Schedule NEC

You may need to fill out Schedule NEC if you're a non-resident alien with US source income. Read on to learn more about IRS Form Schedule NEC.

Schedule NEC is part of Form 1040-NR, a federal income tax return for non-resident aliens with income not effectively connected with their US trade or business. This tax return section is for non-residents whose income does not meet the IRS’ Effectively Connected Income (ECI) test. ECI is a tax classification that includes corporate interest, dividends, royalties, capital gains in excess of capital losses, prizes, awards, and certain gambling winnings. It’s generally taxed at a flat 30% rate unless your country of residence and the United States have a treaty that reduces the rate.

For example, suppose you are a Netherlands resident and receive dividends from a US corporation. This income may be subject to a 15% tax rate under a treaty between your home country and the United States. Check out Tax Treaty Table 1 on the IRS website to find the appropriate treaty rate, and report it in Schedule NEC on page 4 of Form 1040-NR. Another example of this type of income is scholarship income, which can be taxed under IRC Section 16 if you are a student. It is important to check with your university or scholarship program to determine whether this income is taxable under the code.

NEC’s performance halls are available for rent for rehearsals, performances, recordings, and other events. The Scheduling Office will review your request and assign a venue that best meets your production and technology needs. All requests are subject to COVID-19 health and safety requirements. You can make a reservation online or by contacting the individual departments, studios, and faculty available in your desired location.

How to Fill Out Schedule NEC

How to Fill Out Schedule NEC?

  • The first step in filing Schedule NEC is to determine if you are a non-resident alien with U.S.-sourced income. This is done by checking the box on Page 4 of Form 1040NR that says “Non-resident Alien with Non-Effectively Connected Income“.
  • Then you will be prompted to enter your income. This information will include your total income for the year. You will also need to include your deductions for federal and state taxes and any social security or Medicare taxes you have paid. Once you have entered all of this information, you will be able to compute your taxes. You can then edit and save the information on your computer. 
  • You’ll also need to compute the tax and withholding that you owe. This is usually a flat 30% rate, but you can reduce the tax rate using treaty provisions between your home country and the United States.

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