MA State Return

[Tax_question10]

Hi we trying to file taxes through 

I am US citizen and my spouse is on F-1 Visa since Aug 2017. My husband have got a 1042-s form(tax treaty). 

For MA state tax return "Income Exclusion for Massachusetts" Can we select "Resident of a foreign country that has a tax treaty with the U.S." and enter the amount of tax treaty in Exempt student wage of salary income.

Thanks for your time.

[MarilynG1]

Yes, you can select 'Resident of Foreign County with Tax Treaty' for your husband's 1042-S in Massachusetts.

With an F-1 Visa, he is not yet considered a Resident, until his sixth year in the US.

Click this link for more Tax Tips for Resident and Non-Resident Aliens. 

[Tax_question10]

@MarilynG1  Thanks 

But he is married to a US citizen and filling taxes married filing jointly will he NOT be considered as Resident for tax purposes. 

Thanks 

[MarilynG1]

Yes, he can be considered as a Resident on your joint return.

You will need to mail your return and attach a statement if you choose to do this.

Click this link for more info on US Citizen Married to F1 Visa Holder. 

[Tax_question10]

@MarilynG1 

So if he is considered as Resident for tax purposes in that case can we claim Income exclusions for MA by selecting "Resident of a foreign country that has a tax treaty with the U.S. and enter the amount on1042-S(tax treaty)    

[MarilynG1]

No, if he is considered a Resident for tax purposes, report the 1042-S income under 'Scholarships' in the Education section, if the form is a Code 16. 

If he has no Education Expenses, it will be reported as 'Other Income' in your Federal return, and not be eligible for tax treaty exclusion in Massachusetts as a Foreign Resident. 

Any tax paid on the 1042-S are reported under 'Estimates and Other Taxes Paid'.

Click this link for detailed info on Reporting 1042-S Income. 

[Tax_question10]

Hi Thanks 

@MarilynG1 

Yes the Income code on 1042-S is 16. We are unable to figure out where to input the 1042-S income  under 'Scholarships' in the Education section.

and there is no tax paid on 1042-S income. 

Can you please send a picture how to input the 1042-S income in Education section. 

Thanks 

[MarilynG1]

In the Education Section under 'Deductions & Credits' add your husband as a Student. 

Enter any Education Expenses (with or without a 1098-T), then choose 'Other Scholarships' (screenshot).

[Tax_question10]

Hi @MarilynG1 

Thanks 

Last Year we entered the 1042-S(with code16) form as Other reportable Income Under Income. Will it make any difference do we need to amend the 2019 tax return? 

[MarilynG1]

You could enter the 1042-S Income in the 'Other Income' section, as you did last year.

If you had no Education Expenses to offset any of the income, that would be the best place to enter it.

It all ends up being 'taxable income' anyway.  

'

[Tax_question10]

Hi 

@MarilynG1  Thanks 

What specific things do count in  Education Expenses?

[ToddL99]

From  What are qualified education expenses for the American Opportunity and Lifetime Learning credits?:

These expenses qualify, as long as they are required to enroll in or attend a qualified educational institution:

• Tuition, if paid to the institution
• Student-activity fees, if paid to the institution
• Books, supplies, and equipment, if required to be purchased from the institution as a condition of enrollment or attendance (Lifetime Learning Credit)
• Books, supplies, and equipment, regardless of where purchased (American Opportunity Credit)

Fees paid for non-credit courses and sports (or similar activities) don't qualify unless:

• The course or activity is included in the student’s degree program, or
• The course helps the student acquire or improve job skills (Lifetime Learning Credit only)

These expenses are not considered qualified education expenses for either credit:

• Tutoring
• Housing, room and board
• Insurance, including student health fees
• Medical or dental expenses
• Transportation
• Entertainment, babysitting, and other personal expenses

Qualified education expenses paid on behalf of the student by someone other than the student (such as a relative), are treated as paid by the student. Qualified education expenses paid (or treated as paid) by a student who is claimed as a dependent on your tax return, are treated as paid by you.

Related Information:

• What are examples of education expenses?