Author Topic: Do I need to file US taxes? (Canadian with US royalties)  (Read 254 times)

kmd

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Do I need to file US taxes? (Canadian with US royalties)
« on: June 10, 2018, 11:18:37 PM »
Hi,

I'm a Canadian citizen that was in the US from 2010-2016 on an F-1 visa. In 2016 I returned to Canada (filed as a part-year resident).

In 2017, I received a number of royalty payments for a patent on which I was named as an inventor (rights were transferred to the university). Prior to receiving these payments, I completed a W-8BEN through a tax compliance system, claiming the US-Canada tax treaty (Article XII) and reducing the withholding rate to 0%.

Am I correct in assuming that I do not need to file a US tax return (or state return)? I was not present in the US in 2017 (except a 3 day vacation), and I do not have any other US source income or connection to the US.

For some reason, some of the payments have been reported on a 1099-misc and some on a 1042-S. Given my status, I think that everything should have been reported on a 1042-S but I have yet to hear back from the university. I'm not sure if how the payments were reported will complicate my situation.

Thanks so much for any guidance!

Phil Hogan, CPA, CA, CPA (Colorado)

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Re: Do I need to file US taxes? (Canadian with US royalties)
« Reply #1 on: June 15, 2018, 08:49:22 AM »
Hi KMD

Thanks for the question. Yes, on the surface that seems to be correct. Royalties of this kind should only be taxable in the country of residence, e.g. Canada. You shouldn't need to file a US return to report these royalties.

Did you file a dual status US tax return when you left the US?

https://www.irs.gov/pub/irs-pdf/i1040nr.pdf
Phil Hogan, CPA, CA, CPA (Colorado)
250-381-2400
Hutcheson.ca
phil@hutcheson.ca
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