1042-S

Forum|Forum|1 year ago
February 28, 2025
13 replies
62 views

I am a resident alien for tax purposes from India. I have a 1042-S with an income code 20; chapter 3; and the boxes 3a and 4a are 04 and 15 respectively. I thought this means that the income is "exempt under tax treaty", but I don't see why it would be under the India-US tax treaty. Should I report it as additional income in TurboTax and pay tax on it?

Secondly, this income is already included in the W2 form for state wages. If I add it as additional income for the federal return on TurboTax, it double-counts it for the state return. How do I fix this?

DaveF1006

Level 15

To clarify, what state?

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idraumrAuthor

Level 2

New Jersey.

DaveF1006

Level 15

To clarify, was the 1042S issued for wages earned from a US employer?

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idraumrAuthor

Level 2

Yes.

idraumrAuthor

Level 2

It depends. I believe $20,000 is the amount of a deferred retirement plan that is treated as pre-taxed dollars for federal returns but not for NJ. This plan should be reported in Box 12 with a letter code.

Specific plans that New Jersey does not allow taxpayers to exclude contributions to include, but are not limited to, plans under I.R.C. § 403(b), I.R.C. § 457, 409A, I.R.C. § 414(h), SEP, Federal Thrift Savings Funds, or Individual Retirement Accounts. Employer contributions to these plans receive tax-deferred treatment. In addition, both employee and employer contributions to SIMPLE IRAs, SEP, and SARSEP plans are included in taxable wages (neither receive tax-deferred treatment).