Hello everyone,
I am an international student in the US since 2017. But I got some on-campus jobs in 2018 and 2019. I used TurboTax to file my taxes. Everything went perfectly fine and there was no error appeared. However, I recently found out that I accidentally received American Opportunity Tax Credits for these two years. I didn't notice that AOPC is only for U.S citizens and permanent residents. TurboTax did not warn me anything so I didn't know that issue. So, what should I do now? Should I use a different platform like Sprintax to file the tax if I work in 2021? Also, do I need to return the AOTC, and how? Will this issue affect me in the future if I begin my H1B/green card sponsorship? Please help. Thank you so much!
Most international students on F type visas are considered non-resident aliens even though they live in the US.
https://www.irs.gov/individuals/international-taxpayers/exempt-individual-who-is-a-student
Non-resident aliens are not allowed to claim certain tax benefits. They must also file a form 1040-NR instead of a regular form 1040. Turbotax does not support 1040-NR. Turbotax partners with Sprintax to offer form 1040-NR for non-resident aliens, or you may use a different provider.
Your legal requirement is to file amended returns for 2017, 2018 and 2019 using form 1040-NR and repaying any tax credits you previously received that are disallowed. If you have not filed for 2020, you should file form 1040-NR, if you already filed a regular form 1040, you should also amend your 2020 return. For 2021 you should certainly file a 1040-NR.
If you don't file amended returns to repay any improper credits, the IRS generally has 3 or 6 years to audit you and demand repayment. If you don't voluntarily file the amended returns and repay the credits, you are essentially betting that you can run out the clock on the IRS before they catch you. You will likely need to prepare your amended returns by hand using the correct year forms and instructions, or see a professional tax preparer, because you probably won't be able to access the older versions of software for form 1040-NR.