I was in the US from mid 2018 until mid 2020 and qualify as a resident alien based on the substantial presence test. My partner had a regular job incl. W2 payslip for Form 1040. My sole source of income while in the US in 2020 was a tax exempt German research stipend. My German stipend is tax exempt in the US based on the Germany-US tax treaty 20.3 [https://www.irs.gov/pub/irs-trty/germany.pdf] and the saving clause. Following publication 519 [https://www.irs.gov/pub/irs-pdf/p519.pdf] chapter Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens (pg. 48, middle column) I do not need to file Form 1040.
Now, I know friends of mine in the very same situation did not file anything about their stipends (same stipend as I had). However, the example shown on publication 519 page 48 describes an example about submitting "Form W-9 and the required statement to the payer”. It is unclear if the example is about an US source stipend or foreign source stipend (which I think makes a difference).
Could you please let me know, which way I need to proceed? If I need to submit W-9, what do I need to put into field 3, 4 and 7? Do you have a template for the required statement? Can I use TurboTax for this specific use case? Do I need to file ANYTHING else?
Do I need to file for tax exemption of my stipend for my MA state taxes?
Thank you!
