2003 HTML Instructions for Form 1040NR,

This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Name, Address, and Identifying Number

Name. If you are filing Form 1040NR for an estate or trust, enter the name of the estate or trust, and your name, title, and address. Also, give the name and address of any U.S. grantors and beneficiaries.

P.O. box. Enter your box number only if your post office does not deliver mail to your home.

Foreign address. Enter the information in the following order: City, province or state, and country. Follow the country's practice for entering the postal code. Do not abbreviate the country name.

Identifying number. If you are an individual, you are generally required to enter your social security number (SSN). To apply for an SSN, get
Form SS-5 from a Social Security Administration (SSA) office or, if in the United States, you may call the SSA at 1-800-772-1213. Fill in Form SS-5 and return it to the SSA.

If you do not have and are not eligible to get an SSN, you must apply for an individual taxpayer identification number (ITIN). For details on how to do so, see Form W-7 and its instructions. It usually takes about 4-6 weeks to get an ITIN.

If you already have an ITIN, enter it wherever your SSN is requested on your tax return. If you are required to include another person's SSN on your return and that person does not have and cannot get an SSN, enter that person's ITIN.

Note:

An ITIN is for tax use only. It does not entitle you to social security benefits or change your employment or immigration status under U.S. law.

If you are filing Form 1040NR for an estate or trust, enter the employer identification number of the estate or trust.

An incorrect or missing identifying number may increase your tax or reduce your refund.

Filing Status

The amount of your tax depends on your filing status. Before you decide which box to check, read the following explanations.

Were you single or married? If you were married on December 31, consider yourself married for the whole year. If you were single, divorced, or legally separated under a decree of divorce or separate maintenance on December 31, consider yourself single for the whole year. If you meet the tests described under Married persons who live apart below, you may consider yourself single for the whole year.

If your spouse died in 2003, consider yourself married to that spouse for the whole year, unless you remarried before the end of 2003.

Married persons who live apart. Some married persons who have a child and who do not live with their spouse may file as single. If you meet all five of the following tests and you are a married resident of Canada or Mexico, or you are a married U.S. national, check the box on line 1. If you meet the tests and you are a married resident of Japan or the Republic of Korea (South Korea), check the box on line 2.

You file a return separate from your spouse.
You paid more than half of the cost to keep up your home in 2003.
You lived apart from your spouse during the last 6 months of 2003.
Your home was the main home of your child, stepchild, foster child, or adopted child for more than half of 2003.
You are able to claim a dependency exemption for the child or the child's other parent claims him or her as a dependent under the rules in Pub. 501 for children of divorced or separated parents.

Line 6—Qualifying widow(er) with dependent child. You may check the box on line 6 if all seven of the following apply.

You were a resident of Canada, Mexico, Japan, or the Republic of Korea (South Korea), or were a U.S. national.
Your spouse died in 2001 or 2002 and you did not remarry in 2003.
You have a child, stepchild, adopted child, or foster child for whom you can claim a dependency exemption.
This child lived in your home for all of 2003. Temporary absences, such as for school, vacation, or medical care, count as time lived in the home.
You paid over half of the cost of keeping up your home.
You were a resident alien or U.S. citizen the year your spouse died. This refers to your actual status, not the election that some nonresident aliens can make to be taxed as U.S. residents.
You were entitled to file a joint return with your spouse the year he or she died, even if you did not actually do so.

Exemptions

Exemptions for estates and trusts are described in the instructions for line 37 beginning on page 15.

Note:

Residents of India who were students or business apprentices may be able to claim exemptions for their spouse and dependents. See Pub. 519 for details.

Line 7b—Spouse. If you checked filing status box 3 or 4, you can take an exemption for your spouse only if your spouse had no gross income for U.S. tax purposes and cannot be claimed as a dependent on another U.S. taxpayer's return. (You can do this even if your spouse died in 2003.) In addition, if you checked filing status box 4, your spouse must have lived with you in the United States at some time during 2003. Finally, your spouse must have an SSN or an ITIN. If your spouse is not eligible to obtain an SSN, he or she must apply for an ITIN. See Identifying number on page 7 for additional information.

Line 7c—Dependents. Only U.S. nationals and residents of Canada, Mexico, Japan, and the Republic of Korea (South Korea), may claim exemptions for their dependents. If you were a U.S. national (American Samoan or a Northern Mariana Islander who chose to be a U.S. national) or a resident of Canada or Mexico, you can claim exemptions for your children and other dependents on the same terms as U.S. citizens. See Pub. 501 for more details. Be sure to complete item I on page 5 of the form. If you were a resident of Japan or the Republic of Korea (South Korea), you may claim an exemption for any of your children who lived with you in the United States at some time during 2003.

You can take an exemption for each of your dependents. If you have more than four dependents, attach a statement to your return with the required information.

Children Who Did Not Live With You Due to Divorce or Separation. If you checked filing status box 1 or 3 and are claiming as a dependent a child who did not live with you under the rules explained in Pub. 501 for children of divorced or separated parents, attach Form 8332 or similar statement to your return. But see the Exception below.

If your divorce decree or separation agreement went into effect after 1984, you may attach certain pages from the decree or agreement instead of
Form 8332. To be able to do this, the decree or agreement must state:

You can claim the child as your dependent without regard to any condition, such as payment of support, and
The other parent will not claim the child as a dependent, and
The years for which the claim is released.

Attach the following pages from the decree or agreement:
- Cover page (including the other parent's SSN on that page), and
- The pages that include all of the information identified in 1 through 3 above, and
- Signature page with the other parent's signature and date of agreement.

Note:

You must attach the required information even if you filed it in an earlier year.

Exception. You do not have to attach Form 8332 or similar statement if your divorce decree or written separation agreement went into effect before 1985 and it states that you can claim this child as your dependent.

Other Dependent Children. Include the total number of children who did not live with you for reasons other than divorce or separation on the line labeled “Dependents on 7c not entered above.”

Line 7c, Column (2). You must enter each dependent's identifying number (SSN, ITIN, or adoption taxpayer identification number (ATIN)). If you do not enter the correct identifying number, at the time we process your return we may disallow the exemption claimed for the dependent and reduce or disallow any other tax benefits (such as the child tax credit) based on the dependent.

For details on how your dependent can get an identifying number, see Identifying number on page 7.

If your dependent child was born and died in 2003 and you do not have an identifying number for the child, you may attach a copy of the child's birth certificate instead and enter “Died” in column (2).

Adoption Taxpayer Identification Numbers (ATINs). If you have a dependent who was placed with you by an authorized placement agency and you do not know his or her SSN, you must get an ATIN for the dependent from the IRS. An authorized placement agency includes any person authorized by state law to place children for legal adoption. See Form W-7A for details.

Line 7c, Column (4). Check the box in this column if your dependent is a qualifying child for the child tax credit (defined below). If you have at least one qualifying child, you may be able to take the child tax credit on line 45 and the additional child tax credit on line 60.

Qualifying Child for Child Tax Credit. A qualifying child for purposes of the child tax credit is a child who:

Is claimed as your dependent on
line 7c, and
Was under age 17 at the end of 2003, and
Is your (a) son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild); (b) brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew), whom you cared for as you would your own child; or (c) foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child), and
Is a U.S. citizen or resident alien.

An adopted child is always treated as your own child. An adopted child includes a child placed with you by an authorized placement agency for legal adoption even if the adoption is not final. An authorized placement agency includes any person or court authorized by state law to place children for legal adoption.

Child Tax Credit Worksheet—Line 45
(keep for your records)

		To be a qualifying child for the child tax credit, the child must be under age 17 at the end of 2003 and meet the other requirements listed in the instructions for line 45 on this page. Do not use this worksheet if you answered “Yes” to question 1 or 2 in Who Must Use Pub. 972 above. Instead, use Pub. 972.
1.	Number of qualifying children: X $1,000. Enter the result		1.
2.	Enter the amount, if any, of your advance child tax credit payment (before offset)		2.
3.	Is line 1 less than or equal to line 2? Yes.STOP. You cannot take this credit. If line 2 is more than line 1, you do not have to pay back the difference. No. Subtract line 2 from line 1			3.
4.	Enter the amount from Form 1040NR, line 41		4.
5.	Enter the total of the amounts from Form 1040NR, lines 42 through 44		5.
6.	Are the amounts on lines 4 and 5 the same? Yes.STOP. You cannot take this credit because there is no tax to reduce. However, you may be able to take the additional child tax credit. See the TIP below. No. Subtract line 5 from line 4			6.
7.	Is the amount on line 3 more than the amount on line 6? Yes. Enter the amount from line 6. Also, you may be able to take the additional child tax credit. See the TIP below. No. Enter the amount from line 3			7.
	This is your child tax credit. Enter this amount on Form 1040NR, line 45.
TIP: You may be able to take the additional child tax credit on Form 1040NR, line 60, if you answered “Yes” on line 6 or 7 above. First, complete your Form 1040NR through line 59. Then, use Form 8812 to figure any additional child tax credit.

Rounding Off to Whole Dollars

You may round off cents to whole dollars on your return and schedules. If you do round to whole dollars, you must round all amounts. To round, drop amounts under 50 cents and increase amounts from 50 to 99 cents to the next dollar. For example, $1.39 becomes $1 and $2.50 becomes $3.

If you have to add two or more amounts to figure the amount to enter on a line, include cents when adding the amounts and round off only the total.

Income Effectively Connected With U.S. Trade or Business

Pub. 519 explains how income is classified and what income you should report here. The instructions for this section assume you have decided that the income involved is effectively connected with a U.S. trade or business in which you were engaged. But your decision may not be easy. “Interest,” for example, may be effectively connected with a U.S. trade or business, it may not be, or it may be tax-exempt. The tax status of income also depends on its source. Under some circumstances, items of income from foreign sources are treated as effectively connected with a U.S. trade or business. Other items are reportable as effectively connected or not effectively connected with a U.S. trade or business, depending on how you elect to treat them.

Line 8—Wages, salaries, tips, etc. Enter the total of your effectively connected wages, salaries, tips, etc. For most people, the amount to enter on this line should be shown in box 1 of their Form(s) W-2. However, do not include on line 8 amounts exempted under a tax treaty. Instead, include these amounts on line 22 and complete item M on page 5 of Form 1040NR.

Also include on line 8:

Wages received as a household employee for which you did not receive a Form W-2 because your employer paid you less than $1,400 in 2003. Also, enter “HSH” and the amount not reported on a Form W-2 on the dotted line next to line 8.
Tip income you did not report to your employer. Also include allocated tips shown on your Form(s) W-2 unless you can prove that you received less. Allocated tips should be shown in box 8 of your Form(s) W-2. They are not included as income in box 1. See
Pub. 531 for more details.

You may owe social security and Medicare tax on unreported or allocated tips. See the instructions for line 52 on page 19.
Dependent care benefits, which should be shown in box 10 of your Form(s) W-2. But first complete Form 2441 to see if you may exclude part or all of the benefits.
Employer-provided adoption benefits, which should be shown in
box 12 of your Form(s) W-2 with code T. You may also be able to exclude amounts if you adopted a child with special needs and the adoption became final in 2003. See the Instructions for Form 8839 to find out if you may exclude part or all of the benefits.
Excess salary deferrals. The amount deferred should be shown in box 12 of your Form W-2 and the “Retirement plan” box in box 13 should be checked. If the total amount you deferred for 2003 under all plans was more than $12,000 (excluding catch-up contributions as explained below), include the excess on line 8. This limit is increased to $15,000 for section 403(b) plans, if you qualify for the 15-year rule in Pub. 571.

A higher limit may apply to participants in section 457(b) deferred compensation plans for the 3 years before retirement age. Contact your plan administrator for more information.

Catch-up contributions. If you were age 50 or older at the end of 2003, your employer may have allowed an additional deferral of up to $2,000 ($1,000 for SIMPLE plans). This additional deferral amount is not subject to the overall limit on elective deferrals.

