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Income Codes (continued)Income Code 19—Compensation for Teaching or Researching (continued)Some countries, including India, the Netherlands, and Thailand, have treaty clauses saying that if the maximum years of presence are exceeded, the entire treaty benefit is lost. This could require a teacher to file amended returns and pay tax on previous years' income. If a teacher expects to stay more than the limited years of presence, they should avoid claiming the treaty benefit for any years. If they leave sooner than anticipated, prior to the period expiring, they can file amended returns to properly claim their treaty benefits. Other countries, such as the Czech Republic, France, Indonesia, Israel, Jamaica, Netherlands, Philippines, Portugal, Slovak Republic and Thailand prohibit claiming this treaty benefit if a teacher has either claimed a tax treaty provision as a student, or made a previous treaty claim as a teacher. Refer to Publication 901, U.S. Tax Treaties, for specific information on these countries. 
The treaty exemption for teaching or research income is counted from the day of arrival in the U.S. (In some cases, this may mean that treaty provisions extend into a tax year where the individual may be considered a resident alien. These returns would be Out of Scope for all VITA programs.) |
