Can Tax Treaty between US and China be applied to scholarships or grants on 1098T

[liuboli]

I am a Chinese student and I am a resident alien for tax purpose. On my 1098T, amount in box 1 is 13175 and amount in box 5 is 17523. Can I apply the tax treaty to exempt the $17523 for tax?

[LinaJ2020 · Accepted solution]

Generally, you should qualify.  However, please read carefully to see if you meet the requirements.  Click here: https://www.irs.gov/pub/irs-pdf/p901.pdf, page 19 under "China, People's Republic of"

To enter the tax treaty exemption in the program, here are the steps:

• Enter your Form 1098-T as usual.  This generates a taxable scholarship amount
• Then enter the treaty-exempt amount as negative amount (e.g. -5000) under Federal Taxes / Less Common Income / Miscellaneous Income 1099A, 1099C / Other Reportable Income
• Download and fill in a Form 8833 to claim an exception.  https://www.irs.gov/pub/irs-pdf/f8833.pdf
• You cannot e-file.  You can still use the TurboTax program to prepare your tax forms, but you need to print them out and submit them to IRS by mail along with Form 8833.