You may not deduct the amount deferred. It is not included as income in box 1 of your Form W-2.
Disability pensions shown on
Form 1099-R if you have not reached the minimum retirement age set by your employer. Disability pensions received after you reach that age and other payments shown on Form 1099-R (other than payments from an IRA*) are reported on lines 17a and 17b. Payments from an IRA are reported on lines 16a and 16b.
Corrective distributions shown on Form 1099-R of (a) excess salary deferrals plus earnings and (b) excess contributions plus earnings to a retirement plan. But do not include distributions from an IRA* on line 8. Instead, report distributions from an IRA on lines 16a and 16b.

*This includes a Roth, SEP, or SIMPLE IRA.

Missing or Incorrect Form W-2. Your employer is required to provide or send Form W-2 to you no later than February 2, 2004. If you do not receive it by early February, ask your employer for it. Even if you do not get a Form W-2, you must still report your earnings on line 8. If you lose your Form W-2 or it is incorrect, ask your employer for a new one.

Line 9a—Taxable interest. Report on line 9a all of your taxable interest income from assets effectively connected with a U.S. trade or business.

If you received interest not effectively connected with a U.S. trade or business, report it on page 4 of
Form 1040NR, unless it is tax exempt under a treaty and the withholding agent did not withhold tax on the payment. See Pub. 901 for a quick reference guide to the provisions of U.S. tax treaties. In addition, interest from a U.S. bank, savings and loan association, credit union, or similar institution, and from certain deposits with U.S. insurance companies, is tax exempt to a nonresident alien if it is not effectively connected with a U.S. trade or business.

Interest credited in 2003 on deposits that you could not withdraw because of the bankruptcy or insolvency of the financial institution may not have to be included in your 2003 income. For details, see Pub. 550.

Line 9b—Tax-exempt interest. Certain types of interest income from investments in state and municipal bonds and similar instruments are not taxed by the United States. If you received such tax-exempt interest income, report the amount on line 9b. Include any exempt-interest dividends from a mutual fund or other regulated investment company. Do not include interest earned on your IRA or Coverdell education savings account. Also do not include interest from a U.S. bank, savings and loan association, credit union, or similar institution (or from certain deposits with U.S. insurance companies) that is exempt from tax under a tax treaty or under section 871(i) because the interest is not effectively connected with a U.S. trade or business.

Line 10a—Ordinary dividends. Enter your total ordinary dividends from assets effectively connected with a U.S. trade or business. Each payer should send you a Form 1099-DIV.

Capital Gain Distributions. If you received any capital gain distributions, see the instructions for line 14a on page 11.

Nontaxable Distributions. Some distributions are nontaxable because they are a return of your cost (or other basis). They will not be taxed until you recover your cost (or other basis). You must reduce your cost (or other basis) by these distributions. After you get back all of your cost (or other basis), you must report these distributions as capital gains on Schedule D
(Form 1040). For details, see Pub. 550.

Dividends on insurance policies are a partial return of the premiums you paid. Do not report them as dividends. Include them in income only if they exceed the total of all net premiums you paid for the contract.

Line 10b—Qualified dividends. Enter your total qualified dividends on line 10b. Qualified dividends are eligible for a lower tax rate than other ordinary income. Generally, these dividends are shown in box 1b of your Form(s) 1099-DIV. See Pub. 550 for the definition of qualified dividends if you received dividends not reported on Form 1099-DIV.

Exception. Some dividends may be reported as qualified dividends in box 1b of Form 1099-DIV but are not qualified dividends. These include:

Dividends you received as a nominee. See Chapter 1 in Pub. 550.
Dividends you received on any share of stock that you held for less than 61 days during the 120-day period that began 60 days before the ex-dividend date. The ex-dividend date is the first date following the declaration of a dividend on which the purchaser of a stock is not entitled to receive the next dividend payment. When counting the number of days you held the stock, include the day you disposed of the stock but not the day you acquired it. See the examples below.
Dividends attributable to periods totaling more than 366 days that you received on any share of preferred stock held for less than 91 days during the 180-day period that began 90 days before the ex-dividend date. Preferred dividends attributable to periods totaling less than 367 days are subject to the 61-day holding period rule above.
Dividends on any share of stock to the extent that you are under an obligation (including a short sale) to make related payments with respect to positions in substantially similar or related property.
Payments in lieu of dividends, but only if you know or have reason to know that the payments are not qualified dividends.

Example 1. You bought 5,000 shares of XYZ Corp. common stock on July 1, 2003. XYZ Corp. paid a cash dividend of 10 cents per share. The ex-dividend date was July 9, 2003. Your Form 1099-DIV from XYZ Corp. shows $500 in box 1a (ordinary dividends) and in box 1b (qualified dividends). However, you sold the 5,000 shares on August 4, 2003. You held your shares of XYZ Corp. for only 34 days of the 120-day period (from July 2, 2003, through August 4, 2003). The 120-day period began on May 10, 2003 (60 days before the ex-dividend date), and ended on September 6, 2003. You have no qualified dividends from XYZ Corp. because you held the XYZ stock for less than 61 days.

Example 2. Assume the same facts as in Example 1 except that you bought the stock on July 8, 2003 (the day before the ex-dividend date), and you sold the stock on September 9, 2003. You held the stock for 63 days (from July 9, 2003, through September 9, 2003). However, you have no qualified dividends from XYZ Corp. because you held the stock for only 60 days of the 120-day period (from July 9, 2003, through September 6, 2003).

Example 3. You bought 10,000 shares of ABC Mutual Fund common stock on July 1, 2003. ABC Mutual Fund paid a cash dividend of 10 cents a share. The ex-dividend date was July 9, 2003. The ABC Mutual Fund advises you that the portion of the dividend eligible to be treated as qualified dividends equals 2 cents per share. Your Form 1099-DIV from ABC Mutual Fund shows total ordinary dividends of $1,000 and qualified dividends of $200. However, you sold the 10,000 shares on August 4, 2003. You have no qualified dividends from ABC Mutual Fund because you held the ABC Mutual Fund stock for less than 61 days.

Be sure you use Schedule D or the Qualified Dividends and Capital Gain Tax Worksheet, whichever applies, to figure your tax. Your tax may be less. See the instructions for line 39 on page 16 for details.

Line 11—Taxable refunds, credits, or offsets of state and local income taxes. If you received a refund, credit, or offset of state or local income taxes in 2003, you may receive a Form 1099-G. If you chose to apply part or all of the refund to your 2003 estimated state or local income tax, the amount applied is treated as received in 2003.

For details on how to figure the amount you must report as income, see Recoveries in Pub. 525.

Line 12—Scholarship and fellowship grants. If you received a scholarship or fellowship, part or all of it may be taxable.

If you were a degree candidate, the amounts you used for expenses other than tuition and course-related expenses (fees, books, supplies, and equipment) are generally taxable. For example, amounts used for room, board, and travel are generally taxable.

If you were not a degree candidate, the full amount of the scholarship or fellowship is generally taxable. Also, amounts received in the form of a scholarship or fellowship that are payment for teaching, research, or other services are generally taxable as wages even if the services were required to get the grant.

If the grant was reported on
Form(s) 1042-S, you must generally include the amount shown in box 2 of Form(s) 1042-S on line 12. However, if any or all of that amount is exempt by treaty, do not include the treaty-exempt amount on line 12. Instead, include the treaty-exempt amount on line 22 and complete item M on page 5 of Form 1040NR.

Attach any Form(s) 1042-S you received from the college or institution. If you did not receive a Form 1042-S, attach a statement from the college or institution (on their letterhead) showing the details of the grant.

For more information about scholarships and fellowships in general, see Pub. 970.

Example 1. You are a citizen of a country that has not negotiated a tax treaty with the United States. You are a candidate for a degree at ABC University (located in the United States). You are receiving a full scholarship from ABC University. The total amounts you received from ABC University during 2003 are as follows:

	Tuition and fees	$25,000
	Books, supplies, and equipment	1,000
	Room and board	9,000
		$35,000

The Form 1042-S you received from ABC University for 2003 shows $9,000 in box 2 and $1,260 (14% of $9,000) in box 7.

Note:

Box 2 shows only $9,000 because withholding agents (such as ABC University) are not required to report section 117 amounts (tuition, fees, books, supplies, and equipment) on Form 1042-S.

When completing Form 1040NR:

Enter on line 12 the $9,000 shown in box 2 of Form 1042-S.
Enter $0 on line 31. Because
section 117 amounts (tuition, fees, books, supplies, and equipment) were not included in box 2 of your Form 1042-S (and are not included on line 12 of Form 1040NR), you cannot exclude any of the section 117 amounts on line 31.
Include on line 57 the $1,260 shown in box 7 of Form 1042-S.

Example 2. The facts are the same as in Example 1 except that you are a citizen of a country that has negotiated a tax treaty with the United States and you were a resident of that country immediately before leaving for the United States to attend ABC University. Also, assume that, under the terms of the tax treaty, all of your scholarship income is exempt from tax because ABC University is a nonprofit educational organization.

Note:

Many tax treaties do not permit an exemption from tax on scholarship or fellowship grant income unless the income is from sources outside the United States. If you are a resident of a treaty country, you must know the terms of the tax treaty between the United States and the treaty country to claim treaty benefits on Form 1040NR. See the instructions for item M on page 26 for details.

When completing Form 1040NR:

Be sure you have entered your home country and permanent address in the space provided on page 1.
Enter $0 on line 12. The $9,000 reported to you in box 2 of
Form 1042-S is reported on line 22 (not line 12).
Enter $9,000 on line 22.
Enter $0 on line 31. Because none of the $9,000 reported to you in box 2 of Form 1042-S is included in your income, you cannot exclude it on
line 31.
Include on line 57 any withholding shown in box 7 of Form 1042-S.
Provide all the required information in item M on page 5.

Line 13—Business income or (loss). If you operated a business or practiced your profession as a sole proprietor, report your effectively connected income and expenses on Schedule C or Schedule C-EZ (Form 1040).

Include any income you received as a dealer in stocks, securities, and commodities through your U.S. office. If you dealt in these items through an independent agent, such as a U.S. broker, custodian, or commissioned agent, your income may not be considered effectively connected with a U.S. business.

Line 14a—Capital gain or (loss). If you had effectively connected capital gains or losses, including any effectively connected capital gain distributions, you must complete and attach Schedule D (Form 1040). But see the Exception below. Enter the effectively connected gain or (loss) from Schedule D (Form 1040) on line 14a.

Gains and losses from disposing of U.S. real property interests are reported on Schedule D (Form 1040) and included on line 14a of Form 1040NR. See Dispositions of U.S. Real Property Interests on page 6.

Exception. You do not have to file Schedule D (Form 1040) if both of the following apply.

The only amounts you have to report on Schedule D (Form 1040) are effectively connected capital gain distributions from box 2a of Form(s) 1099-DIV or substitute statements and post-May 5 capital gain distributions from box 2b.
None of the Forms 1099-DIV or substitute statements have an amount in box 2c (qualified 5-year gain), box 2d (unrecaptured section 1250 gain), box 2e (section 1202 gain), or box 2f (collectibles (28%) gain).

If both of the above apply, enter your effectively connected capital gain distributions (from box 2a of Form(s) 1099-DIV) on line 14a and check the box on that line. If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on line 14a only the amount that belongs to you. Attach a statement showing the full amount you received and the amount you received as a nominee. See Chapter 1 of Pub. 550 for filing requirements for Forms 1099-DIV and 1096.

If you do not have to file Schedule D, be sure you use the Qualified Dividends and Capital Gain Tax Worksheet on page 17 to figure your tax. Your tax may be less if you use this worksheet.

Line 14b—Post-May 5 capital gain distributions. If you checked the box on line 14a because you are not required to file Schedule D, enter your total post-May 5 capital gain distributions on line 14b. This amount should be shown in box 2b of your Form(s) 1099-DIV or substitute statements. Reduce your total post-May 5 capital gain distributions by any post-May 5 capital gain distributions you received as a nominee (see the instructions for line 14a).

