Tax treaties
Lithuania
Lower tax on investment income
The short answer
The U.S.-Lithuania treaty applies to your return. We already use it to lower the tax on money like interest, dividends, pensions and royalties. It also covers something we cannot put on your return yet: scholarship or grant money for up to 5 years and pay for work you do while you study or train here (up to $5,000 a year) for up to 5 years. A tax professional can claim that for you — ask us to connect you with one so you do not pay more than you owe.
We apply your treaty’s reduced rates to income like interest, dividends, pensions and royalties. Where the same treaty also exempts pay for studying or teaching, we cannot put that on your return yet — we tell you so instead of leaving it out quietly, and a tax preparer can claim it with you.
Tax on investment income
What a US payer withholds on this income, with and without your treaty.
These rates come from your treaty’s investment-income articles, which are separate from its student and teacher rules. Without a treaty, this income is taxed at a flat rate on the gross amount; your treaty replaces that rate with a lower one, and these are the rates we use on your Schedule NEC. Without a treaty the rate is 30%.
| Article | Income | Without a treaty | With your treaty |
|---|---|---|---|
| 11(2) | InterestConditions apply | 30% | 10% |
| 10(2) | DividendsConditions apply | 30% | 15% |
| 10(2) | Dividends (direct ownership)Conditions apply | 30% | 5% |
| 18(1) | Pensions and annuities | 30% | 0% |
| 12(2) | Royalties (patents) | 30% | 10% |
| 12(2) | Royalties (film and TV) | 30% | 10% |
| 12(2) | Royalties (copyright) | 30% | 10% |
A rate marked this way depends on conditions in the treaty — who pays the income, how much of a company you own, or how long you have held it. Where a condition is not met, the rate can be higher. We check this with you before anything goes on your return.
Lower rates, and more with a preparer
What your treaty also covers, that we cannot file yet
This is a real benefit of your treaty. We have read it and transcribed it, and we cannot put it on a return yet — so we tell you it is there instead of leaving it out quietly, because leaving it out quietly is how someone pays more than they owe. A tax professional can claim it with you.
- Article 20(1)scholarship or grant money for up to 5 yearsTime limit: 5 years, counted from the date you arrivedWho it is for: Students · Trainees
- Article 20(1)pay for work you do while you study or train here (up to $5,000 a year) for up to 5 yearsYearly limit: $5,000 a yearTime limit: 5 years, counted from the date you arrivedWho it is for: Students · Trainees
Where an article above shows no conditions, that means we have not published them yet — not that there are none. Ask a tax professional before you rely on it.
Check it yourself
Everything on this page comes from the treaty texts and the IRS tables. Publication 901 lists every country the United States has an income tax treaty with, along with the time limits and yearly caps — so you can check what we say here, including that your country is or is not on it.
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How to read any of this
Four things worth knowing before you look up your own country.
What a tax treaty is
A tax treaty is an agreement between the United States and one other country about which of the two may tax a particular kind of income, and at what rate. It sits on top of ordinary US tax law: where an article covers your situation, its rule takes the place of the ordinary one. A treaty cannot invent a refund — it can only lower or remove tax that US law would otherwise charge you.
The claim is yours to make
Under section 6114 of the tax code, a treaty position on a return is the taxpayer’s own assertion — you are the one telling the IRS that an article covers you. So we do the part that is work and not judgement: read your country’s treaty, work out which article fits your visa and your dates, and fill it in. Then we show it to you and you confirm it, in one tap, before it goes on the return. That last step is not a formality; it is what section 6114 asks for.
A treaty has two halves
They are different rules, they live on different parts of your return, and a country can have one without the other. That is the distinction the four groups in the country list are built on: which half of your treaty reaches your Form 1040-NR.
Exemptions for people — Schedule OI, item L
Articles for students, trainees, teachers and researchers. These take pay, a scholarship or a grant out of your taxable income altogether — usually with a dollar cap, a time limit, or both, and usually only while you hold a particular status. On a Form 1040-NR the claim is made on Schedule OI, item L, where you name the article and the amount.
Lower rates on investment income — Schedule NEC
Articles for interest, dividends, royalties, pensions and social security. These do not take the income off your return; they replace the flat rate US law charges on the gross amount with a lower one. On a Form 1040-NR they land on Schedule NEC, one line per rate.
Finding your country
The country list takes a name in English or Spanish, or the two-letter code the IRS uses. Two things to watch. The IRS’s country codes are not the ISO codes you may know — on the IRS table CN is Comoros, not China — so type the name if you are unsure. And if you hold more than one nationality, or you lived somewhere else before coming to the United States, ask us: which country’s treaty covers you is not always the country on your passport.
Start your 1040-NR
We ask where you are from, work out which treaty article fits, and show it to you to confirm before it goes anywhere near your return.