1042-S from another state when resident alien

Forum|Forum|2 years ago
January 30, 2024
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Hi,

I have a similar question to "Where to enter this 1042-S?" with a new caveat.

I'm a resident of Connecticut (CT) and obtained my green card at the end of last year. I received a small honorarium (3k) from California (CA) which involved remote work and an in-person presentation in CA (stayed there for 4 days). The payers withheld federal and state taxes and sent me a 1042-S.

In addition to filing for a federal tax refund as explained in "Where to enter this 1042-S?" do I have to file returns for both CA and CT? When I do both, I get a significant tax deduction from CT (4.2k) and I owe taxes in CA (3.5k), is this normal even though I went there for only a few days and earned only 3k?

Thanks!

Withholding

Best answer by DaveF1006

Yes, it is not uncommon to owe taxes in one state and pay taxes in another. This is like one hand washing the other. Make sure you prepared your Ca non-resident return first so that the taxes paid in California will be properly credited to your Connecticut resident return. Check your returns though to make the proper allocation of incomes are properly reported between the two states.

Now, let's address how to enter the 1042S, along with getting credit for the tax that was withheld.

To report the 1042-S

Open your return in TurboTax
Click on Wages & Income
Scroll down to All Income
Scroll down to Less Common Income
Scroll down to Miscellaneous Income, 1099-A, 1099-C
Click start
Scroll down to Other reportable income
Answer yes Enter description and amount

To report the US tax paid:

With your return open
Click on Deductions & Credits
Scroll down to Estimates and Other Taxes Paid\
Click on Other Income Taxes
Scroll down Other Income Taxes
Click on Withholding not already entered on a W-2 or 1099

@Crassus77

mnfriedman1

You've raised several questions.

While getting your green card makes you a US resident for tax purposes, you may have already been a tax resident based on other rules, the "183 day test". This gets complicated so you may need professional help. Tax residents are taxable on their worldwide income, no matter where earned. So you would include the 3k with the rest of your US income when filing your 1040. The foreign tax credit is intended to avoid double taxation, in case there is a Canadian liability.

I do not know if Canada requres you to file, but you should be abe to check this online at the CRA website. There is an income tax treaty between the US and Canada that may impact your situation. This is available online at the IRS site.

From a common sense perspective though, I doubt if there is 3.5k of Canadian tax on 3k of income. The same for CT.