Canadian with US patent royalties - do I need to file in US?

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Canadian with US patent royalties - do I need to file in US?

Post by erathia » Sun Apr 08, 2018 11:47 am

I'm a Canadian citizen that went to graduate school 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 MA 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!

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