Line 15—Other gains or (losses). If you sold or exchanged assets used in a U.S. trade or business, see the Instructions for Form 4797.

Lines 16a and 16b—IRA distributions. You should receive a Form 1099-R showing the amount of any distribution from your individual retirement arrangement (IRA). Unless otherwise noted in the line 16a and 16b instructions, an IRA includes a traditional IRA, Roth IRA, simplified employee pension (SEP) IRA, and a savings incentive match plan for employees (SIMPLE) IRA. Except as provided below, leave line 16a blank and enter the total distribution on
line 16b.

Exception 1. Enter the total distribution on line 16a if you rolled over part or all of the distribution from one:

IRA to another IRA of the same type (for example, from one traditional IRA to another traditional IRA), or
SEP or SIMPLE IRA to a traditional IRA.

Also, put “Rollover” next to line 16b. If the total distribution was rolled over, enter zero on line 16b. If the total distribution was not rolled over, enter the part not rolled over on line 16b unless Exception 2 applies to the part not rolled over.

If you rolled over the distribution (a) in 2004 or (b) from an IRA into a qualified plan (other than an IRA), attach a statement explaining what you did.

Exception 2. If any of the following apply, enter the total distribution on
line 16a and use Form 8606 and its instructions to figure the amount to enter on line 16b.

You received a distribution from an IRA (other than a Roth IRA) and you made nondeductible contributions to any of your traditional or SEP IRAs for 2003 or an earlier year. If you made nondeductible contributions to these IRAs for 2003, also see Pub. 590.
You received a distribution from a Roth IRA. But if either 1 or 2 below applies, enter -0- on line 16b; you do not have to see Form 8606 or its instructions.
1. Distribution code T is shown in box 7 of your Form 1099-R and you made a contribution (including a conversion) to a Roth IRA for 1998.
2. Distribution code Q is shown in box 7 of your Form 1099-R.
You converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2003.
You had a 2002 or 2003 IRA contribution returned to you, with the related earnings or less any loss, by the due date (including extensions) of your tax return for that year.
You made excess contributions to your IRA for an earlier year and had them returned to you in 2003.
You recharacterized part or all of a contribution to a Roth IRA as a traditional IRA contribution, or vice versa.

Note:

If you received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line 16b. Enter the total amount of those distributions on line 16a.

You may have to pay an additional tax if (a) you received an early distribution from your IRA and the total was not rolled over or (b) you were born before July 1, 1932, and received less than the minimum required distribution from your traditional, SEP, and SIMPLE IRAs. See the instructions for line 53 on page 19 for details.

Lines 17a and 17b—Pensions and annuities. Use lines 17a and 17b to report effectively connected pension and annuity payments you received. You should receive a Form 1099-R showing the amount you received. For details on rollovers and lump-sum distributions, see page 13. But if this income is not effectively connected with your U.S. trade or business, report it on line 79.

Simplified Method Worksheet—Lines 17a and 17b
(keep for your records)

Before you begin: If you are the beneficiary of a deceased employee or former employee who died before August 21, 1996, see Pub. 939 to find out if you are entitled to a death benefit exclusion of up to $5,000. If you are, include the exclusion in the amount entered on line 2 below.
Note: If you had more than one partially taxable pension or annuity, figure the taxable part of each separately. Enter the total of the taxable parts on Form 1040NR, line 17b. Enter the total pension or annuity payments received in 2003 on Form 1040NR, line 17a.
1.	Enter the total pension or annuity payments received in 2003. Also, enter this amount on Form 1040NR, line 17a			1.
2.	Enter your cost in the plan at the annuity starting date		2.
3.	Enter the appropriate number from Table 1 below. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, enter the appropriate number from Table 2 below		3.
4.	Divide line 2 by line 3		4.
5.	Multiply line 4 by the number of months for which this year's payments were made. If your annuity starting date was before 1987, skip lines 6 and 7 and enter this amount on line 8. Otherwise, go to line 6		5.
6.	Enter the amount, if any, recovered tax free in years after 1986		6.
7.	Subtract line 6 from line 2		7.
8.	Enter the smaller of line 5 or line 7			8.
9.	Taxable amount. Subtract line 8 from line 1. Enter the result, but not less than zero. Also, enter this amount on Form 1040NR, line 17b. If your Form 1099-R shows a larger amount, use the amount on this line instead of the amount from Form 1099-R			9.

Table 1 for Line 3 Above
IF the age at annuity starting date (see page 13) was . . .		AND your annuity starting date was—
		before November 19, 1996, enter on line 3 . . .	after November 18, 1996, enter on line 3 . . .
55 or under		300	360
56–60		260	310
61–65		240	260
66–70		170	210
71 or older		120	160
Table 2 for Line 3 Above
IF the combined ages at annuity starting date (see page 13) were . . .			THEN enter on line 3 . . .
110 or under			410
111–120			360
121–130			310
131–140			260
141 or older			210

Do not include the following payments on lines 17a and 17b. Instead, report them on line 8.

Disability pensions received before you reach the minimum retirement age set by your employer.
Corrective distributions of excess salary deferrals or excess contributions to retirement plans.

If you received a Form 1099-R that shows Federal income tax withheld, attach it to Form 1040NR.

Some annuities are tax-exempt. See Chapter 3 of Pub. 519.

Note:

If you perform services in the United States, your income is generally effectively connected with the conduct of a U.S. trade or business. (See section 864 and Regulations
section 1.864-2 for details and exceptions.) When you receive a pension in a later year as a result of effectively connected services, the pension is also considered effectively connected with the conduct of a U.S. trade or business.

Fully Taxable Pensions and Annuities. If your pension or annuity is fully taxable, enter it on line 17b; do not make an entry on line 17a. Your payments are fully taxable if (a) you did not contribute to the cost (defined on page 13) of your pension or annuity or (b) you got your entire cost back tax free before 2003.

If you received a Form RRB-1099-R, see Pub. 575 for information on how to report your benefits.

Partially Taxable Pensions and Annuities. Enter the total pension or annuity payments you received in 2003 on line 17a. If your Form 1099-R does not show the taxable amount, you must use the General Rule explained in
Pub. 939 to figure the taxable part to enter on line 17b. But if your annuity starting date (defined below) was after July 1, 1986, see Simplified Method below to find out if you must use that method to figure the taxable part.

You can ask the IRS to figure the taxable part for you for a $90 fee. For details, see Pub. 939.

If your Form 1099-R shows a taxable amount, you may report that amount on line 17b. But you may be able to report a lower taxable amount by using the General Rule or the Simplified Method.

Annuity Starting Date. Your annuity starting date is the later of the first day of the first period for which you received a payment, or the date the plan's obligations became fixed.

Simplified Method. You must use the Simplified Method if (a) your annuity starting date (defined above) was after July 1, 1986, and you used this method last year to figure the taxable part or (b) your annuity starting date was after November 18, 1996, and both of the following apply.

The payments are from a qualified employee plan, a qualified employee annuity, or a tax-sheltered annuity.
On your annuity starting date, either you were under age 75 or the number of years of guaranteed payments was fewer than 5. See Pub. 575 for the definition of guaranteed payments.

If you must use the Simplified Method, complete the worksheet on page 12 to figure the taxable part of your pension or annuity. For more details on the Simplified Method, see Pub. 575.

Age (or Combined Ages) at Annuity Starting Date. If you are the retiree, use your age on the annuity starting date. If you are the survivor of a retiree, use the retiree's age on his or her annuity starting date. But if your annuity starting date was after 1997 and the payments are for your life and that of your beneficiary, use your combined ages on the annuity starting date.

If you are the beneficiary of an employee who died, see Pub. 575. If there is more than one beneficiary, see Pub. 575 to figure each beneficiary's taxable amount.

Cost. Your cost is generally your net investment in the plan as of the annuity starting date. It does not include pre-tax contributions. Your net investment should be shown in box 9b of Form 1099-R for the first year you received payments from the plan.

Rollovers. A rollover is a tax-free distribution of cash or other assets from one retirement plan that is contributed to another plan. Use lines 17a and 17b to report a rollover, including a direct rollover, from one qualified employer's plan to another or to an IRA or SEP.

Enter on line 17a the total distribution before income tax or other deductions were withheld. This amount should be shown in box 1 of
Form 1099-R. From the total on
line 17a, subtract any contributions (usually shown in box 5) that were taxable to you when made. From that result, subtract the amount that was rolled over. Enter the remaining amount, even if zero, on line 17b. Write “Rollover” next to line 17b.

Special rules apply to partial rollovers of property. For more details on rollovers, including distributions under qualified domestic relations orders, see Pub. 575.

Lump-Sum Distributions. If you received a lump-sum distribution from a profit-sharing or retirement plan, your Form 1099-R should have the “Total distribution” box in box 2b checked. You may owe an additional tax if you received an early distribution from a qualified retirement plan and the total amount was not rolled over. For details, see the instructions for line 53 on
page 19.

Enter the total distribution on
line 17a and the taxable part on
line 17b.

You may be able to pay less tax on the distribution if you were born before January 2, 1936, you meet certain other conditions, and you choose to use Form 4972 to figure the tax on any part of the distribution. You may also be able to use Form 4972 if you are the beneficiary of a deceased employee who was born before January 2, 1936. For details, see Form 4972.

Line 20—Unemployment compensation. You should receive a Form 1099-G showing the total unemployment compensation paid to you in 2003.

If you received an overpayment of unemployment compensation in 2003 and you repaid any of it in 2003, subtract the amount you repaid from the total amount you received. Enter the result on line 20. Also, enter “Repaid” and the amount you repaid on the dotted line next to line 20. If, in 2003, you repaid unemployment compensation that you included in gross income in an earlier year, you may deduct the amount repaid on Schedule A (Form 1040NR), line 11. But if you repaid more than $3,000, see Repayments in Pub. 525 for details on how to report the repayment.

Line 21—Other income. Use this line to report any other income effectively connected with your U.S. business that is not reported elsewhere on your return or other schedules. List the type and amount of income. If necessary, show the required information on an attached statement. For more details, see Miscellaneous Income in
Pub. 525.

Taxable distributions from a Coverdell education savings account (ESA). Distributions from a Coverdell ESA may be taxable if (a) they are more than the qualified education expenses of the designated beneficiary in 2003 and (b) they were not included in a qualified rollover. See Pub. 970. Include these taxable distributions on line 21.

You may have to pay an additional tax if you received a taxable distribution from a Coverdell ESA. See the Instructions for Form 5329.

Qualified tuition program earnings. You must generally include this type of income on line 21. However, you may be able to exclude part or all of the earnings from income if (a) the qualified tuition program was established and maintained by a state (or agency or instrumentality of the state) and (b) any part of the distribution was used to pay qualified higher education expenses. Also, you may be able to exclude part or all of the earnings from income if they were included in a qualified rollover. See Pub. 970.

You may have to pay an additional tax if you received qualified tuition program earnings that are included on line 21. See the Instructions for Form 5329.

Report other income on page 4 of Form 1040NR if not effectively connected with a U.S. trade or business.

Line 22. Use line 22 to report your total effectively connected income that is exempt from tax by a tax treaty. Do not include this exempt income on line 23. Also, you must complete item M on page 5 of Form 1040NR.

Adjusted Gross Income

Line 24—Educator expenses. If you were an eligible educator in 2003, you can deduct up to $250 of qualified expenses you paid in 2003. An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.

Qualified expenses include ordinary and necessary expenses paid in connection with books, supplies, equipment (including computer equipment, software, and services), and other materials used in the classroom. An ordinary expense is one that is common and accepted in your educational field. A necessary expense is one that is helpful and appropriate for your profession as an educator. An expense does not have to be required to be considered necessary.

Qualified expenses do not include expenses for home schooling or for nonathletic supplies for courses in health or physical education. You must reduce your qualified expenses by the following amounts.

Excludable U.S. series EE and I savings bond interest from Form 8815.
Nontaxable qualified state tuition program earnings.
Nontaxable earnings from Coverdell education savings accounts.
Any reimbursements you received for these expenses that were not reported to you in box 1 of your Form W-2.

