Reporting a 1042-s income for resident alien, fellow (income code 16), exempt under tax treaty in Form 1040 and NY state tax returns

[Elianabc]

 I am a postdoctoral research fellow on a J-1 visa, and I received a 1042-S form from Columbia University. As a Spanish citizen who has been here for 3 years (i.e., less than 5 years), I am aware of the existence of a Spanish tax treaty regarding the 1042-S, exempting me from both Federal and NY state taxes. The Income code reported in this form is 16, Box 3a "exemption code" of this form is 04; and box 4a "exemption code" is 16.

I´ve been following the method mentioned by @AmyC  to report the income from my 1042-S in the Other Income as follows:

• Click on Federal on the left-hand side of your screen
• Click on Wages & Income
• Scroll down to Less Common Income
• Scroll down to Miscellaneous Income, 1099-A, etc
• Click on Start or Update
• Scroll all the way down to Other Reportable Income
• Click on Start 
• Add a Miscellaneous income item

  • Description: "1042-S"

  • Amount: (Enter the gross income)

• Click Continue and Click Add Another Miscellaneous Income Item
• Enter your treaty exemption as a negative number.:

  • Description: "Spanish Tax treaty"

  • Amount: Enter the negative of the above income

• The amounts will offset to zero.   You will be able to see both entries and descriptions on Schedule 1 of your tax return.

However, I have a few concerns and questions:

1. Employer/Withholding Agent Information:
   This method doesn’t include any fields for entering the employer or withholding agent (e.g., Columbia University), nor does it allow me to specify the treaty exemption codes. Is that a problem for proper filing?

2. New York State Return – Unexpected Refund:
   Although Columbia already applied the tax treaty benefits and withheld $0 in taxes, TurboTax shows that I’m eligible for a $63 refund on my NY State return. This seems confusing, as I didn’t pay any state taxes to begin with.

   • Why is this happening?

   • Should I override or adjust anything to prevent an inaccurate refund?

   • What’s the proper way to file the NY State return in this situation?

Thank you very much for your help!

[DaveF1006]

J-1 Research Fellows, along with scholars, only have a two or three -year exempt period, instead of five. Only J-1 students have a five-year exemption period. 

If you have been living in the US for three years already, your exemption period has expired. You will file as a US resident this year that is subject federal and FICA income taxes. Here is how to report.

1. Go to Wages and income.
2. Less Common Income
3. Miscellaneous Income
4. Other Income Not Reported on a W2, 1099 etc.

There are no treaty benefit codes to be applied this year so no codes can be applied.