Is it necessary to file Form 8833?

[CrownRoyalForever]

I am a dual citizen and Canadian govt employee. Each year, I’ve filed a Form 8833 to exempt my salary under Article XIX of the CAN-US Tax Convention.

However, I recently read that filing 8833 is not necessary when:

“(b) when a treaty reduces or modifies income derived from dependent personal services, pensions, annuities social security and any other public pensions of artists, athletes, students, trainees or teachers, including fellowship grants and taxable public scholarships;”

Does that mean I can take the treaty position without sending in Form 8833 and just use TurboTax to file electronically?

[nelsona]

Yes. It is very rare that one actually needs to file 8833; you most likley don't need to. And if it prevents you from e-filing just don't include it, even if it is needed.
I view 8833 as an explanation form for IRS, letting them know what I'm doing rather than having them bother me to ask.

So, when I use the treaty, I mail it in with a 1040-X once my return is processed.

[nanics]

Tax Act allows you to E-File with Form 8833. I always include it in order to avoid questions.

[nelsona]

Good to know, thanks nanics

[Canadianbacon]

Fellow dual-citizen and former Canadian (Québec) Gov't employee in the U.S., paid as LES. I had to invoke Article XIX to exempt my gov't salary from U.S. federal and state income taxes (but not from self-employment taxes). Had my CRA/RQ/IRS/DC returns prepared by a cross-border accountant (who used to work with the Embassy and Finance Canada), and has done countless dual-citizen LES filings. His instruction was to file Form 8833 to invoke Article XIX of the treaty.

On Line 5 on which subsection of 301.6114-1(b) requires reporting, I always answered (6): Except as provided in paragraph (c)(1)(iv) of this section, that a treaty alters the source of any item of income or deduction;

The line you quote is from section (c)(1)(iv); however, the enumerated sources/categories there all have their own article in the treaty, and Article XIX (Government Service) is not one of them, which is why I was told to say that indeed 8833 is required per #6:
- dependent personal services (XV),
- pensions, annuities, social security and other public pensions XVIII)
- income derived by artistes, athletes, students, trainees or teachers (XVI and XX)

I attached the annual income statement (knock-off W-2) that we got from HR and a copy of the ID page of my Canadian passport to show that I am a Canadian citizen to Form 8833. Yes, this does require you to file by mail. A tip on this to avoid sending to a random PO box is to use a private delivery service (UPS, FedEx, etc.) and send your return directly to the Austin Tax Service Centre's physical address. That way you get proof delivery and a signature. See: https://www.irs.gov/filing/submission-p ... ervice-pds

[ND]

If one is required to file 8833 and IRS catches a missed filing, IRS is in its rights to impose a USD$1,000 penalty (this rise to $10,000 for corporations).