In w2 of year 21, box 1 (gross income) is empty, as I used a treaty.However,I'd like to be treated as a resident for year 21. My 1042-S has right amount. should I fix w2?

[Anonymous_]

@pk?

[pk]

@Eddie242424 , assuming that the 21 yr. old is an alien ( because she/he  was issued a 1042-S), you need to file on form 1040-NR ( not supported by  TurboTax, but by SprinTax or similar or tax professional ).

Does that make sense  or did I misunderstand your query ?

pk

[Eddie242424]

Hi @pk , I appreciate your answer. I meant in tax year 2021. Sorry, earlier I had to save characters. Let me rephrase:

In my W2 form of the tax year 2021, box 1 (gross income) and box 2 (taxes withheld) are empty, because I used a treaty. However, things changed and thus I'd like to be treated as a resident for tax purposes for the tax year 2021.

My 1042-S of tax year 2021 has the right amount for gross income.

should I contact my previous employer to fix that W2? or should I send it as is, perhaps together with the 1042-S? thank you!

[pk]

@Eddie242424 , sorry for my error.   having read through your explanation , leads me to ask a few other questions ---

(a) are you filing 2022 or 2021 or what ?

(b) when did you enter the country, which country are you a citizen of  ?

(c ) what visa  did you enter with  and what visa are you on now ?

(d) why did the employer issue you both a W-2 and 1042-S -- is it a mistake or what ?  Did they collect FICA, and  federal & state taxes ?  Is this a school or related entity  ot are you on your OPT or what ?

I will circle  back once I hear from  you

pk 

[Eddie242424]

(a) I'm filling for tax year 2021. I did send documents to the IRS before for tax year 2021, but only to declare that I use the treaty (so not the usual 1040/NR but mainly the 1042-S).

(b) I entered the US multiple times throughout the years, but in recent years - in the middle of 2021, and I'm a citizen of Israel.

(c) I entered in mid 2021 on H1b, and I am still on an H1b (although I had to extend it after one year, after switching a workplace).

(d)(1) I am not sure why they "issued" both for me; let me reiterate that boxes 1 and 2 are empty, so not really sure that "issue" means what it usually means, in this case.

(d)(2) They collected FICA, but not federal and state taxes (as I had declared properly that I will use the treaty).

(d)(3) It is a school or related entity, and I am not on OPT nor a student, but I am a nonimmigrant worker (doing research).

looking forward to your answer! thanks a lot!

[pk]

@Eddie242424 , I am assuming that you intend(ed) to raise article 23 of  US-Israel Tax treaty and thereby make your  wages / earnings as a researcher ( for public good ) immune from taxation for two years.   But my worry is that  for researchers  & teachers usually the  visa issued is J visa   NOT H-1B  ( which is usually for employment  and tied to ONE employer at a time.

If your employer treats you as an employee ( under H-1B ), he  will  generally issue a W-2, withholding Federal, State and FICA taxes.  You employer seems like is  covering both ends by issuing you a  blank W-2, withholding  no taxes but complying with FICA regs , and issuing a 1042-S covering the earnings. 

I suggest you get a clarification from your employer  first as to your status  I think you should have gotten a W-2 with no  income taxes withheld if you intend to assert  immunity from income taxation for the federal  side.  The states usually do NOT recognize US tax treaties and proceed with taxing your income anyway.

If you choose to file as a resident then TurboTax can help you prepare  your return ( form 1040  but you will have to buy/ download the 2021  software  and file by mail ).   And there is a possibility that IRS or the State may impose  " failure to file"  penalty if you owe any monies.

Do you need more help  esp. in finding the forms you would need  or any other issue ?

pk

[Eddie242424]

@pk Indeed, using that treaty was my intention back then. I had a way to address this mismatch, but it is anyway maybe not very relevant now, as I want to be considered resident for that tax year 2021.

I think what you wrote here is precise: "I think you should have gotten a W-2 with no  income taxes withheld if you intend to assert  immunity from income taxation for the federal  side"; I already had a discussion with this past employer (just prior to declaring to the IRS that I used the US-Israel treaty), and we concluded my status as non-resident.

I understand your recommendation at the end regarding how to file now with Turbotax (and I already bought the 2021 software), but again my issue is with the W2; must I have a new W2 that has the explicit gross income in that case? or I can use this one that does not have that and still pay the federal and state taxes? sorry if I missed something in your message. Thank you

[pk]

@Eddie242424 , please note that if you file as a resident for tax purposes, you generally cannot raise tax treaty conditions.  It may be safer for you confirm that you had passed the  SPT ( Substantial Presence Test ), you have no intention of staying in the USA and there you are allowed to assert treaty benefits.

Based on your visa ( H-1B ) , not having met SPT in 2021 but meeting SPT in 2022, you probably can ask to be treated as a resident for tax purposes ( it still would not allow you to use standard deduction but may allow you to exclude your income for the year 2021 from US taxation.).

As far as W-2 is concerned , you have a choice of

       (1)  your employer issuing a corrected  W-2 ( W-2c ) -- suspect they will be unwilling because it is late  and because  for W-2 they are required to collect Federal and State taxes )

OR

       (2) using the 1042-S and W-2 to essentially create a corrected W-2  for purposes of filing the return --- IRS has both of these on file

Hope this helps.  

pk