1099 - INT for a NRA

[chanchanu7]

I came to US in Aug 2021 on F1 visa and am currently on my H1B Visa since October 2023.

I am filing my taxes for the year 2023 as a Non - Resident Alien.

I had a question regarding 1099 - INT, I got 4 1099 - INT, 3 from banks and 1 from IRS. I read on IRS website  (https://www.irs.gov/individuals/international-taxpayers/nontaxable-types-of-interest-income-for-nonr...) that NRA won't be taxed on INT from banks or government. Is this true? My tax preparer is saying otherwise.
IRS states that if the income is not from US trade or Business it can be excluded, my tax preparer says as the bank is in the US it'll be considered as US Business.

If I report this income it will get added to my Taxable income and will give me less refund or is it the case even if it is reported as Income on my 1040 - NR, I won't be taxed on it?

[MarilynG1]

If you are filing as a Non-Resident Alien, seek guidance on your question from our partner Sprintax to prepare your return.

Generally, interest income is added to your other taxable income, as your preparer mentioned.  However, If NRAs use Form 1040-NR, U.S. Nonresident Alien Income Tax Return, to report their income, then such nontaxable interest income shall not be reported anywhere on Form 1040-NR except in response to question L on page 5 of Form 1040-NR.

Here's more info on Tax Tips for Resident and Non-Resident Aliens. 

[chanchanu7]

Hi @MarilynG1 ,

I just reviewed my 1040NR form sent by my Tax Preparer, he has entered the 1099-INT income on Line 2b Taxable Interest, but as per this: https://www.irs.gov/pub/irs-pdf/i1040nr.pdf


"Page 18: Line 2b
Exception 3: Don’t include on line 2b
interest from a U.S. bank, savings and
loan association, credit union, or
similar institution (or from certain
deposits with U.S. insurance
companies) that is exempt from tax
under a tax treaty or under section
871(i) because the interest isn’t
effectively connected with a U.S. trade
or business."
The interest from my Bank should not be entered on line 2b right, I also don't see this option: Form 1040-NR except in response to question L on page 5 of Form 1040-NR.

Can you please help

[MarilynG1]

As I said earlier, you need to deal with your tax preparer on your 1040-NR.

We don't handle those returns in this forum.