F1 Student Filing as Resident Alien

[freegator]

Hello,

I am an F1 student and started my program in August 2015. It seems that 2020 is the first year I can file as a resident alien with Form 1040. I will file as single. I have a few questions:

1. Can I claim the same standard deduction as a US citizen? If I claim the standard deduction, can I claim tax treaty benefits at the same time? The US tax treaty with my country says $5000 exemption per year "for such period of time as is reasonably necessary to complete the education or training." Though it was not said explicitly if there is a limit of how many years, am I eligible to claim this tax treaty exemption together with the standard deduction?

2. Based on my situation, which turbotax package/edition should I choose to file my 2020 tax return? Does turbotax consider the nationality of foreign nationals and tax treaty articles that apply to maximize the return?

Thanks for your expertise. 

[JeffreyR77 · Accepted solution]

When you file as a resident alien, you can claim the same standard deduction. You can claim your treaty exemption in TurboTax by following these steps:

• With TurboTax open select  Wages & Income.
• Scroll down to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C.
• On the next page select Other reportable income.
• On the page Other Taxable Income enter Tax Treaty Exclusion in the description and enter your exclusion as a negative amount   -5000
•  This will put your Tax Treaty Exclusion on Schedule 1 Line 21 of your 1040.

You will need to file Form 8833 with your tax return.  TurboTax does not support this form. 

You will need to print your return and mail it in with the Form 8833 to claim your treaty exclusion.

Form 8833 

Where to File My Tax Return

[freegator]

Thank you JefferyR77 for your detailed explanations. Is there a rule that explicitly states that when you are filing Form 1040 as a resident alien, you are allowed to claim both the standard deduction and applicable tax treaty benefits? Or is there a rule that prohibits a resident alien filing Form 1040 from claiming tax treaty benefits if he already claims the standard deduction? I just want to be sure that claiming simultaneously the standard deduction and tax treaty benefits is allowed by IRS rules.

In your previous reply, you mentioned "This will put your Tax Treaty Exclusion on Schedule 1 Line 21 of your 1040." Did you mean Line 8 of Schedule 1 instead of Line 21?   

[JeffreyR77]

If you are Chinese and in the US solely for the purpose of your education, you may be able to exclude up to $5,000 of income that you receive from work performed in the US. Under the U.S.-China treaty, taxable scholarships and fellowships are also excluded from income.   This is different than a tax deduction.  

You are correct, you will put your income exclusion on Schedule 1, Line 8 as a negative number 

There is no provision preventing claiming income exclusion and the standard deduction.  For example, US citizens living abroad are able to claim a Foreign Earned Income Exclusion (if they qualify) and still claim a standard deduction for their filing status.

[freegator]

Thank you again for your detailed explanation, JeffreyR77. Is Form 8833 the only additional form that is required to claim tax treaty benefits? Are there any other forms also required if I am only claiming the $5000 exclusion?

When filing Form 1040 with 8833, where should I mail them to? Is the address the same as a regular Form 1040 as looked up by the state I am living in? Or it needs to be mailed to Austin, Texas, the address for a 1040NR? 

[DaveF1006]

Yes, form 8833 should be the only additional form you need to claim this exclusion. When you prepare your return and indicate you wish to mail your returns in, Turbo Tax will supply the mailing address along with the mailing instructions. You can also review this IRS link for an address to send that in. Be sure to pick the address that is listed to send in without payment.

[freegator]

Thanks for the information. When I fill the state return, is Form 8833 required to be included with the state return? Or Form 8833 is a federal form and only required by the federal return?

[LinaJ2020]

I will suggest you to attach the Form 8833 to your state tax return.  Form 8833 is a federal form, however it provides as a supplementary document to support your reporting on the Form 1040 which affects your state tax return.