Unique Treaty Provisions (continued)

Canada

The tax treaty with Canada exempts all earned income if a taxpayer coming from Canada earned up to $10,000 in the tax year, but taxes all income if the taxpayer earned over $10,000. This treaty benefit is lost if a nonresident becomes a resident for tax purposes.

The Canada treaty also has an exception to the general rule that other treaties have stating international students and scholars cannot use treaty benefits for dependent personal services. Students and scholars from Canada are allowed to use this treaty benefit.

Publication 597, Information on the United States-Canada Income Tax Treaty, has more information on the treaty's benefits to students and scholars from Canada.