Line 25—IRA deduction.

If you made any nondeductible contributions to a traditional individual retirement arrangement (IRA) for 2003, you must report them on Form 8606.

If you made contributions to a traditional IRA for 2003, you may be able to take an IRA deduction. But you must have had earned income to do so. A statement should be sent to you by June 1, 2004, that shows all contributions to your traditional IRA for 2003.

Were You Covered by a Retirement Plan? If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc.) at work or through self-employment, your IRA deduction may be reduced or eliminated. But you can still make contributions to an IRA even if you cannot deduct them. In any case, the income earned on your IRA contributions is not taxed until it is paid to you.

The “Retirement plan” box in box 13 of your Form W-2 should be checked if you were covered by a plan at work even if you were not vested in the plan. You are also covered by a plan if you were self-employed and had a SEP, SIMPLE, or qualified retirement plan.

If you were covered by a retirement plan and you file Form 8815 or you exclude employer-provided adoption benefits, see Pub. 590 to figure the amount, if any, of your IRA deduction.

Special rule for married individuals. If you checked filing status box 3, 4, or 5 and you were not covered by a retirement plan but your spouse was, you are considered covered by a plan unless you lived apart from your spouse for all of 2003.

See Pub. 590 for more details.

Line 26—Student loan interest deduction. You may take this deduction only if all four of the following apply.

You paid interest in 2003 on a qualified student loan (see below).
You checked filing status box 1, 2, or 6.
Your modified adjusted gross income (AGI) is less than $65,000. Use lines 2 through 4 of the worksheet on this page to figure your modified AGI.
You are not claimed as a dependent on someone else's (such as your parent's) 2003 tax return.

Use the worksheet on this page to figure your student loan interest deduction.

Student Loan Interest Deduction Worksheet—Line 26
(keep for your records)

Before you begin: Complete Form 1040NR, lines 27 through 31, if they apply to you. Figure any amount to be entered on the dotted line next to line 32 (see the instructions for line 32 on page 15). See the instructions for line 26 on this page.
1.	Enter the total interest you paid in 2003 on qualified student loans (defined below). Do not enter more than $2,500		1.
2.	Enter the amount from Form 1040NR, line 23	2.
3.	Enter the total of the amounts from Form 1040NR, line 24, line 25, and lines 27 through 31, plus any amount you entered on the dotted line next to line 32	3.
4.	Subtract line 3 from line 2	4.
5.	Is line 4 more than $50,000?
	□ No. Skip lines 5 and 6, enter -0- on line 7, and go to line 8.
	□ Yes. Subtract $50,000 from line 4	5.
6.	Divide line 5 by $15,000. Enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000		6.	.
7.	Multiply line 1 by line 6		7.
8.	Student loan interest deduction. Subtract line 7 from line 1. Enter the result here and on Form 1040NR, line 26. Do not include this amount in figuring any other deduction on your return (such as on Schedule A (Form 1040NR), Schedule C (Form 1040), Schedule E (Form 1040), etc.)		8.

Qualified student loan. This is any loan you took out to pay the qualified higher education expenses for yourself, your spouse, or anyone who was your dependent when the loan was taken out. The person for whom the expenses were paid must have been an eligible student (see below). However, a loan is not a qualified student loan if (a) any of the proceeds were used for other purposes or (b) the loan was from either a related person or a person who borrowed the proceeds under a qualified employer plan or a contract purchased under such a plan. To find out who is a related person, see Pub. 970.

Qualified higher education expenses generally include tuition, fees, room and board, and related expenses such as books and supplies. The expenses must be for education in a degree, certificate, or similar program at an eligible educational institution. An eligible educational institution includes most colleges, universities, and certain vocational schools. You must reduce the expenses by the following benefits.

Employer-provided educational assistance benefits that are not included in box 1 of your Form(s) W-2.
Excludable U.S. series EE and I savings bond interest from Form 8815.
Nontaxable qualified state tuition program earnings.
Nontaxable earnings from Coverdell education savings accounts.
Any scholarship, educational assistance allowance, or other payment (but not gifts, inheritances, etc.) excluded from income.

For more details on these expenses, see Pub. 970.

An eligible student is a person who:

Was enrolled in a degree, certificate, or other program (including a program of study abroad that was approved for credit by the institution at which the student was enrolled) leading to a recognized educational credential at an eligible educational institution and
Carried at least half the normal full-time workload for the course of study he or she was pursuing.

Line 27—Moving expenses. Employees and self-employed persons (including partners) can deduct certain moving expenses. The move must be in connection with employment that generates effectively connected income.

If you moved in connection with your job or business or started a new job, you may be able to take this deduction. But your new workplace must be at least 50 miles farther from your old home than your old home was from your old workplace. If you had no former workplace, your new workplace must be at least 50 miles from your old home. The deduction is generally limited to moves to or within the United States or its possessions. If you meet these requirements, see Pub. 521. Use Form 3903 to figure the amount to enter on this line.

Line 28—Self-employed health insurance deduction. If you were self-employed and had a net profit for the year, you may be able to deduct the amount you paid for health insurance for yourself, your spouse, and your dependents. The insurance plan must be established under your business. But if you were also eligible to participate in any subsidized health plan maintained by your or your spouse's employer for any month or part of a month in 2003, amounts paid for health insurance coverage for that month cannot be used to figure the deduction. For example, if you were eligible to participate in a subsidized health plan maintained by your spouse's employer from September 30 through December 31, you cannot use amounts paid for health insurance coverage for September through December to figure your deduction. For more details, see Pub. 535.

Self-Employed Health Insurance Deduction Worksheet—Line 28
(keep for your records)

Before you begin: Complete Form 1040NR, line 29, if it applies to you. If, during 2003, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient, see the Note in the first column above. Be sure you have read the Exception above to see if you can use this worksheet instead of Pub. 535 to figure your deduction.
1.	Enter the total amount paid in 2003 for health insurance coverage established under your business for 2003 for you, your spouse, and dependents. But do not include amounts for any month you were eligible to participate in an employer-sponsored health plan	1.
2.	Enter your net profit and any other earned income* from the business under which the insurance plan is established, minus any deduction you claim on Form 1040NR, line 29	2.
3.	Self-employed health insurance deduction. Enter the smaller of line 1 or line 2 here and on Form 1040NR, line 28	3.
Earned income includes net earnings and gains from the sale, transfer, or licensing of property you created. It does not include capital gain income.*

Note:

If, during 2003, you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, or Pension Benefit Guaranty Corporation (PBGC) pension recipient, you must complete Form 8885 before completing the worksheet below. When figuring the amount to enter on line 1 of the worksheet below, do not include any health coverage tax credit advance payments shown in box 1 of Form 1099-H. Also, subtract the amount shown on line 4 of Form 8885 (reduced by any advance payments shown on line 6 of that form) from the total insurance premiums you paid.

If you qualify to take the deduction, use the worksheet on this page to figure the amount you can deduct.

Exception. Use Pub. 535 instead of the worksheet below to find out how to figure your deduction if either of the following applies.

You had more than one source of income subject to self-employment tax.
You are using amounts paid for qualified long-term care insurance to figure the deduction.

Line 29—Self-employed SEP, SIMPLE, and qualified plans. If you were self-employed or a partner, you may be able to take this deduction. See Pub. 560 or, if you were a minister, Pub. 517.

Line 30—Penalty on early withdrawal of savings. The
Form 1099-INT or Form 1099-OID you received will show the amount of any penalty you were charged.

Line 31—Scholarship and fellowship grants excluded. If you received a scholarship or fellowship grant and were a degree candidate, enter amounts used for tuition and course-related expenses (fees, books, supplies, and equipment), but only to the extent the amounts are included on line 12. See the examples in the instructions for line 12 on page 10.

Line 32. Include in the total on line 32 any of the following adjustments that are related to your effectively connected income. To find out if you can take the deduction, see the form or publication indicated. On the dotted line next to line 32, enter the amount of your deduction and identify it as indicated.

Archer MSA deduction (see Form 8853). Identify as “MSA.”
Deduction for clean-fuel vehicles (see Pub. 535). Identify as “Clean-Fuel.”
Performing-arts-related expenses (see Form 2106 or 2106-EZ). Identify as “QPA.”
Reforestation amortization (see
Pub. 535). Identify as “RFST.”
Repayment of supplemental unemployment benefits under the Trade Act of 1974 (see Pub. 525). Identify as “Sub-Pay TRA.”
Contributions to section 501(c)(18)(D) pension plans (see Pub. 525). Identify as “501(c)(18)(D).”
Contributions by certain chaplains to section 403(b) plans (see Pub. 517). Identify as “403(b).”

Line 33—Adjusted gross income. If line 33 is less than zero, you may have a net operating loss that you can carry to another tax year. See Form 1045 and its instructions for details.

Tax Computation on Income Effectively Connected With A U.S. Trade or Business

Line 35—Itemized deductions. Enter the total itemized deductions from
line 17 of Schedule A on page 3 of the form.

Note:

Residents of India who were students or business apprentices may be able to take the standard deduction instead of their itemized deductions. See Pub. 519 for details.

Line 37—Deduction for exemptions. You can claim exemptions only to the extent of your income that is effectively connected with a U.S. trade or business.

Individuals. If you are a nonresident alien individual, multiply $3,050 by the total number of exemptions entered on line 7d. (If you were a resident of Japan or the Republic of Korea (South Korea), you must figure the exemptions for your spouse and children according to the proportion your U.S. income bears to your total income. You must also complete item I on page 5 of the form. (For details, see Pub. 519.) But use the worksheet on page 16 to figure the amount, if any, to enter on line 37 if your adjusted gross income from line 34 is more than $139,500 if you checked filing status box 1 or 2; $104,625 if you checked filing status box 3, 4, or 5; $209,250 if you checked filing status box 6.

Estates. If you are filing for an estate, enter $600 on line 37.

Trusts. If you are filing for a trust whose governing instrument requires it to distribute all of its income currently, enter $300 on line 37. If you are filing for a qualified disability trust (defined in section 642(b)(2)(C)(ii)), enter $3,050 on line 37. But if the qualified disability trust's modified AGI (determined under section 67(e) without regard to section 642(b)) is more than $139,500, use the worksheet on page 16 to figure the amount to enter on line 37. If you are filing for any other trust, enter $100 on line 37.

Deduction for Exemptions Worksheet—Line 37
See the instructions for line 37 on page 15.
(keep for your records)

Caution: If you are filing for a qualified disability trust (on page 15), use this worksheet only if the trust's modified AGI* is more than $139,500. Also, skip line 1, enter $3,050 on line 2, enter the trust's modified AGI on line 3, and enter $139,500 on line 4.
1.	Is the amount on Form 1040NR, line 34, more than the amount shown on line 4 below for your filing status?
	□ No. Stop. Multiply $3,050 by the total number of exemptions claimed on Form 1040NR, line 7d, and enter the result on line 37.
	□ Yes. Go to line 2.
2.	Multiply $3,050 by the total number of exemptions claimed on Form 1040NR, line 7d		2.
3.	Enter the amount from Form 1040NR, line 34	3.
4.	Enter the amount shown below for the filing status box you checked on page 1 of Form 1040NR:
	Box 1 or 2, enter $139,500 Box 3, 4, or 5, enter $104,625 Box 6, enter $209,250	4.
5.	Subtract line 4 from line 3. If the result is more than $122,500 ($61,250 if you checked filing status box 3, 4, or 5), stop here. You cannot take a deduction for exemptions.	5.

6.	Divide line 5 by $2,500 ($1,250 if you checked filing status box 3, 4, or 5). If the result is not a whole number, increase it to the next higher whole number (for example, increase 0.0004 to 1)	6.
7.	Multiply line 6 by 2% (.02) and enter the result as a decimal		7.	.
8.	Multiply line 2 by line 7		8.
9.	Deduction for exemptions. Subtract line 8 from line 2. Enter the result here and on Form 1040NR, line 37		9.
*Figure the trust's modified AGI by applying section 67(e) without regard to section 642(b).

