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Standard Deduction :3 Types of Nonresident Aliens Can Claim It ?


Standard deduction is substantially increased after passing of Tax Cuts & Jobs and is a major deduction for US taxpayers who do not want to claim itemized deduction while filing taxes.However, the standard deduction is not available for nonresident aliens. But , to your surprise , nonresident aliens  are still allowed to claim standard deduction in three exceptional circumstances.

Who can not claim standard deduction?

In following situations, you can not claim the standard deduction:

  1. If you itemize your deductions.
  2. If your tax filing status is “married filing separately” and your spouse itemizes deductions
  3. A nonresident alien or dual status alien during any part of the year
  4. If you file a return for a period of less than 12 months due to a change in  annual accounting period
  5. If you are a estate or a trust, common trust fund, or partnership.

When Nonresident alien  can claim standard deduction ?

In the following situations , a nonresident alien or a dual status Individual can claim standard deduction:

  1. A nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year; (also read  Tax Effect of Nonresident Alien Spouse Chosen As Tax Resident of US  !)
  2. A nonresident alien at the beginning of the tax year who is a U.S. citizen or resident by the end of the tax year, is married to a U.S. citizen or resident at the end of such tax year, and makes a joint election with his or her spouse to be treated as a U.S. resident for the entire tax year; and
  3. Student or business apprentice who are residents of India . They are covered by paragraph 2 of Article 21 (Payments Received by Students and Apprentices) of the United States-India Income Tax Treaty which is as under :
    • 2.In respect of grants, scholarships and remuneration from employment not covered by paragraph 1, a student or business apprentice described in paragraph 1 shall, in addition, be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the State which he is visiting.

Please refer Section 63 (c) of US Code 26

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