How to Apply 14% Tax Rate on 1042-S Scholarship Income for Resident Aliens

[FrReas]

Hello,

I am a U.S. tax resident for 2024, and I received both a W-2 and a 1042-S form for the year. I am a French researcher currently on an H-1B visa (previously on a J-1 visa). My 1042-S form reflects scholarship income for the months of January and February 2024.

My 1042-S income (code 16) is subject to a 14% flat tax rate as indicated in box 3b. I entered this income as Wage & Income -> Other Reportable Income. However, TurboTax seems to be applying the standard tax brackets to this income, which doesn't reflect the 14% rate.

Could someone help me with the following:

1. How can I ensure that the 14% tax rate is applied to the scholarship income from the 1042-S (Box 2)?
2. If TurboTax doesn't automatically apply the 14% rate, is it possible to manually adjust the tax owed to reflect this rate?

Thank you for your help!

[DaveF1006]

To clarify, is there an amount of federal withholding tax listed in Box 7A?

[FrReas]

Thank you for your response. No, there is no amount listed in box 7A (it is blank).

[DaveF1006]

The issue here is that you can't list a tax requirement on one item of income in the US even though the 1042S dictates the income tax rate should be 14% thus this cannot be manually adjusted.

[FrReas]

Does this means I cannot use TurboTax to file correctly?

[FrReas]

Hello,

I asked clarification from my employer and it turns that they apparently forgot to file box 7a. They sent me an updated 1042-S with the tax withheld. 

I entered this amount in Deduction & Credits -> Income taxes paid -> Other Income Taxes Paid in 2024-> Withholding not already entered on a W-2 or 1099. Is it the correct way to report it?

[DaveF1006]

Yes, this is correct. Be sure to keep a copy of this updated form with your tax return for future reference.