A qualified disability trust must enter “Section 642(b)(2)(C)” on the dotted line next to line 37.

Line 39—Tax. Use one of the following methods to figure your tax. Also, include in the total on line 39 any tax from Forms 8814 and 4972. Be sure to check the appropriate box(es).

Tax Table or Tax Rate Schedules. If you are filing for an estate or trust, use the Tax Rate Schedules on page 41.

Individuals. If your taxable income (line 38) is less than $100,000, you must use the Tax Table, which starts on page 29, to figure your tax. Be sure you use the correct column. If you checked filing status box 3, 4, or 5, you must use the Married filing separately column. If your taxable income is $100,000 or more, use the Tax Rate Schedules on page 41.

Exception. Do not use the Tax Table or Tax Rate Schedules to figure your tax if either of the following applies.

You are required to figure your tax using Form 8615, Schedule D (Form 1040), or the Qualified Dividends and Capital Gain Tax Worksheet on page 17.
You use Schedule J (Form 1040) (for farm income) to figure your tax.

Form 8615. You must generally use Form 8615 to figure the tax for any child who was under age 14 at the end of 2003, and who had more than $1,500 of investment income, such as taxable interest, ordinary dividends, or capital gains (including capital gain distributions), that is effectively connected with a U.S. trade or business. But if neither of the child's parents was alive on December 31, 2003, do not use Form 8615 to figure the child's tax.

Also, a child born on January 1, 1990, is considered to be age 14 at the end of 2003. Do not use Form 8615 for such a child.

Schedule D (Form 1040). Use Part IV of Schedule D to figure your tax if you are required to file Schedule D and (a) you had a net capital gain (both lines 16 and 17a of Schedule D are gains) or (b) you have qualified dividends on Form 1040NR, line 10b.

Qualified Dividends and Capital Gain Tax Worksheet. If you received qualified dividends or capital gain distributions but you are not required to file Schedule D (Form 1040), use the worksheet on page 17 to figure your tax.

Schedule J (Form 1040). If you had income from farming, your tax may be less if you choose to figure it using income averaging on Schedule J.

Line 40—Alternative minimum tax. The tax law gives special treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. If you benefit from these provisions, you may have to pay a minimum amount of tax through the alternative minimum tax. This tax is figured on Form 6251for individuals. If you are filing for an estate or trust, see Schedule I (Form 1041) and its instructions to find out if you owe this tax.

If you have any of the adjustments or preferences from the list below or you are claiming a net operating loss deduction or the foreign tax credit, you must complete Form 6251. Otherwise, to see if you should complete
Form 6251, add the amount on line 36 of Form 1040NR to the amounts on lines 3 and 15 of Schedule A (Form 1040NR). If the total is more than the dollar amount shown below that applies to you, fill in Form 6251.

$40,250 if you checked filing status box 1 or 2.
$29,000 if you checked filing status box 3, 4, or 5.
$58,000 if you checked filing status box 6.

Disposition of U.S. real property interests. If you disposed of a U.S. real property interest at a gain, you must make a special computation to see if you owe this tax. For details, see the Instructions for Form 6251.

Adjustments and Preferences:

Accelerated depreciation.
Stock by exercising an incentive stock option and you did not dispose of the stock in the same year.
Tax-exempt interest from private activity bonds.
Intangible drilling, circulation, research, experimental, or mining costs.
Amortization of pollution-control facilities or depletion.
Income or (loss) from tax-shelter farm activities or passive activities.
Income from long-term contracts not figured using the percentage-of-completion method.
Alternative minimum tax adjustments from an estate, trust, electing large partnership, or cooperative.
Section 1202 exclusion.

Qualified Dividends and Capital Gain Tax Worksheet—Line 39
(keep for your records)

Before you begin: Be sure you do not have to file Schedule D (Form 1040) (see the instructions for Form 1040NR, line 14a, on page 11). If you have capital gain distributions, be sure you checked the box on line 14a of Form 1040NR.
1.	Enter the amount from Form 1040NR, line 38		1.
2.	Enter the amount from Form 1040NR, line 10b	2.
3.	Enter the amount from Form 1040NR, line 14a	3.
4.	Add lines 2 and 3		4.
5.	Subtract line 4 from line 1. If zero or less, enter -0-		5.
6.	Enter the smaller of:
	The amount on line 1 or $28,400 if you checked filing status box 1, 2, 3, 4, or 5; or $56,800 if you checked filing status box 6		6.
7.	Is the amount on line 5 equal to or more than the amount on line 6?
	□ Yes. Skip lines 7 through 13; go to line 14 and check the “No” box. □ No. Enter the amount from line 5		7.
8.	Subtract line 7 from line 6		8.
9.	Add Form 1040NR, line 14b, and line 2 above	9.
10.	Enter the smaller of line 8 or line 9		10.
11.	Multiply line 10 by 5% (.05)			11.
12.	Subtract line 10 from line 8, if zero or less, go to line 14		12.
13.	Multiply line 12 by 10% (.10)			13.
14.	Are the amounts on lines 4 and 8 the same?
	□ Yes. Skip lines 14 through 23; go to line 24.
	□ No. Enter the smaller of line 1 or line 4		14.
15.	Enter the amount from line 8 (if line 8 is blank, enter -0-)		15.
16.	Subtract line 15 from line 14		16.
17.	Add Form 1040NR, line 14b and line 2 above	17.
18.	Enter the amount from line 10 (if line 10 is blank, enter -0-)	18.
19.	Subtract line 18 from line 17	19.
20.	Enter the smaller of line 16 or line 19		20.
21.	Multiply line 20 by 15% (.15)			21.
22.	Subtract line 20 from line 16. If zero, go to line 24.		22.
23.	Multiply line 22 by 20% (.20)			23.
24.	Figure the tax on the amount on line 5. Use the Tax Table or Tax Rate Schedules, whichever applies			24.
25.	Add lines 11, 13, 21, 23, and 24			25.
26.	Figure the tax on the amount on line 1. Use the Tax Table or Tax Rate Schedules, whichever applies			26.
27.	Tax on all taxable income. Enter the smaller of line 25 or line 26 here and on Form 1040NR, line 39			27.

Form 6251 should be filled in for a child who was under age 14 at the end of 2003 if the child's adjusted gross income from Form 1040NR, line 34, exceeds the child's earned income by more than $5,600.

Credits

Line 42—Foreign tax credit. If you paid income tax to a foreign country, you may be able to take this credit. But only if you:

Report income from foreign sources (see Foreign Income Taxed by the United States on page 6) and
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 six of the following apply.

Form 1040NR is being filed for a nonresident alien individual and not an estate or trust.
All of your gross foreign source income is from the passive category (which includes most interest and dividend income).
All the income and any foreign taxes paid on it were reported to you on qualified payee statements, such as Form 1099-INT, Form 1099-DIV, or similar substitute statements.
If you have dividend income from shares of stock, you held those shares for at least 16 days.
The total of your foreign taxes is not more than $300.
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 six requirements, enter on line 42 the smaller of your total foreign taxes or the amount on Form 1040NR, line 39. If you do not meet all six requirements, see
Form 1116 to find out if you can take the credit.

Line 43—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 the Instructions for Form 2441.

Line 44—Retirement savings contributions credit. You may be able to take this credit if you made (a) contributions to a traditional or Roth IRA, (b) elective deferrals to a 401(k), 403(b), governmental 457, SEP, or SIMPLE plan, (c) voluntary employee contributions to a qualified retirement plan (including the Federal Thrift Savings Plan), or (d) contributions to a 501(c)(18)(D) plan.

However, you cannot take the credit if either of the following applies.

The amount on Form 1040NR, line 34, is more than $25,000.
The person(s) who made the qualified contribution or elective deferral (a) was born after January 1, 1986, (b) is claimed as a dependent on someone else's 2003 tax return, or (c) was a student (defined below).

You were a student if during any 5 months of 2003 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 45—Child tax credit. This credit is for people who have a qualifying child as defined below. It is in addition to the credit for child and dependent care expenses on Form 1040NR, line 43.

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 on this page or if you must use Pub. 972.

Who Must Use Pub. 972

1.	Is the amount on Form 1040NR, line 34, more than the amount shown below for your filing status?
	Filing status 1, 2, or 6—$75,000 Filing status 3, 4, or 5—$55,000
	□	No. Go to line 2.
	□	Yes.Stop. You must use Pub. 972 to figure your credit.
2.	Are you claiming any of the following credits?
	Adoption credit, Form 8839 (see the instructions for Form 1040NR, line 46, on page 19) Mortgage interest credit, Form 8396 (see the instructions for Form 1040NR, line 47, on page 19) District of Columbia first-time homebuyer credit, Form 8859
	□	No. Use the worksheet below to figure your child tax credit.
	□	Yes. You must use Pub. 972 to figure your child tax credit. You will also need the form(s) listed above for any credit(s) you are claiming.

Qualifying Child for Child Tax Credit. A qualifying child for purposes of the child tax credit is a child who:

Is claimed as your dependent on line 7c, and
Was under age 17 at the end of 2003, and
Is your (a) son, daughter, adopted child, stepchild, or a descendant of any of them (for example, your grandchild); (b)brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or nephew), whom you cared for as you would your own child; or (c) foster child (any child placed with you by an authorized placement agency whom you cared for as you would your own child), and
Is a U.S. citizen or resident alien.

Advance Child Tax Credit Payment. You must reduce your 2003 child tax credits by any advance child tax credit payment you received in 2003. Enter the amount of any advance payment you received (before offset) on line 2 of your Child Tax Credit Worksheet. The amount of your advance payment (before offset) is shown on Notice 1319. This notice was mailed to you in 2003. If you do not have this notice, you can check the amount of your advance payment (before offset) on the IRS website at www.irs.gov or call us at 1-800-829-1040. For details on offsets, see Refund Offset on page 20.

If you filed a joint return for 2002, you are considered to have received one-half of the advance payment.

If you received an advance payment but did not have a qualifying child for 2003, you do not have to pay back the amount you received. Do not enter the amount of your advance payment on your return.

Line 46—Adoption credit. You may be able to take this credit if either of the following applies.

You paid expenses to adopt a child.
You adopted a child with special needs and the adoption became final in 2003. See the Instructions for Form 8839 for details.

Line 47. Include the following credits on line 47 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 48—Other credits. Include the following credits on line 48 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 2003, 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 52—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 Form(s) W-2 show 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 53—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.

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.
Excess contributions were made to your IRAs, Coverdell education savings accounts (ESAs), or Archer MSAs.
You received taxable distributions from Coverdell ESAs or qualified tuition programs.
You were born before July 1, 1932, 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 53. 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” in the margin to the right of line 53 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 54—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:

You had a fixed place of business in the United States involved in the earning of transportation income and
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 55—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.

You paid any one household employee (defined below) cash wages of $1,400 or more in 2003. Cash wages include wages paid by checks, money orders, etc.
You withheld Federal income tax during 2003 at the request of any household employee.
You paid total cash wages of $1,000 or more in any calendar quarter of 2002 or 2003 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 2003 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 56—Total tax. Include in the total on line 56 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 56, 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 (see Form 8845). Identify as “IECR.”
New markets credit (see Form 8874). Identify as “NMCR.”
Credit for employer-provided child care facilities (see Form 8882). Identify as “ECCFR.”

Recapture of Federal Mortgage Subsidy. If you sold your home in 2003 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 Form W-2 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 57—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 57 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 57 any tax withheld on scholarship or fellowship grants from Form 1042-S, box 7.

If you received a 2003 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 57. This should be shown in box 4 of the Form 1099.

Do not include on line 57 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 64 on page 2.

Line 58—2003 estimated tax payments. Enter any estimated Federal income tax payments you made using Form 1040-ES (NR) for 2003. Include any overpayment from your 2002 return that you applied to your 2003 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 2003 and show the name(s) and identifying number(s) under which you made them.

