How to file tax exemption on German-based stipend for J1 resident alien

[fmkey]

I was in the US from mid 2018 until mid 2020 and qualify as a resident alien based on the substantial presence test. My partner had a regular job incl. W2 payslip for Form 1040. My sole source of income while in the US in 2020 was a tax exempt German research stipend. My German stipend is tax exempt in the US based on the Germany-US tax treaty 20.3 [https://www.irs.gov/pub/irs-trty/germany.pdf] and the saving clause. Following publication 519 [https://www.irs.gov/pub/irs-pdf/p519.pdf] chapter Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens (pg. 48, middle column) I do not need to file Form 1040.

Now, I know friends of mine in the very same situation did not file anything about their stipends (same stipend as I had). However, the example shown on publication 519 page 48 describes an example about submitting "Form W-9 and the required statement to the payer”. It is unclear if the example is about an US source stipend or foreign source stipend (which I think makes a difference).

Could you please let me know, which way I need to proceed? If I need to submit W-9, what do I need to put into field 3, 4 and 7? Do you have a template for the required statement? Can I use TurboTax for this specific use case? Do I need to file ANYTHING else?

Do I need to file for tax exemption of my stipend for my MA state taxes?

Thank you!

[fmkey]

Can anybody out there provide an answer if I need to file anything regarding my German-source tax-exempt stipend?

[LinaJ2020]

I am attaching an IRS video link to show you how to fill out Form W-9.  Click here:  https://www.irsvideos.gov/Business/Resources/HowToCompleteFormW-9

To enter the Germany-source tax exempt income in the program, here are the steps:

• Enter your income under "Other Income" section.  This will generate a taxable event.  See steps below.
• Then, on the next line, enter the treaty-exempt amount as negative amount (e.g. -5000) to offset.
• Download and fill in a Form 8833 to claim an exception.  https://www.irs.gov/pub/irs-pdf/f8833.pdf
• You cannot e-file.  You can still use the TurboTax program to prepare your tax forms, but you need to print them out and submit them to IRS by mail along with Form 8833. 

In TurboTax online,

• Sign into your account, select Pick up where you left off
• To the right upper corner, in the search box, type in "other reportable income" and Enter
• Select Jump to other reportable income
• Next screen, Other Wages Received, select No to continue
• Next screen, scroll down all the way to the bottom, under Other reportable income, select Start
• Next screen, Any Other Taxable Income? select Yes to continue