I'm a resident alien (From China) trying to understand how to report my two (2) 1042-S Forms with Income Code 16 and Income Code 20. Per the IRS website the income codes are described as:
- Code 16: Scholarship or fellowship grants
- Per the US-China treaty, be used to exemption of a portion of my scholarships from taxes
- Code 20: Compensation during study and training
- This is tax-free income that is not included in my W2
To file my Code 16 1042-S, I followed the instructions:
1. In TurboTax under Federal, click Wages and Income
2. Click Less Common Income
3. Choose Miscellaneous Income, 1099-A, 1099-C
4. Choose Other Reportable Income
5. Enter a description of the treaty and the adjustment as a negative number
I'm not so sure how to to file my Code 20, as the income was not included in my W2. Do I need to follow the same steps at what I did for Code 16 but enter in the income received from my Code 20 1042-S. I notice as I do this, my federal refund goes up. From my understand the income received from my Code 20 1042-S is tax free. Is this right? Or should just not file anything for my Code 20 as it's non-taxable income?
Also, do I need to file a Form 8833? Also would I need to file multiple 8833 forms per 1042-S Form? Per the IRS website, you are exempt from filing the form if:
"Exceptions
The payee does not have to file Form 8833 for any of the following situations:
2. The payee can claim a treaty exemption that reduces or modifies the taxation of income from dependent personal services, pensions, annuities, social security and other public pensions, or income of artists, athletes, students, trainees, or teachers. This includes taxable scholarship and fellowship grants."