Line 59 — Excess social security and tier 1 RRTA tax withheld. If you had more than one employer for 2003 and total wages of more than $87,000, 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 $5,394. But if any one employer withheld more than $5,394, 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 60—Additional child tax credit. This credit is for certain people who have at least one qualifying child as defined in the instructions for line 45 that begin on page 18. The additional child tax credit may give you a refund even if you do not owe any tax.

To take the credit:

Be sure you figured the amount, if any, of your child tax credit. See the instructions for line 45 that begin on page 18.
Read the TIP at the end of your Child Tax Credit Worksheet on page 18. 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.

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Line 66b sample check

Line 61—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 or by electronic funds withdrawal or credit card. If you paid by credit card, do not include on line 61 the convenience fee you were charged. Also, include any amount paid with Form 2688.

Line 62—Other payments. Check the box(es) on line 62 to report any credit from Form 2439, 4136, or 8885.

Line 63—Credit for amount paid with Form 1040-C. Enter any amount you paid with Form 1040-C for 2003.

Line 64—U.S. tax withheld at source. Enter on line 64 the amount you show on page 4, line 83. Be sure to attach a copy of all Form(s) 1042-S, SSA-1042S, RRB-1042S, or similar form(s).

Lines 65a and 65b—U.S. tax withheld at source by partnerships under section 1446. Enter on line 65a any tax withheld by a partnership shown on Form(s) 8805. Enter on
line 65b 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 66a and 66b—U.S. tax withheld on dispositions of U.S. real property interests. Enter on line 66a any tax withheld on dispositions of U.S. real property interests from
Form(s) 8288-A. Enter on line 66b 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.

Refund

Line 68—Amount overpaid. If
line 68 is under $1, we will send a refund only on written request.

If the amount you overpaid is large, you may be able to decrease the amount of income tax withheld from your pay by filing a new Form W-4. See Income Tax Withholding and Estimated Tax Payments for Individuals for 2004 on page 26.

Refund Offset. If you owe past-due Federal tax, state income tax, child support, spousal support, or certain Federal nontax debts, such as student loans, all or part of the overpayment on line 68 may be used (offset) to pay the past-due amount. Offsets for Federal taxes are made by the IRS. All other offsets are made by the Treasury Department's Financial Management Service (FMS). You will receive a notice from FMS showing the amount of the offset and the agency receiving it. To find out if you may have an offset or if you have any questions about it, contact the agency(ies) to which you owe the debt.

Lines 69b through 69d—Direct deposit of refund. Complete lines 69b through 69d if you want us to directly deposit the amount shown on line 69a into your checking or savings account at a U.S. bank or other financial institution (such as a mutual fund, brokerage firm, or credit union) in the United States instead of sending you a check.

Note:

If you do not want your refund directly deposited into your account, draw a line through the boxes on lines 69b and 69d.

Why Use Direct Deposit?

You get your refund fast.
Payment is more secure—there is no check to get lost.
More convenient. No trip to the bank to deposit your check.
Saves tax dollars. A refund by direct deposit costs less than a check.

You can check with your financial institution to make sure your direct deposit will be accepted and to get the correct routing and account numbers. The IRS is not responsible for a lost refund if you enter the wrong account information.

Line 69b. The routing number must be nine digits. The first two digits must be 01 through 12 or 21 through 32. Otherwise, the direct deposit will be rejected and a check sent instead. The routing number of the sample check above is 250250025.

Your check may state that it is payable through a financial institution different from the one at which you have your checking account. If so, do not use the routing number on that check. Instead, contact your financial institution for the correct routing number to enter on line 69b.

Line 69d. The account number can be up to 17 characters (both numbers and letters). Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. The account number of the sample check above is 20202086. Be sure not to include the check number.

Line 70—Applied to 2004 estimated tax. Enter on line 70 the amount, if any, of the overpayment on line 68 you want applied to your 2004 estimated tax. This election cannot be changed later.

Amount You Owe

Line 71—Amount you owe.

You do not have to pay if line 71 is under $1.

Include any estimated tax penalty from line 72 in the amount you enter on line 71.

You can pay by check, money order, or credit card. Do not include any estimated tax payment for 2004 in your check, money order, or amount you charge. Instead, make the estimated tax payment separately.

To Pay by Check or Money Order. Make your check or money order payable to the “United States Treasury” for the full amount due. Do not send cash. Do not attach the payment to your return. Write “2003 Form 1040NR” and your name, address, daytime phone number, and SSN or ITIN on your payment.

To help us process your payment paragraph

To Pay by Credit Card. You may use your American Express® Card, Discover® Card, MasterCard® card, or Visa® card. To pay by credit card, call toll free or visit the website of either service provider listed below and follow the instructions. You will be asked to provide your Social Security Number (SSN). If you do not have and are not eligible to get an SSN, use your IRS-issued individual taxpayer identification number (ITIN) instead.

A convenience fee will be charged by the service provider based on the amount you are paying. Fees may vary between the providers. You will be told what the fee is during the transaction and you will have the option to either continue or cancel the transaction. You can also find out what the fee will be by calling the provider's toll-free automated customer service number or visiting the provider's website shown below.

If you pay by credit card before filing your return, please enter on page 1 of Form 1040NR in the upper left corner the confirmation number you were given at the end of the transaction and the amount you charged (not including the convenience fee).

	Link2Gov Corporation 1-888-PAY-1040 ^SM (1-888-729-1040) 1-888-658-5465 (Customer Service) www.PAY1040.com
	Official Payments Corporation 1-800-2PAY-TAX ^SM (1-800-272-9829) 1-877-754-4413 (Customer Service) www.officialpayments.com

You may need to (a) increase the amount of income tax withheld from your pay by filing a new Form W-4 or (b) make estimated tax payments for 2004. See Income Tax Withholding and Estimated Tax Payments for Individuals for 2004 on page 26.

What if You Cannot Pay? If you cannot pay the full amount shown on line 71 when you file, you may ask to make monthly installment payments. You may have up to 60 months to pay. However, you will be charged interest and may be charged a late payment penalty on the tax not paid by the date due, even if your request to pay in installments is granted. You must also pay a fee. To limit the interest and penalty charges, pay as much of the tax as possible when you file. But before requesting an installment agreement, you should consider other less costly alternatives, such as a bank loan.

To ask for an installment agreement, use Form 9465. You should receive a response to your request for installments within 30 days. But if you file your return after March 31, it may take us longer to reply.

Line 72—Estimated tax penalty. You may owe this penalty if:

Line 71 is at least $1,000 and it is more than 10% of the tax shown on your return or
You did not pay enough estimated tax by any of the due dates. This is true even if you are due a refund.

For most people, the “tax shown on your return” is the amount on line 56 minus the total of any amounts shown on line 60 and Forms 8828, 4137, 4136, 5329 (Parts III, IV, V, VI, and VII only), and 8885. When figuring the amount on line 56, include the amount on line 55 only if line 57 is more than zero or you would owe the penalty even if you did not include those taxes. But if you entered an amount on Schedule H (Form 1040), line 7, include the total of that amount plus the amount on Form 1040NR, line 55.

Exception. You will not owe the penalty if your 2002 tax return was for a tax year of 12 full months and either of the following applies.

You had no tax liability for 2002 and you were a U.S. citizen or resident for all of 2002 or
The total of lines 57, 58, 59, and 63 through 66b on your 2003 return is at least as much as the tax liability shown on your 2002 return. Your estimated tax payments for 2003 must have been made on time and for the required amount.

If your 2002 adjusted gross income was over $150,000 (over $75,000 if you checked filing status box 3, 4, or 5 for 2003), the exception above applies only if the total of lines 57, 58, 59, and 63 through 66b on your 2003 tax return is at least 110% of the tax liability shown on your 2002 return. This rule does not apply to farmers and fishermen.

Figuring the Penalty. If the Exception above does not apply and you choose to figure the penalty yourself, see Form 2210(or Form 2210-F for farmers and fishermen) to find out if you owe the penalty. If you do, you can use the form to figure the amount.

Enter the penalty on Form 1040NR, line 72. Add the penalty to any tax due and enter the total on line 71. If you are due a refund, subtract the penalty from the overpayment you show on line 68. Do not file Form 2210 with your return unless Form 2210 indicates that you must do so. Instead, keep it for your records.

Because Form 2210 is complicated, if you want to, you can leave line 72 blank and the IRS will figure the penalty and send you a bill. We will not charge you interest on the penalty if you pay by the date specified on the bill. If your income varied during the year, the annualized income installment method may reduce the amount of your penalty. But you must file Form 2210 because the IRS cannot figure your penalty under this method. See the Instructions for Form 2210 for other situations in which you may be able to lower your penalty by filing Form 2210.

Third Party Designee

If you want to allow a friend, family member, or any other person you choose to discuss your 2003 tax return with the IRS, check the “Yes” box in the “Third Party Designee” area of your return. Also, enter the designee's name, U.S. phone number, and any five numbers the designee chooses as his or her personal identification number (PIN). But if you want to allow the paid preparer who signed your return to discuss it with the IRS, just enter “Preparer” in the space for the designee's name. You do not have to provide the other information requested.

If you check the “Yes” box, you are authorizing the IRS to call the designee to answer any questions that may arise during the processing of your return. You are also authorizing the designee to:

Give the IRS any information that is missing from your return,
Call the IRS for information about the processing of your return or the status of your refund or payment(s),
Receive copies of notices or transcripts related to your return, upon request, and
Respond to certain IRS notices about math errors, offsets, and return preparation.

You are not authorizing the designee to receive any refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the IRS. If you want to expand the designee's authorization, see
Pub. 947.

The authorization will automatically end no later than the due date (without regard to extensions) for filing your 2004 tax return (see When To File on page 4). If you wish to revoke the authorization before it ends, see Pub. 947.

Signature

See Reminders on page 26 after you complete pages 3, 4, and 5 of the form.

Instructions for Schedule A, Itemized Deductions

State and Local Income Taxes

Lines 1 Through 3

You can deduct state and local income taxes you paid or that were withheld from your salary during 2003 on income connected with a U.S. trade or business. If, during 2003, you received any refunds of, or credits for, income tax paid in earlier years, do not subtract them from the amount you deduct here. Instead, see the instructions for
Form 1040NR, line 11, on page 10.

Gifts to U.S. Charities

Lines 4 Through 7

You may deduct contributions or gifts you gave to U.S. organizations that are religious, charitable, educational, scientific, or literary in purpose. You may also deduct what you gave to organizations that work to prevent cruelty to children or animals.

To verify an organization's charitable status, you can:

Check with the organization to which you made the donation. The organization should be able to provide you with verification of its charitable status.
See Pub. 78 for a list of most qualified organizations. You can access Pub. 78 at www.irs.gov under Charities and Non-Profits.
If in the United States, call our Tax Exempt/Government Entities Customer Account Services at 1-877-829-5500.Assistance is available Monday through Friday from 8:00 a.m. to 6:30 p.m. Eastern time.

Contributions you may deduct. Contributions may be in cash (keep canceled checks, receipts, or other reliable written records showing the name of the organization and the date and amount given), property, or out-of-pocket expenses you paid to do volunteer work for the kinds of organizations described earlier. If you drove to and from the volunteer work, you may take 14 cents a mile or the actual cost of gas and oil. Add parking and tolls to the amount you claim under either method. But do not deduct any amounts that were repaid to you.

Gifts From Which You Benefit. If you made a gift and received a benefit in return, such as food, entertainment, or merchandise, you may generally only deduct the amount that is more than the value of the benefit. But this rule does not apply to certain membership benefits provided in return for an annual payment of $75 or less. For details, see Pub. 526.

Example. You paid $70 to a charitable organization to attend a fund-raising dinner and the value of the dinner was $40. You may deduct only $30.

Gifts of $250 or More. You may deduct a gift of $250 or more only if you have a statement from the charitable organization showing the information in 1 and 2 below.

In figuring whether a gift is $250 or more, do not combine separate donations. For example, if you gave your church $25 each week for a total of $1,300, treat each $25 payment as a separate gift. If you made donations through payroll deductions, treat each deduction from each paycheck as a separate gift. See Pub. 526 if you made a separate gift of $250 or more through payroll deduction.

