Does first-year resident alien should file 1099-G ?

[phdstudent]

Hi, I am a first-year resident alien (filed as a nonresident in TY2019, but filed as a resident from TY2020), and I got 1099-G from the TY2019 filing. I suffer an issue in filing my tax because there is no STANDARD Deduction in the 1040-NR-EZ file. Similar to my situation, I found this thread [link], but I wasn't sure whether it is for the previous tax year, or it also applies to the TY 2020. Specifically, I found the IRS Publication 525, and based on worksheet 2, I think I may also have a possibility to report the state tax return as taxable. 

So, I post this question to figure out
(i) whether my 1099-G for the first-year resident alien (previously filed as a nonresident alien with 1040-NR-EX) is taxable or not and,
(ii) what is the right way to do with TurboTax? Here are some candidates that I can imagine:

- Do not attach 1099-G there (I don't think that's the right way, but who knows)

- Simply select 'I did standard deduction', although I have some itemize deduction due to the tax agreement between the US and my home country?

- Select, 'itemize deduction' and then 'please file all as taxable'

(I cannot go over with the itemized deduction option because I didn't even file Schedule A and others in the TY2019)

[pk]

@phdstudent  what was the 1099-G for ?   Which country are you from?  When did you enter this country with F-1 and what visa are you on currently?   You earnings are  from the school or OPT or grant or scholarships or what ?   Is the 1099-G from the State ( and if so which state?   Are you married  and if so is it to a US citizen/Resident or NRA?

[phdstudent]

@pk 

I entered from three years ago with an F-1 visa status, but TY2020 is 6th calendar year as J,F,M,Q visa holder, so I am a resident alien (passed the date test) from TY2020.

My earnings from school + CPT full time internship, and 1099-G for the state tax return from California TY2019 (from CPT internship); last year, I filed with 1040-NR-EZ because I was NR at that time.

[pk]

@phdstudent , when you enter the  details in TurboTax, tell it that you have a 1099-G to report.  This will then ask  if you  itemized  in 2019  -- say yes.  Thereafter it should do a computation to see if there is any "recoveries" ---  you got the benefit of using  XXXX for  state taxes and  actually ended up ( after refund ) paying YYYY and compare this to sales tax for your gross income etc.  Hopefully none of it would be taxable to Feds -- the state does not tax the refund.    TurboTax will all this for you -- not to worry

[phdstudent]

@pk, I think this answer doesn’t applicable to my current situation. Specifically, once I select “itemized deduction”, then it asks various questions, even AMT and  Excess advance premium tax credit (schedule 2), which I never handled in the previous tax year due to my NR status for the previous year. As I noted, I filed TY2019 as NR and need to file 2020 as R, with 1040 for the first time. Could you re-check and let me know how I can fill out the schedule 2 related questions, if it is the right way to fill out?

[pk]

@phdstudent  , you should be able to say NO to all of this  "junk"  but let me try out in my copy --- but it will be tomorrow morning -- my machine is already off for the night .  Can you wait ?  I will wait for a few minutes  for your reply 

[phdstudent]

@pk   Oh, of course. feel free to take your time. I will wait for your guide, then.

(by the way, if I did not put any value to any of the ‘not applicable’ fields, like AMT and some of the itemized deduction items, then it finally tells me that it is non-taxable, but I am not sure whether I did correctly or not; I know that the final correct response should be non-taxable, by the IRS regulation, but not sure about detailed steps, because there is no option that I can mark “filed 1040-NR last year”)

[pk]

@phdstudent , yes I tried out the scenario and TurboTax does as expected ( using fake numbers of course ).  You will need details of your 2019 return  such as Gross income, taxable income, schedule-A total,  state and other taxes claimed etc.  Most of the time , especially in  states where sales taxes, property taxes  etc. are quite high, the refund  is not taxable i.e.  recoveries is zero.  You can rest easy

pk

[phdstudent]

@pk  Thanks for your follow-ups.  I think there are two different things to note.

 (i) anyway, for the first-time 1040 filer as an R, the 1099-G due to the state tax refund is non-taxable. So, in what sense, I think the result would be non-taxable, to the best of my knowledge. However, I failed to find such option on the program (all right, I will manaully type one by one, then)

(ii) however, to make it correctly in TurboTax, I need to provide all other details, as you mentioned. The issue is *There are NO Schedule-A/B/2/etc* because I filed with 1040-NR-EZ, not 1040, in the previous tax year (the difference in line is acceptable, but more importantly, I don't have the NUMBERS for those fields). If it is okay to just leave all the mismatched parts as zero, then please let me know (I think it also needs to be guided by TurboTax, by the way).

[pk · Accepted solution]

@phdstudent , I understand your issue  as follows -- you filed a form 1040-NR-EZ for 2019, you do not have a copy of this any more and did not file a schedule-A ( itemized deduction ).  Assuming that you had  XXXXX withheld for state taxes in 2019, and  not having any other deductions ( charitable  contribution,  medical expenses etc.  ), you probably reported  XXXXX as your itemized deduction.  The State then refunded you YYYY as over paid taxes.   SDo for the purposes of reconciling form 1099-G from CA, you would need to enter your gross income ( from W-2 ), your State taxes withheld ( from W-2)  while answering questions about the 1099-G.  This should then  result  in non-taxability of the refund  in 2020.   I had to go search for a copy of the 2019 1040-NR-EZ to see the line where this was reported  ( Line 11 ) -- this particular form has not been released for 2020 yet.

Does this solve your issue ?

[phdstudent]

@pk  Correct. This is the link for 1040-NR-EZ for TY 2019: https://www.irs.gov/pub/irs-prior/f1040nre--2019.pdf

I think the lines would be one of 10, 11, 17, 19, and I may provide all the others as zeros if I understand correctly.

[pk · Accepted solution]

@phdstudent Yes, the  deduction is on line 11, gross income is on line 10  and the rest of the items  mentioned earlier should be zero

Is there more I can do for you ?

[phdstudent]

@pk  Thanks for your follow up. It is clear now!  (I was mainly wondered about the AMT and the other cells that are in Schedule 1/2/A/B )