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Some Typical Tax Treaty Benefits — Resident Aliens: U.S. Taxes for Noncitizens (2025 IRS Guide)

This guide covers “Some Typical Tax Treaty Benefits — Resident Aliens” within u.s. taxes for noncitizens. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 519 (2025), U.S. Tax Guide for Aliens, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

The following paragraphs briefly explain the exemptions that are available under tax treaties for personal services income, remittances, scholarships, fellowships, and capital gain income. The conditions for claiming the exemptions vary under each tax treaty. For more information about the conditions under a particular tax treaty, download the complete text of most U.S. tax treaties at IRS.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties-A-to-Z. Technical explanations for many of those treaties are also available at that website. Also, see Pub. 901.

Tax treaty benefits also cover income such as dividends, interest, rentals, royalties, pensions, and annuities. These types of income may be exempt from U.S. tax or may be subject to a reduced rate of tax. For more information, see Pub. 901 or the applicable tax treaty.

Some Typical Tax Treaty Benefits — Resident Aliens

Resident aliens may qualify for tax treaty benefits in the situations discussed below.

General Rule for Resident Aliens

Resident aliens generally do not qualify for tax treaty benefits because most tax treaties contain a “saving clause” that preserves or “saves” the right of the United States to tax its citizens and residents as if the tax treaty had not come into effect. However, many tax treaties have exceptions to the saving clause, which may allow a resident alien to continue to claim treaty benefits.

Some exceptions to the saving clause apply to all resident aliens (for example, under the United States-People’s Republic of China treaty); others apply only to resident aliens who are not lawful permanent residents of the United States (green card holders).

In certain cases, you don’t need to report the income on your Form 1040 or 1040-SR because the income will be exempt from U.S. tax under a treaty. However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 or 1040-SR (for example, line 1a in the case of wages or salaries reported in box 1 of Form W-2). Enter the amount for which treaty benefits are claimed, in parentheses, on Schedule 1 (Form 1040), line 8z. Enter “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption.

For income that is subject to a reduced rate of tax, instead of an exemption, under the treaty, attach a statement to Form 1040 or 1040-SR showing a computation of the tax at the reduced rate, the name of the treaty country, and the treaty article that provides for the reduced tax rate. Enter this tax on Form 1040 or 1040-SR, line 16. Check box 3 and enter “Tax from attached statement.”

Example.

Jacques Dubois, who is a resident of the United States under Article 4 of the United States-France income tax treaty, receives French social security benefits. Under Article 18(1) of the treaty, French social security benefits are not taxable by the United States. Benefits conferred by Article 18(1) are excepted from the saving clause under Article 29(3) of the treaty. Jacques is not required to report the French social security benefits on Form 1040 or 1040-SR.

Special Rule for Canadian and German Social Security Benefits

Under income tax treaties with Canada and Germany, if a U.S. resident receives social security benefits from Canada or Germany, those benefits are treated for U.S. income tax purposes as if they were received under the social security legislation of the United States. If you receive social security benefits from Canada or Germany, include them on line 1 of your Social Security Benefits Worksheet in the Instructions for Form 1040 for purposes of determining the taxable amount to be reported on Form 1040 or 1040-SR, line 6b. You are not required to file a Form 8833 for those benefits.

Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens

Generally, you must be a nonresident alien student, apprentice, trainee, teacher, professor, or researcher in order to claim a tax treaty exemption for remittances from abroad for study and maintenance in the United States; for scholarship, fellowship, and research grants; and for wages or other personal services compensation. Once you become a resident alien, you can generally no longer claim a tax treaty exemption for this income.

However, if you entered the United States as a nonresident alien, but you are now a resident alien for U.S. tax purposes, the treaty exemption will continue to apply if the tax treaty’s saving clause (explained earlier) provides an exception for it and you otherwise meet the requirements for the treaty exemption (including any time limit for claiming treaty exemptions, explained below). This is true even if you are a nonresident alien electing to file a joint return, as explained in chapter 1.

If you qualify under an exception to the treaty’s saving clause, you can avoid income tax withholding by giving the payer a Form W-9 with the statement required by the Form W-9 instructions.

Time limit for claiming treaty exemptions.

Many treaties limit the number of years you can claim a treaty exemption. For students, apprentices, and trainees, the limit is usually 4–5 years; for teachers, professors, and researchers, the limit is usually 2–3 years. Once you reach this limit, you can no longer claim the treaty exemption. See the treaty or Pub. 901 for the time limits that apply.

How to report income on your tax return.

In certain cases, you don’t need to report the income on your Form 1040 or 1040-SR because the income will be exempt from U.S. tax under a treaty. However, if the income has been reported as taxable income on a Form W-2, Form 1042-S, Form 1099, or other information return, you should report it on the appropriate line of Form 1040 or 1040-SR (for example, line 1a, amounts reported in box 1 of Form W-2). Enter the amount for which treaty benefits are claimed, in parentheses, on Schedule 1 (Form 1040), line 8z. Enter “Exempt income,” the name of the treaty country, and the treaty article that provides the exemption.

Example.

A citizen of the People’s Republic of China entered the United States as a nonresident alien student on January 1, 2021. The student remained a nonresident alien through 2025 and was able to exclude scholarship income from U.S. tax in those years under Article 20 of the U.S.-People’s Republic of China income tax treaty. On January 1, 2026, the student became a resident alien under the substantial presence test because their stay in the United States exceeded 5 years. Even though the student is now a resident alien, the provisions of Article 20 still apply because of the exception to the saving clause in paragraph 2 of the Protocol to the U.S.-People’s Republic of China treaty dated April 30, 1984. The student should report their scholarship income shown on their Form 1042-S or Form 1098-T on Schedule 1 (Form 1040), line 8r. Then they should report the amount for which treaty benefits are claimed, in parentheses, on Schedule 1 (Form 1040), line 8z. They should enter "Exempt income," the name of the treaty country, and the treaty article that provides the exemption.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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