The amount of any money contributed and a description (but not value) of any property donated.
Whether the organization did or did not give you any goods or services in return for your contribution. If you did receive any goods or services, a description and estimate of the value must be included. If you received only intangible religious benefits (such as admission to a religious ceremony), the organization must state this, but it does not have to describe or value the benefit.

You must get the statement by the date you file your return or the due date (including extensions) for filing your return, whichever is earlier. Do not attach the statement to your return. Instead, keep it for your records.

Limit on the Amount You May Deduct. See Pub. 526 to figure the amount of your deduction if any of the following apply.

Your cash contributions or contributions of ordinary income property are more than 30% of the amount on Form 1040NR, line 34.
Your gifts of capital gain property are more than 20% of the amount on
Form 1040NR, line 34.
You gave gifts of property that increased in value or gave gifts of the use of property.

Contributions You May Not Deduct

Travel expenses (including meals and lodging) while away from home unless there was no significant element of personal pleasure, recreation, or vacation in the travel.
Political contributions.
Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups.
Cost of raffle, bingo, or lottery tickets.
Cost of tuition. But you may be able to deduct this expense on line 9. See page 24.
Value of your time or services.
Value of blood given to a blood bank.
The transfer of a future interest in tangible personal property (generally, until the entire interest has been transferred).
Gifts to individuals and groups that are run for personal profit.
Gifts to foreign organizations. But you may be able to deduct gifts to certain U.S. organizations that transfer funds to foreign charities and certain Canadian, Israeli, and Mexican charities. See Pub. 526 for details.
Gifts to organizations engaged in certain political activities that are of direct financial interest to your trade or business. See section 170(f)(9).
Gifts to groups whose purpose is to lobby for changes in the laws.
Gifts to civic leagues, social and sports clubs, labor unions, and chambers of commerce.
Value of benefits received in connection with a contribution to a charitable organization. See Pub. 526 for exceptions.

Line 4

Enter the total contributions you made in cash or by check (including out-of-pocket expenses).

Line 5

Enter your contributions of property. If you gave used items, such as clothing or furniture, deduct their fair market value at the time you gave them. Fair market value is what a willing buyer would pay a willing seller when neither has to buy or sell and both are aware of the conditions of the sale. For more details on determining the value of donated property, see Pub. 561.

If the amount of your deduction is more than $500, you must complete and attach Form 8283. For this purpose, the “amount of your deduction” means your deduction before applying any income limits that could result in a carryover of contributions. If your total deduction is over $5,000, you may also have to get appraisals of the values of the donated property. See Form 8283 and its instructions for details.

Recordkeeping. If you gave property, you should keep a receipt or written statement from the organization you gave the property to, or a reliable written record, that shows the organization's name and address, the date and location of the gift, and a description of the property. For each gift of property, you should also keep reliable written records that include:

How you figured the property's value at the time you gave it. If the value was determined by an appraisal, keep a signed copy of the appraisal.
The cost or other basis of the property if you must reduce it by any ordinary income or capital gain that would have resulted if the property had been sold at its fair market value.
How you figured your deduction if you chose to reduce your deduction for gifts of capital gain property.
Any conditions attached to the gift.

Note:

If your total deduction for gifts of property is over $500, you gave less than your entire interest in the property, or you made a “qualified conservation contribution,” your records should contain additional information. See
Pub. 526 for details.

Line 6

Enter any carryover of contributions that you could not deduct in an earlier year because they exceeded your adjusted gross income limit. See
Pub. 526 for details.

Casualty and Theft Losses

Line 8

Complete and attach Form 4684 to figure the amount of your loss to enter on line 8.

You may be able to deduct part or all of each loss caused by theft, vandalism, fire, storm, or similar causes, and car, boat, and other accidents. You may also be able to deduct money you had in a financial institution but lost because of the insolvency or bankruptcy of the institution.

You may deduct nonbusiness casualty or theft losses only to the extent that—

The amount of each separate casualty or theft loss is more than $100 and
The total amount of all losses during the year is more than 10% of the amount shown on Form 1040NR,
line 34.

Special rules apply if you had both gains and losses from nonbusiness casualties or thefts. See Form 4684 and its instructions for details.

Use line 11 of Schedule A to deduct the costs of proving that you had a property loss. Examples of these costs are appraisal fees and photographs used to establish the amount of your loss.

For information on Federal disaster area losses, see Pub. 547.

Job Expenses and Most Other Miscellaneous Deductions

Note:

Miscellaneous deductions are allowed only if and to the extent they are directly related to your effectively connected income. You may deduct only the part of these expenses that exceeds 2% of the amount on Form 1040NR, line 34.

Pub. 529 discusses the types of expenses that may and may not be deducted.

Examples of Expenses You May Not Deduct

Political contributions.
Personal legal expenses.
Lost or misplaced cash or property.
Expenses for meals during regular or extra work hours.
The cost of entertaining friends.
Commuting expenses. See Pub. 529 for the definition of commuting.
Travel expenses for employment away from home if that period of employment exceeds 1 year.
Travel as a form of education.
Expenses of attending a seminar, convention, or similar meeting unless it is related to your employment.
Club dues. See Pub. 529 for exceptions.
Expenses of adopting a child. But you may be able to take a credit for adoption expenses. See Form 8839 for details.
Fines and penalties.
Expenses of producing tax-exempt income.

Line 9

Enter the total ordinary and necessary job expenses you paid for which you were not reimbursed. (Amounts your employer included in box 1 of your Form W-2 are not considered reimbursements.)

An ordinary expense is one that is common and accepted in your field of trade, business, or profession. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.

But you must fill in and attach
Form 2106 if either 1 or 2 below applies.

You claim any travel, transportation, meal, or entertainment expenses for your job.
Your employer paid you for any of your job expenses reportable on
line 9.

If you used your own vehicle and item 2 does not apply, you may be able to file
Form 2106-EZ instead.

If you do not have to file Form 2106 or 2106-EZ, list the type and amount of each expense on the dotted lines next to line 9. If you need more space, attach a statement showing the type and amount of each expense. Enter one total on line 9.

Do not include on line 9 any educator expenses you deducted on Form 1040NR,
line 24.

Examples of other expenses to include on line 9 are:

Safety equipment, small tools, and supplies you needed for your job.
Uniforms required by your employer that are not suitable for ordinary wear.
Protective clothing required in your work, such as hard hats, safety shoes, and glasses.
Physical examinations required by your employer.
Dues to professional organizations and chambers of commerce.
Subscriptions to professional journals.
Fees to employment agencies and other costs to look for a new job in your present occupation, even if you do not get a new job.
Certain business use of part of your home. For details, including limits that apply, see Pub. 587.
Certain educational expenses. For details, see Pub. 970.

Line 10

Enter the fees you paid for preparation of your tax return.

Line 11

Enter the total amount you paid to produce or collect taxable income and manage or protect property held for earning income. But do not include any personal expenses. List the type and amount of each expense on the dotted lines next to line 11. If you need more space, attach a statement showing the type and amount of each expense. Enter one total on line 11.

Examples of expenses to include on line 11 are:

Certain legal and accounting fees.
Clerical help and office rent.
Custodial (for example, trust account) fees.
Your share of the investment expenses of a regulated investment company.
Certain losses on nonfederally insured deposits in an insolvent or bankrupt financial institution. For details, including limits that apply, see Pub. 529.
Casualty and theft losses of property used in performing services as an employee from Form 4684, lines 32 and 38b, or Form 4797, line 18b(1).
Deduction for repayment of amounts under a claim of right if $3,000 or less.

Other Miscellaneous Deductions

Line 16

List the type and amount of each expense on the dotted lines next to
line 16. Enter one total on line 16. Examples of these expenses are:

Casualty and theft losses of income-producing property from
Form 4684, lines 32 and 38b, or Form 4797, line 18b(1).
Deduction for repayment of amounts under a claim of right if over $3,000. See Pub. 525 for details.
Impairment-related work expenses of a disabled person.
Certain unrecovered investment in a pension.

For more details, see Pub. 529.

Total Itemized Deductions

Line 17

Use the worksheet on page 25 to figure the amount to enter on line 17 if the amount on Form 1040NR, line 34, is over $139,500 ($69,750 if you checked filing status box 3, 4, or 5).

Itemized Deductions Worksheet—Line 17
(keep for your records)

1.	Add the amounts on Schedule A, lines 3, 7, 8, 15, and 16			1.
2.	Enter the total of the amount on Schedule A, line 8, plus any casualty or theft losses included on line 16			2.
	Caution: Be sure your casualty or theft losses are clearly identified on the dotted lines next to line 16.
3.	Is the amount on line 2 less than the amount on line 1?
	□	No. Stop. Your deduction is not limited. Enter the amount from line 1 above on Schedule A, line 17.
	□	Yes. Subtract line 2 from line 1		3.
4.	Multiply line 3 above by 80% (.80)		4.
5.	Enter the amount from Form 1040NR, line 34		5.
6.	Enter: $139,500 ($69,750 if you checked filing status box 3, 4, or 5)		6.
7.	Is the amount on line 6 less than the amount on line 5?
	□	No. Stop. Your deduction is not limited. Enter the amount from line 1 above on Schedule A, line 17.
	□	Yes. Subtract line 6 from line 5	7.
8.	Multiply line 7 above by 3% (.03)		8.
9.	Enter the smaller of line 4 or line 8			9.
10.	Total itemized deductions. Subtract line 9 from line 1. Enter the result here and on Schedule A, line 17			10.

Tax on Income Not Effectively Connected With a U.S. Trade or Business (Page 4)

The following items are generally taxed at 30% if they are not effectively connected with your U.S. trade or business. The rate may be lower if your country of residence and the United States have a treaty setting lower rates. Table 1 in Pub. 901 summarizes which countries have such treaties and what the rates are.

The 30% tax applies only to amounts included in gross income. For example, the tax applies only to the part of a periodic annuity or pension payment that is subject to tax; it does not apply to the part that is a return of your cost.

The following list gives only a general idea of the type of income to include on page 4. (For more information, see Pub. 519.) Include the following only to the extent the amount received is not effectively connected with the conduct of a trade or business in the United States.

Income that is fixed or periodic, such as interest (other than original issue discount), dividends, rents, salaries, wages, premiums, annuities, other compensation, or alimony received. Other items of income, such as royalties, also may be subject to the 30% tax.

Interest from a U.S. bank, savings and loan association, or similar institution, and from certain deposits with U.S. insurance companies is tax exempt to nonresident aliens if it is not effectively connected with a U.S. trade or business. For more information, see Pub. 519.

Note:

Portfolio interest that you received as a nonresident alien on obligations issued after July 18, 1984, is exempt from the 30% tax. For more information, see Pub. 519.
Gains, other than capital gains, from the sale or exchange of patents, copyrights, and other intangible property.
Original issue discount (OID). If you sold or exchanged the obligation, include in income the OID that accrued while you held the obligation minus the amount previously included in income. If you received a payment on an OID obligation, see Pub. 519.
Capital gains in excess of capital losses from U.S. sources during 2003. Include these gains only if you were in the United States at least 183 days during 2003. They are not subject to U.S. tax if you were in the United States less than 183 days during the tax year. In determining your net gain, do not use the capital loss carryover.

Losses from sales or exchanges of capital assets in excess of similar gains are not allowed.

If you had a gain or loss on disposing of a U.S. real property interest, see Dispositions of U.S. Real Property Interests on page 6.
Prizes, awards, and certain gambling winnings. Proceeds from lotteries, raffles, etc., are gambling winnings (see section 871(j) for exceptions). You must report the full amount of your winnings. You cannot offset losses against winnings and report the difference.

Note:

Residents of Canada may claim gambling losses, but only to the extent of gambling winnings. They should report both their total gambling winnings and their total gambling losses on the dotted line on line 82 (or attach a separate schedule if more space is needed). If they have net gambling winnings (after offsetting their total gambling losses against their total gambling winnings), they should include this net amount on line 82, column (d).

