IRS Form 1042-S

3 replies
71 views

I got IRS Form 1042-S. IRS withhold 14% Federal Income Tax from my stipend payments. How can i report ?

pk_Answer

Level 15

@Lalit87 , from your answers , I am assuming that you are here as a trainee/student ( article 21 applies ) and not as a teacher/ researcher ( article 22 applies ).

Thus you have to recognize the income ( US sourced income only ), file a form 1040-NR ( not supported by TurboTax -- use your school's foreign student office suggestion or use something like SprinTax). Note that unlike many other treaties, US-India tax treaty asserts that you be given the same benefits as a US student in similar circumstances. This generally allows you to use standard deduction instead of itemized deductions mandated for 104-NR filers. I would suspect that your case is pretty simple and you may be able to just download the 1040-NR form ( fillable .pdf ) and file by mail.

Note that for a US student , stipend etc. has two components/ expenses -- school fees/tuition which is deductible and living expense which is taxable income . Please consider going over the details of your stipend award letter to be sure.

Is there more I can do for you -- you can add here or PM me ( just no PII -- Personally Identifiable Information ).

Namaste ji

pk

P

pk_

Level 15

@Lalit87 ,

(a) which country are you from -- for Treaty considerations ( India ? ) ?

(b) What visa are you on ? When did you enter the country ? Was this your fist entry ?

(c) Source of your stipend -- is it foreign or from your school or what ? Is it a private stipend ?

(d) Who issued the 1042-S ?

(e) Which state are you in ?

I will circle back once I hear from you ?

L

Lalit87Author

Level 2

(a) which country are you from -- India

(b) What visa are you on ?J1 When did you enter the country ? Feb 2024 Was this your fist entry ? Yes

(c) Source of your stipend -- is it foreign or from your school or what ? Is it a private stipend ?Oak Ridge Associated Universities USA

(d) Who issued the 1042-S ?Oak Ridge Associated Universities USA

(e) Which state are you in ? Maryland

Thanks !

P

pk_

Answer

Level 15

@Lalit87 , from your answers , I am assuming that you are here as a trainee/student ( article 21 applies ) and not as a teacher/ researcher ( article 22 applies ).

Thus you have to recognize the income ( US sourced income only ), file a form 1040-NR ( not supported by TurboTax -- use your school's foreign student office suggestion or use something like SprinTax). Note that unlike many other treaties, US-India tax treaty asserts that you be given the same benefits as a US student in similar circumstances. This generally allows you to use standard deduction instead of itemized deductions mandated for 104-NR filers. I would suspect that your case is pretty simple and you may be able to just download the 1040-NR form ( fillable .pdf ) and file by mail.

Note that for a US student , stipend etc. has two components/ expenses -- school fees/tuition which is deductible and living expense which is taxable income . Please consider going over the details of your stipend award letter to be sure.

Is there more I can do for you -- you can add here or PM me ( just no PII -- Personally Identifiable Information ).

Namaste ji

pk