What Is Schedule OI on Form 1040NR and How Do You Complete It?

Nonresident aliens filing a U.S. tax return using Form 1040NR must complete Schedule OI (Other Information), which gathers details about residency, foreign income, and tax treaties that may impact tax obligations.

Accurate reporting on Schedule OI ensures compliance with IRS rules and allows taxpayers to claim treaty benefits. Errors or omissions can cause delays, additional scrutiny, or denial of treaty benefits.

Reporting Foreign Address

Nonresident filers must provide their permanent foreign address, not just a mailing address. This is where they maintain a home or primary ties outside the United States. The IRS uses this information to assess tax residency and determine eligibility for treaty benefits or other tax provisions.

The form requires the street address, city, province or state, postal code, and country, with the country name written in full, such as “United Kingdom” instead of “UK.” If the format differs from U.S. conventions, it should be entered as accurately as possible to match local standards.

An incorrect or incomplete foreign address can delay processing or cause issues with IRS correspondence. If a taxpayer moves after filing, they should update their address using Form 8822. Nonresidents cannot use the IRS online change-of-address tool, making accuracy crucial.

Days of Presence in the U.S.

Nonresident aliens must track their days in the U.S., as this affects tax status. The IRS applies the substantial presence test, which counts all days in the current year, one-third from the previous year, and one-sixth from two years prior. If the total reaches 183 days or more, the individual may be classified as a resident unless an exception applies.

Schedule OI requires nonresidents to report the exact number of days spent in the U.S. during the tax year. Even partial days count. Exceptions exist for certain visa holders, including students on F, J, M, or Q visas, and professional athletes in charitable events. These exceptions must be documented to avoid misclassification.

Failure to report days accurately can result in incorrect tax treatment or penalties. The IRS may request passport stamps, travel records, or flight itineraries for verification. Keeping detailed records of entry and exit dates ensures compliance and prevents disputes.

Listing Treaty-Based Exclusions

Tax treaties between the U.S. and other countries can provide exemptions or reductions in tax liabilities. These agreements override general IRS rules in specific cases. Schedule OI requires taxpayers to disclose any treaty-based positions they are claiming.

To claim a treaty benefit, individuals must reference the specific article of the tax treaty that applies. Many treaties exempt certain types of income, such as wages earned by students and researchers or pensions from foreign sources. For example, the U.S.-China tax treaty exempts students from China from U.S. tax on income from personal services up to a specified amount. The U.S.-U.K. treaty prevents double taxation on social security benefits.

The IRS may require additional documentation to support treaty claims, such as Form 8833, which is mandatory when claiming exemptions that significantly affect taxable income. Failure to properly disclose treaty-based exclusions can result in penalties or denial of treaty benefits.

Disclosing Foreign Income Items

Nonresident aliens are generally taxed only on U.S.-sourced income, but certain foreign income must still be reported if it is connected to U.S. tax obligations. Schedule OI requires clear disclosure of such earnings.

Taxpayers must specify the type of foreign income received, such as wages, dividends, interest, rental income, or business profits. The IRS expects detailed reporting, including the country where the income was earned and whether foreign tax was paid on it. If foreign tax was withheld, taxpayers may be eligible for a foreign tax credit or deduction under Section 901 to reduce their U.S. tax burden. Proper documentation is necessary to avoid double taxation and ensure compliance.