Correct way of reporting 1042s form (federal tax withheld: income code 16) on Turbotax?

[inkwan82]

Hi

I am a resident alien and received both W2 and 1042s (code16: scholarship and fellowship) from school. On 1042s, '3a. exemption code is 00, 3b. tax rate is 14.00, 4a. exemption code is 16, and 4b. tax rate is 00.00'. After searching for several Q&A here and on the web, I am still confused about the way I should report my refund on Turbotax.

On the 1042s form, I have two income information- gross income and federal tax withheld. My question is which one I should report.

1) When I focus on gross income on 1042s (again, this is scholarship from the school), I can report it on 'Wages and Income/Less common income/MISC income/Other income not already reported on a Form W-2 or Form 1099'.

2) Instead, I focus on the amount of 'federal tax withheld' on the form and report it using 'Deductions and credits/Other income taxes/Yes/Other income taxes paid in 2017/Withholding not already entered on a W2 or 1099' option.

3) I do both (1) and (2) simultaneously and the refund is the smallest in this case. I don't understand why...

I am not sure which one is correct. I am a sixth-year phd student and no longer non-resident alien (i.e. resident alien as I already mentioned). At the same time, the tax treaty between my origin country and the US is up to five years. That is, I am not eligible. The amount of Federal refund is much higher for (2) than (1). That way, IRS (is expected to) returns the same amount reported in 'federal tax withheld' on 1042s form (i.e. 14% of gross income reported on the form). When I use the (1), however, the refund estimate is much lower and its calculation does not seem to consider the amount of federal tax withheld.

which one do you think is correct? OR should I do both?

Any suggestion or advice would be really helpful! 

Thanks!

[DianeW]

1-Turbotax does not support form 1042s directly, but you can enter the income based on the income code. 

Because you are a resident alien and you have received a form 1042S where you report the income depends on the income code and why the form was generated.  See page 18 for a description of income code.IRS Instructions Form 1042-S.

This income can be entered as miscellaneous income.  When you sign into your TurboTax account you can follow the steps below.  

1. Select the "Federal" tab in the black navigation bar on the left
2. Select "Income & Expenses"
3. Select "Add more income" button if necessary
4. Scroll and click "See the list of all income" 
5. Scroll to "Less Common Income" and select "show more"
6. Select "Miscellaneous Income"
7. Scroll and select "Other Reportable Income"
8. Click "yes" then enter the description and amount (this will show up on line 21, Form 1040)

2-The entry steps you have in your question is correct.  Enter the federal and/or state withholding here:

• Deductions and credits/Other income taxes/Yes/Other income taxes paid in 2017/Withholding not already entered on a W2 or 1099

3-The results should be correct following the steps above.

You should file your return by mail so that you can attach your Form 1042-S to the return.  

[inkwan82]

Thanks for the answer 🙂 I have another question! Other comments on the similar question recommend 'Other income not already reported on a Form W-2 or Form 1099' instead of 'Ohter reportable income'. Two different options don't make any difference in estimated refund. Do you think they are different substantively?(meaning that one is correct and the other is wrong and may cause a problem in the filing process). Thanks!

[DianeW]

@inkwan82 I advise my method if you are not required to pay social security and medicare tax.

[guherc]

Dear Diane,
I have the same situation. I live in NJ (become a resident alien on July 3rd, 2018) and I have a 1042-S from my previous institution in California. When I follow your method, it results in $1,012 NJ tax due. Would you recommend combining it with W-2?

[Ram90]

I am in similar situation. how did you end up paying NJ taxes for 1042-S?

[KarenJ2]

Are you a resident of NJ?  What is the 1042-S income code?  Is there tax withheld?

[Ruba]

I am in a similar situation. 6th yr PhD student. Resident alien for tax purposes. Received 1042-S form with income code 16.

Do I need to upgradte to Turbo Tax Delux to follow your instructions and add "other reportable income"?

[LinaJ2020]

You do not enter it as Other Income.  You will treat it as receiving a scholarship or fellowship to offset your qualified education expenses if there are any.  If you are prompted to upgrade, please do so.  Here are the steps:

In TurboTax online edition, 

• Sign in to your account, select Pick up where you left off
• At the right upper corner, in the search box, type in "1098t" and Enter
• Select Jump to 1098t
• On the screen, Now Let's gather XYZ's Additional Education Expenses
• Follow prompts
• Next screen, Your Education Expenses Summary, select Edit
• Next screen Here's Your Education Summary, under Tuition, select Edit to enter tuition information

@Ruba

[Ruba]

This is confusing for me. Am I supposed to add the income reported on 1042-S form under 1098t? Those are not the same.

[KrisD15]

IF this is Scholarship income, first enter the 1098-T. Continue through the interview and you will have an opportunity to enter scholarship amounts NOT listed on the 1098-T. Enter it there. 

[zqw1103]

So I filed already before I received this form. Can I file again by including this? Or I can file next year by including this info? Since I already got refunds, if adding this it will be much less.

[EbonyA]

@the way to report any missing information after you have filed, is via an amended tax return. The following FAQ provides those general steps: Amending a return in Turbo Tax.

[rorycunningham78]

I'm a current postdoc at NIH so received a 1042s, but a resident alien for tax purposes. If your only income was through fellowships via NIH, do you put $0 for federal income and all of it down as miscellaneous?

[MarilynG1]

Your 1042-S will be considered Federal Income.  Here's how to enter it:

1. Open your return in TurboTax 

2. Click on Wages & Income 

3. Scroll down to All Income 

4. Scroll down to Less Common Income 

5. Scroll down to Miscellaneous Income, 1099-A, 1099-C 

6. Click start 

7. Scroll down to Other reportable income 

8. Answer yes 

9. Enter description and amount 

To report the US tax paid:

1. With your return open
2. Click on Deductions & Credits
3. Scroll down to Estimates and Other Taxes Paid\
4. Click on Other Income Taxes
5. Scroll down Other Income Taxes
6. Click on Withholding not already entered on a W-2 or 1099