China-US tax treaty, exemption under article 20
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New Member

China-US tax treaty, exemption under article 20

How can I claim the chinese treaty of -5000 of the school stipend as a resident alien can I fill 8833 in the system? I enter a -5000 for the other reportable income, but I mistakenly entered the -5000 in some other category, how can I remove it?
11 Replies
New Member

China-US tax treaty, exemption under article 20

It depends.

There is no special way to remove an erroneous entry. To remove an entry, you will need to go back and review the section related to this mistaken entry. Once you find the entry, you can remove it. (Otherwise, you will need to clear your entire return (if available) under Take me to my return> at the top of the screen select - "My Account" > Clear and Start Over.)

If you meet the SPT and are considered a resident alien, then you will file as a US resident and will need to include all income worldwide on your US income tax return (Form 1040)

Click this link for more information from the IRS on US Tax Guide for Aliens

To will enter any Form 1042-S income as:

  1. If wage income -  other earned income
  2. If Scholarship -  under the education section
  3. If other income  - under other miscellaneous income

and you will enter the amount of the treaty exemption as a negative amount under other miscellaneous income. You may also need to attach Form 8833 to your tax return. (Attaching this form will require that you mail in your return. You will need to select - file by mail under the file tab.)

Since Form 8833 is not supported by TurboTax, here is the link to the IRS Claiming a Tax Treaty Benefit.

To enter your 1042-S for wages under other miscellaneous income:

  1. Click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages and Income”
  3. Next click on "jump to full list" or “I’ll choose what I work on”
  4. Scroll down the screen until to come to the section “Less Common Income”
  5. Choose "show more", then Miscellaneous Income
  6. Choose "Other Income not already reported on a Form W-2 or Form 1099 " 
  7. Select - "Yes" for "Other Wages Received"
  8. After 3 screens, select "Yes" for "Any other earned income".
  9. On screen titled " Enter source of other earned income" - select " Other"
  10. Input the "1042-S wages" and the amount on the next screen

To enter your 1042-S related to your scholarship:

  1. Click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Deductions and Credit”
  3. Next click on "jump to full list" or “I’ll choose what I work on”
  4. Scroll down the screen until to come to the section “Education”
  5. Choose "show more", then Expenses and Scholarships (Form 1098-T)
  6. You will need to choose the student this Scholarship relates to and select "edit"
  7. Under the Education Summary page, select "Scholarships and Grants" - edit
  8. Say "yes" - to question "Did (name) receive a scholarship or grant in 2015?"
  9. Enter amount as "Other Scholarships/Grants/Fellowships

To enter your 1042-S as other miscellaneous income:

  1. Click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages and Income”
  3. Next click on "jump to full list" or “I’ll choose what I work on”
  4. Scroll down the screen until to come to the section “Less Common Income”
  5. Choose "show more", then Miscellaneous Income
  6. Choose "Other Reportable Income" and enter this information here under other taxable income 

To enter your treaty exemption under as other miscellaneous income:

  1. Click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
  2. Next click on “Wages and Income”
  3. Next click on "jump to full list" or “I’ll choose what I work on”
  4. Scroll down the screen until to come to the section “Less Common Income”
  5. Choose "show more", then Miscellaneous Income
  6. Choose "Other Reportable Income" and enter this information here under other taxable income 
  7. You should use a description related to the tax treaty article exempting the income (ie: China-US tax treaty, exemption under article 20) and the exempt amount as a negative number.


New Member

China-US tax treaty, exemption under article 20

I see that California doesn't follow the treaty. How should I fill for the state tax? Thanks!
Level 1

China-US tax treaty, exemption under article 20

For the amount of the deduction then, the US-China tax treaty Article 20 exempts 5000 dollars. Do I subtract this amount from the gross income on my 1042s and then report the remaining amount as total taxable?

Employee Tax Expert

China-US tax treaty, exemption under article 20

You should report the total income, then add a negative adjustment to income to reduce the amount down to the correct taxable number 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 (Treaty code ), and enter the taxable amount you want to exclude from income as a negative number

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Level 3

China-US tax treaty, exemption under article 20

My gross income on my 1042-s form is $2,000 then should I put it as -2,000?? not +2,000?

Employee Tax Expert

China-US tax treaty, exemption under article 20

Correct. For the adjustment, you need to enter the figure as a negative number.

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Level 3

China-US tax treaty, exemption under article 20

Thank you for your answer.

I have a question. But I already got the tax-treaty and received a 1042-s form with $2000 income and 0 tax withheld. I found out that I do not need to report it.

<https://ttlc.intuit.com/community/retirement/discussion/re-turbotax-does-not-directly-support-the-fi...>

 

But I found this one as well.

<https://baihuqian.github.io/2019-03-11-submit-1042-s-in-turbotax-when-filing-as-resident-alien/>

 

And some people also told me that I need to put it as a positive amount.

And I found that you think I need to put it as a negative amount.

 

I am so confused and as you know I need to file it as soon as possible. Please solve this problem. Really appreciate your help.

Level 3

China-US tax treaty, exemption under article 20

Employee Tax Expert

China-US tax treaty, exemption under article 20

TurboTax  cannot offer advice about tax treaty issues.   

 

Perhaps another use, however, with experience can assist.  

 

 

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Returning Member

China-US tax treaty, exemption under article 20

Hey, thanks for your detailed answer.

 

I followed it to fill the federal part, it is fine, but when I kept going to state part, it will show that Form 1-NR/PY Line 11 can't be the 'Negative value', which is '-5000', I have to fix it, but it won't allow me to do so.

Do you have any idea about that?

 

Thank you

New Member

China-US tax treaty, exemption under article 20

Getting the same error here. Did you figure out a solution?

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