Social security benefits (and tier 1 railroad retirement benefits treated as social security). 85% of the U.S. social security and equivalent railroad retirement benefits you received are taxable. This amount is treated as U.S. source income not effectively connected with a U.S. trade or business. It is subject to the 30% tax rate, unless exempt or taxed at a reduced rate under a U.S. tax treaty. Social security benefits include any monthly benefit under title II of the Social Security Act or the part of a tier 1 railroad retirement benefit treated as a social security benefit. They do not include any Supplemental Security Income (SSI) payments.

You should receive a
Form SSA-1042S showing the total social security benefits paid to you in 2003 and the amount of any benefits you repaid in 2003. If you received railroad retirement benefits treated as social security, you should receive a Form RRB-1042S.

Enter 85% of the total amount from box 5 of all of your Forms SSA-1042S and Forms RRB-1042S in the appropriate column of line 80 of
Form 1040NR. Enter any Federal tax withheld in column (a) of line 80. Attach a copy of each Form SSA-1042S and RRB-1042S to Form 1040NR.

Withholding of tax at the source. Tax must be withheld at the source on certain income from U.S. sources paid to nonresident aliens. The withholding is generally at the 30% rate. There are exceptions to the general rule, and tax treaties with various countries may provide a lower rate or exempt certain income from withholding. The tax must be withheld by the person who pays fixed or determinable annual or periodic income to nonresident aliens. The income subject to this withholding should be reported on page 4 of
Form 1040NR. For details, see
Pub. 519, Pub. 515, and section 1441 and its regulations.

Other Information
(Page 5)

Item D

Enter the type of U.S. visa (for example, F, J, M, etc.) you used to enter the United States. Also enter your current nonimmigrant status. For example, enter your current nonimmigrant status shown on your current U.S. Citizenship and Immigration Services (USCIS) Form I-94,Arrival-Departure Record. If your status has changed while in the United States, enter the date of change. If your status has not changed, enter “N/A.”

Item E

You are generally required to enter your date of entry into the United States that pertains to your current nonimmigrant status. For example, the date of arrival shown on your most recent USCIS Form I-94.

Exception: If you are claiming a tax treaty benefit that is determined by reference to more than one date of arrival, enter the earlier date of arrival. For example, you are currently claiming treaty benefits (as a teacher or a researcher) under article 19 of the tax treaty between the United States and Japan. You previously claimed treaty benefits (as a student) under article 20 of that treaty. Under article 22 of that treaty, the combination of consecutive exemptions under articles 19 and 20 may not extend beyond 5 tax years from the date you entered the United States as a student. If article 22 of that treaty applies, enter in item E the date you entered the United States as a student.

Item M

If you are a resident of a treaty country (that is, you qualify as a resident of that country within the meaning of the tax treaty between the United States and that country), you must know the terms of the tax treaty between the United States and the treaty country to properly complete item M. You may download the complete text of most U.S. tax treaties at www.irs.gov. Technical explanations for many of those treaties are also available at that site. Also, see Pub. 901 for a quick reference guide to the provisions of U.S. tax treaties.

If you are claiming treaty benefits on Form 1040NR, you must provide all of the information requested in item M.

If you are claiming tax treaty benefits and you failed to submit adequate documentation to a withholding agent, you must attach all information that would have otherwise been required on the withholding document (for example, all information required on Form W-8BEN or
Form 8233).

Treaty-Based Return Position Disclosure. If you take the position that a treaty of the United States overrides or modifies any provision of the Internal Revenue Code and that position reduces (or potentially reduces) your tax, you must report certain information on Form 8833 and attach it to Form 1040NR.

You can be charged a $1,000 penalty for each failure to report the required information. For more details, see Form 8833 and Regulations
section 301.6114-1.

Exceptions. You do not have to file Form 8833 for any of the following situations.

You claim a reduced rate of withholding tax under a treaty on interest, dividends, rents, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate.
You claim a treaty reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers. This includes taxable scholarship and fellowship grants.
You claim a reduction or modification of taxation of income under an International Social Security Agreement or a Diplomatic or Consular Agreement.
You are a partner in a partnership or a beneficiary of an estate or trust and the partnership, estate, or trust reports the required information on its return.
The payments or items of income that are otherwise required to be disclosed total no more than $10,000.

Item P

See Special Rules for Former U.S. Citizens and Former U.S. Long-Term Residents beginning on page 6 for details on how to answer the question in item P and for information that must be included in the annual information statement, if required. If you are a former U.S. long-term resident filing a dual-status return for your last year of U.S. residency, you must also attach
Form 8854. See Dual-Status Taxpayers on page 4.

Reminders

Sign and Date Your Return

Form 1040NR is not considered a valid return unless you sign it. You may have an agent in the United States prepare and sign your return if you could not do so for one of the following reasons:

You were ill.
You were not in the United States at any time during the 60 days before the return was due.
For other reasons that you explained in writing to the Internal Revenue Service Center, Philadelphia, PA 19255, U.S.A., and that the IRS approved.

A return prepared by an agent must be accompanied by a power of attorney. Form 2848 may be used for this purpose.

Be sure to date your return and show your occupation in the United States in the space provided. If you have someone prepare your return, you are still responsible for the correctness of the return.

Child's return. If your child cannot sign the return, you may sign the child's name in the space provided. Then, add “By (your signature), parent for minor child.”

Paid preparer must sign your return. Generally, anyone you pay to prepare your return must sign it in the space provided. The preparer must give you a copy of the return for your records. Someone who prepares your return but does not charge you should not sign your return.

Income Tax Withholding and Estimated Tax Payments for Individuals for 2004

If the amount you owe or the amount you overpaid is large, you may be able to file a new Form W-4 with your employer to change the amount of income tax withheld from your 2004 pay. For details on how to complete Form W-4, see the Instructions for Form 8233.

In general, you do not have to make estimated tax payments if you expect that your 2004 Form 1040NR will show a tax refund or a tax balance due the IRS of less than $1,000. If your total estimated tax (including any household employment taxes or alternative minimum tax) for 2004 is $1,000 or more, see Form 1040-ES (NR). It has a worksheet you can use to see if you have to make estimated tax payments. However, if you expect to be a resident of Puerto Rico during all of 2004 and you must pay estimated tax, use
Form 1040-ES.

Gift To Reduce the Public Debt

If you wish to make such a gift, make a check payable to “Bureau of the Public Debt.” You can send it to: Bureau of the Public Debt, Department G, P.O. Box 2188, Parkersburg, WV 26106-2188. Or, you can enclose the check with your income tax return when you file. Do not add your gift to any tax you may owe. See page 21 for details on how to pay any tax you owe.

You may be able to deduct this gift on your 2004 tax return as a charitable contribution.

Address Change

If you move after you file, always notify the IRS of your new address. To do this, use Form 8822.

How Long Should Records Be Kept?

Keep a copy of your tax return, worksheets you used, and records of all items appearing on it (such as Forms W-2, 1099, and 1042-S) until the statute of limitations runs out for that return. Usually, this is 3 years from the date the return was due or filed, or 2 years from the date the tax was paid, whichever is later. You should keep some records longer. For example, keep property records (including those on your home) as long as they are needed to figure the basis of the original or replacement property. For more details, see Pub. 552.

Amended Return

File Form 1040X to change a return you already filed. Also, use
Form 1040X if you filed Form 1040NR and you should have filed a Form 1040, 1040A, or 1040EZ, or vice versa. Generally, Form 1040X must be filed within 3 years after the date the original return was filed, or within 2 years after the date the tax was paid, whichever is later. But you may have more time to file Form 1040X if you are physically or mentally unable to manage your financial affairs. See Pub. 556 for details.

Requesting a Copy of Your Tax Return

If you need a copy of your tax return, use Form 4506.

Interest and Penalties

You do not have to figure the amount of any interest or penalties you may owe. Because figuring these amounts can be complicated, we will do it for you if you want. We will send you a bill for any amount due.

If you include interest or penalties (other than the estimated tax penalty) with your payment, identify and enter the amount in the bottom margin of Form 1040NR, page 2. Do not include interest or penalties (other than the estimated tax penalty) in the amount you owe on line 71.

Interest. We will charge you interest on taxes not paid by their due date, even if an extension of time to file is granted. We will also charge you interest on penalties imposed for failure to file, negligence, fraud, substantial valuation misstatements, and substantial understatements of tax. Interest is charged on the penalty from the due date of the return (including extensions).

Penalty for late filing. If you do not file your return by the due date (including extensions), the penalty is usually 5% of the amount due for each month or part of a month your return is late, unless you have a reasonable explanation. If you do, attach it to your return. The penalty can be as much as 25% (more in some cases) of the tax due. If your return is more than 60 days late, the minimum penalty will be $100 or the amount of any tax you owe, whichever is smaller.

Penalty for late payment of tax. If you pay your taxes late, the penalty is usually ½ of 1% of the unpaid amount for each month or part of a month the tax is not paid. The penalty cannot be more than 25% of the unpaid amount. It applies to any unpaid tax on the return. This penalty is in addition to interest charges on late payments.

Penalty for frivolous return. In addition to any other penalties, the law imposes a penalty of $500 for filing a frivolous return. A frivolous return is one that does not contain information needed to figure the correct tax or shows a substantially incorrect tax because you take a frivolous position or desire to delay or interfere with the tax laws. This includes altering or striking out the preprinted language above the space where you sign.

Other penalties. Other penalties can be imposed for negligence, substantial understatement of tax, and fraud. Criminal penalties may be imposed for willful failure to file, tax evasion, or making a false statement. See Pub. 519 for details on some of these penalties.

Taxpayer Assistance

IRS assistance is available to help you prepare your return. But you should know that you are responsible for the accuracy of your return. If we do make an error, you are still responsible for the payment of the correct tax.

In the United States, you may call 1-800-829-1040. If overseas, you may call 215-516-2000 (English-speaking only). This number is not toll free. The hours of operation are from 6:00 a.m. to 2:00 a.m. EST.

If you wish to write instead of call, please address your letter to: Internal Revenue Service, International Section, P.O. Box 920, Bensalem, PA 19020-8518. Make sure you include your identifying number (defined on page 7) when you write.

Assistance in answering tax questions and filling out tax returns is also available in person from IRS offices in: Berlin, Germany; London, England; Paris, France; Rome, Italy; and Tokyo, Japan. The offices generally are located in the U.S. embassies or consulates.

The IRS conducts an overseas taxpayer assistance program during the filing season (January to mid-June). To find out if IRS personnel will be in your area, contact the consular office at the nearest U.S. embassy.

Everyday tax solutions. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov or look in a U.S. phone book under “United States Government, Internal Revenue Service.”

How can you get IRS tax forms and publications?

You can download them from the IRS website at www.irs.gov.
In the United States, you can call 1-800-TAX-FORM (1-800-829-3676).
If you have a foreign address, you can send your order to the Eastern Area Distribution Center, P.O. Box 85074, Richmond, VA 23261-5074, U.S.A.
You can pick them up in person from our U.S. embassies and consulates abroad (but only during the tax return filing period).

Help With Unresolved Tax Issues

If you have attempted to deal with an IRS problem unsuccessfully, you should contact the Taxpayer Advocate.

The Taxpayer Advocate independently represents your interests and concerns within the IRS by protecting your rights and resolving problems that have not been fixed through normal channels.

While Taxpayer Advocates cannot change the tax law or make a technical tax decision, they can clear up problems that resulted from previous contacts and ensure that your case is given a complete and impartial review.

To contact a Taxpayer Advocate:

If you are in the United States, call their toll-free number: 1-877-777-4778. TTY/TDD help is available by calling 1-800-829-4095.
If overseas, call 01-787-622-8930 (English-speaking only) or 01-787-622-8940 (Spanish-speaking only). These numbers are not toll free.
You can write to the Taxpayer Advocate at the IRS office that last contacted you (or contact one of the overseas IRS offices listed on this page).

For more information about the Taxpayer Advocate, see Pub. 1546.

Line Instructions for Form 1040NR