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F1 Resident alien with 1042-s with 0 tax rate

Forum|Forum|6 years ago
March 4, 2020
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Hi I am a F1 student who stayed in U.S. for more than 5 years this year, so I have to file as a resident alien. I am currently doing a fellowship at my University, I only get a 1042-S from school, and my tax rate is 0.(income code 16, tax rate 00, exemption code 04). University didn't withhold any tax for me.

Lest say I made $8,000 from school with a 0% tax rate.

I enter my 1042-S for wages under other miscellaneous income for $8,000, and I also enter my treaty exemption under as other miscellaneous income as a negative number.(-5000). Now my total income is $3000. I don't know if I can just file this online or do I need to complete the 8833 like this post said.or other forms and mail them in paper. Thanks!

Deduction

Best answer by klehnhardt

Thank you for the additional information.

Article 20(b) - A student, business apprentice or trainee who is, or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first- mentioned Contracting State solely for the purpose of his education, training or obtaining special technical experience shall be exempt from tax in that Contracting State with respect to:

(a) payments received from abroad for the purpose of his maintenance, education, study, research or training;

(b) grants or awards from a government, scientific, educational or other tax-exempt organization.

The $8,000 is exempt from taxation and should be entered on LIne 21 as a negative number.

K

klehnhardt

You are correct you will need to mail in your return.

You would enter your foreign wages by the following:

Enter foreign wages in the Search Magnifying Glass in the upper right hand corner of the screen
Select foreign wages
Answer the questions on the screens

Because of the U.S. China Treaty some of your income is not taxable and as you indicated, you would enter the amount as a negative amount on line 21 with the description "Form 8833".

You would then Complete Form 8833 and you would be required to mail in your return with the Form 8833 attached,

E

elsielvaAuthor

Hi, I dont have foreign wage so I guess I dont need that. When I file for federal and state return, do I need to attach 1042-s as long as 8833 ?

Also I saw some post saying since my 1042-S has 0 tax rate meaning this scholarship is not taxable. Do I need to revise the negative amount to -(5000+1042S amount ie 8000）= -13000 since by article 20(b) of the USA-China tax treaty scholarship is not included in the 5000 treaty.

K

klehnhardt

To answer you questions:

Unless the Form 1040-S is showing U.S. Income tax withheld you do not need to mail in the form with your return.
If the 1042-S code in Box 1 is 16 the amount on the form is classified as a Scholarship or Grant. If the tax rate entered into box 3b is “00.00”, the exemption code “04” is used to indicate “Exempt under tax treaty”. Exempt Code “00” may be used to indicate that a tax rate greater than zero has been applied.

If the income codes are 17,19, 20 the amount is for wages. If the income code is 23 the amount is Other income.

What income code in in Box 1 will determine how to Treaty adjustment/

K

klehnhardtAnswer

Thank you for the additional information.

Article 20(b) - A student, business apprentice or trainee who is, or was immediately before visiting a Contracting State, a resident of the other Contracting State and who is present in the first- mentioned Contracting State solely for the purpose of his education, training or obtaining special technical experience shall be exempt from tax in that Contracting State with respect to:

(a) payments received from abroad for the purpose of his maintenance, education, study, research or training;

(b) grants or awards from a government, scientific, educational or other tax-exempt organization.

The $8,000 is exempt from taxation and should be entered on LIne 21 as a negative number.