage bond or you claimed the mortgage interest credit, see Form 8828. Identify as FMSR.

Section 72(m)(5) Excess Benefits Tax   (see Pub. 560). Identify as Sec. 72(m)(5).

Uncollected Social Security and Medicare or RRTA Tax on Tips or Group-Term Life Insurance.   This tax should be shown in box 12 of your Form W-2 with codes A and B or M and N. Identify as UT.

Golden Parachute Payments.   If you received an excess parachute payment (EPP), you must pay a 20% tax on it. This tax should be shown in box 12 of your W-2 form with code K. If you received a Form 1099-MISC, the tax is 20% of the EPP shown in box 13. Identify as EPP.

Tax on Accumulation Distribution of Trusts.   Enter the amount from Form 4970 and identify as ADT.

Payments

Line 58 - Federal income tax withheld.   Enter all Federal income tax withheld on your effectively connected income from Forms W-2 and 1099-R. The amount withheld should be shown in box 2 of Form W-2 and in box 4 of Form 1099-R. If line 58 includes amounts withheld as shown on Form 1099-R, attach the Form 1099-R to the front of your return. Also, include in the total for line 58 any tax withheld on scholarship or fellowship grants from Form 1042-S, box 7.

If you received a 2002 Form 1099 showing Federal income tax withheld on dividends, interest income, or other income you received, include the amount withheld in the total on line 58. This should be shown in box 4 of the 1099 form.

Do not include on line 58 amounts withheld on income not effectively connected with a U.S. trade or business. Those amounts should be reported in column (a) on page 4. They are then carried over to line 65 on page 2.

Line 59 - 2002 estimated tax payments.   Enter any estimated Federal income tax payments you made using Form 1040-ES (NR) for 2002. Include any overpayment from your 2001 return that you applied to your 2002 estimated tax.

Name Change. If you changed your name because of marriage, divorce, etc., and you made estimated tax payments using your former name, attach a statement to the front of Form 1040NR. On the statement, list all of the payments you made in 2002 and show the name(s) and identifying number(s) under which you made them.

Line 60 - Excess social security and tier 1 RRTA tax withheld.   If you had more than one employer for 2002 and total wages of more than $84,900, too much social security or tier 1 railroad retirement (RRTA) tax may have been withheld. You can take a credit on this line for the amount withheld in excess of $5,263.80. But if any one employer withheld more than $5,263.80, you must ask that employer to refund the excess to you. You cannot claim it on your return.

You cannot claim a refund for excess tier 2 RRTA tax on Form 1040NR. Instead, use Form 843.

For more details, see Pub. 505.

Line 61 - Additional child tax credit.   This credit is for certain people who have at least one qualifying child as defined in the instructions for line 7c, column (4), on page 8. The additional child tax credit may give you a refund even if you do not owe any tax.

To take the credit:

1. Be sure you figured the amount, if any, of your child tax credit. See the instructions for line 46 on page 17.
2. Read the TIP at the end of your Child Tax Credit Worksheet. Use Form 8812 to see if you can take the additional child tax credit, but only if you meet the conditions given in that TIP.

Line 62 - Amount paid with Form 4868 (Request for Extension).   If you filed Form 4868 to get an automatic extension of time to file Form 1040NR, enter any amount you paid with that form. Also, include any amount paid with Form 2688.

Line 63 - Other payments.   Check the box(es) on line 63 to report any credit from Form 2439, 4136, or 8885.

Line 64 - Credit for amount paid with Form 1040-C.   Enter any amount you paid with Form 1040-C for 2002.

Line 65 - U.S. tax withheld at source.   Enter on line 65 the amount you show on page 4, line 84. Be sure to attach a copy of all Form(s) 1042-S, SSA-1042S, RRB-1042S, or similar form(s).

Lines 66a and 66b - U.S. tax withheld at source by partnerships under section 1446.   Enter on line 66a any tax withheld by a partnership shown on Form(s) 8805. Enter on line 66b any tax withheld by a partnership shown on Form(s) 1042-S. Be sure to attach a copy of all Form(s) 8805 and 1042-S.

Lines 67a and 67b - U.S. tax withheld on dispositions of U.S. real property interests.   Enter on line 67a any tax withheld on dispositions of U.S. real property interests from Form(s) 8288-A. Enter on line 67b any tax withheld on dispositions of U.S. real property interests from Form(s) 1042-S. Be sure to attach a copy of all Form(s) 8288-A and 1042-S.

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