It depends on a variety of things. The 1042S is taxable income that needs to be reported. After reporting the income, there are a couple of things that could have possibly happened.
- How much is your adjusted gross income for the year. The educational credit could have been reduced if your combined incomes were over $180,000.
- The additional income might push you into a higher tax bracket, resulting in a higher overall tax rate on your income and the $1200.
- How did you report the 1042S? Did you report as a scholarship in the educational section. If you did and your scholarship exceeded your education expense? If you did report it here, some of the $8000 may have been reduced by the amount of your educational expenses.
- How did you report your withholding of $1200. Did you report it in the following manner?
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
Without looking at your return, these are only some suggestions that could have contributed to the reduction of your refund.
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