Deductions & credits
To answer you questions:
- Unless the Form 1040-S is showing U.S. Income tax withheld you do not need to mail in the form with your return.
- If the 1042-S code in Box 1 is 16 the amount on the form is classified as a Scholarship or Grant. If the tax rate entered into box 3b is “00.00”, the exemption code “04” is used to indicate “Exempt under tax treaty”. Exempt Code “00” may be used to indicate that a tax rate greater than zero has been applied.
If the income codes are 17,19, 20 the amount is for wages. If the income code is 23 the amount is Other income.
What income code in in Box 1 will determine how to Treaty adjustment/
