Get your taxes done using TurboTax

Exempt income under the treaty and excluded nonfinancial payment. What you don't say is the income code, I am guessing scholarship income. If so, we can follow the advice of @KrisD15 above to enter the income but then we need to subtract it back out.

1. Open to federal  Deductions & Credits
2. Locate EDUCATION
3. Select Expenses and Scholarships
4. Tell the program you don't have a 1098-T
5. The program should tell you that you are not eligible for an education credit 
6. Continue to enter scholarship on the screen that asks if you received a scholarship you have not yet reported.
7. Select YES, a drop-down allows the entry for the scholarship reported on 1042-S.

This will put your income on Sch 1 now we need to remove it. You can subtract the income and claim tax treaty benefit as the reason. Follow these steps:

1. Open to federal income
2. You may need to show other income or less common income
3. Locate Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, Start
6. Other taxable income?
7. Select YES
8. Description Tax Exempt under treaty
9. Amount, enter your negative amount -use a minus sign in front.
10. Continue

Lastly, determine if you need to file Form 8833.  The payee does not have to file Form 8833 for any of the following situations:

1. The payee can claim a reduced rate of withholding tax under a treaty on interest, dividends, rent, royalties, or other fixed or determinable annual or periodic income ordinarily subject to the 30% rate.
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.
3. The payee can claim a reduction or modification of taxation of income under an International Social Security Agreement or a Diplomatic or Consular Agreement.
4. The payee is a partner in a partnership, or a beneficiary of an estate or trust and the partnership, estate, or trust reports the required information on its return.
5. The payments or items of income that are otherwise required to be disclosed total no more than $10,000.

If this describes your situation, you are in good shape, add the income, subtract the income, e-file.

@Elianabc