US China treaty in California.

[xiyanL666]

Hi,

I'm a resident alien in California. I received W-2 and 1042-S from my school. I know that we have the China-US treaty which states that the income within $5k does not need to be taxed. But I've also heard that California does not accept treaties? So I was wondering if I still need to file this??

[pk]

@xiyanL666 , just to make sure that you are indeed a resident for tax purposes :

(a) when did you enter the  U SA with F-1?  Were there any other entries during  the prior years ?

(b) are you married to a US person ( citizen/GreenCard/ Resident for Tax Purposes )?

(c) How did you file your return for 2022.

I ask these questions ( and need answers to ) because  TurboTax supports only the 1040 series of forms  ( Not 1040-NR ).

Generally though most states do not recognize  US-Other country tax treaties.  And California specifically uses  a form to declare the sourcing of  incomes  ( CA or  "other State " ).

I will circle back once I hear from you --yes ?

[xiyanL666]

Hi, I am a resident alien calculated by Glacier Tax Prep. I entered as F1 in 2019, but has been J2 in 2011-2012 which makes me a resident alien. I’m not married. 
I mailed W-2 and 1042s to IRS last year. 

I just wanted to ask if I add “-5000” for the tax treaty at the federal tax, do I need to subtract it at state tax? Thanks!

[Vanessa A]

The US China tax treaty does not apply to your state return. So you would have to add it back to your CA income. 

"The U.S. Supreme Court in considering other international bilateral treaties on taxation has, on several occasions, concluded that these treaties do not extend to the states." Tax Notes

[xiyanL666]

How should I add it back to my CA income? Like what’s the step-by-step procedure in TurboTax? Thank you!

[DaveF1006]

Go to the State Taxes tab in your return and begin working on your California return. At some point you will reach a screen that says Here is the Income California handles Differently. In this screen go to:

• Wages 
• income Exempted by US Tax Treaties

[monicag123]

Hi, why can't I find this form on the desktop version? 

[pk]

@monicag123 , what form or are you talking about the screen shot  shown by @DaveF1006  for California ?   Please  elucidate  and one of us can help you .  

Are you trying to add-in  for California purposes, amounts excluded by tax treaty ?  or what?

Will circle back once you have answered, please.

[monicag123]

I can't find the "Income Exempted by Tax Treaty" form on CA tas return on desktop version.

[pk]

@monicag123 , I just checked, it does exist but slightly different format.

 While in  California ,  some where it puts a screen that says   California  Federal ..... Next it comes  with the screen  " Here's income that California handles different ... ". The list that shows up , go down quite near the bottom you have Miscellaneous and in this category you will see  "Foreign Income of NRA .... "   Think this is the one you are talking about.

 Let me know if this solves your issue.  Even if not  please come back and I will  work on it 

pk