If you received a form 1099 reporting the income but it is not taxable in the United States, the you should enter the income on your return, but then put a negative entry for the amount of the income in the "Other Income" section on your tax return, along with an explanation as follows:
1. Go to the "Federal" section of TurboTax
2. Click on "Income and Expenses"
3. Find "Less Common Income" and choose the last entry "Miscellaneous Income"
4. On the next screen, "Miscellaneous Income" choose the last entry "Other Reportable Income"
5. Enter a description for your entry (Tax Treaty, [Code #]), and enter the taxable amount you want to exclude from income as a negative number
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