Urgent) Resident Alien with Tax treaty

[Scott777]

Hello, 

I have a few questions about my situation. As you know you need to file it as soon as possible. Could you please answer these questions?

I have received W-2 and 1042-S (income code: 20) form.

On the 1042-S form, there is only income gross, and there is No tax withheld (box 7 and 10 are 0). And the amount is $2000 and I think this is from the tax treaty that I got last year. I am NOT claiming Tax-treaty. I have done the tax treaty last year and I want to know if I should put this information when I am filing tax.

1. When box 7 and 10 are 0, I don't need to report the 1042-S form?

<https://ttlc.intuit.com/community/retirement/discussion/re-turbotax-does-not-directly-support-the-fi...>

2. I found I need to put gross income on 1042-s form as 'Other Income' so should I?

<https://ttlc.intuit.com/community/taxes/discussion/correct-way-of-reporting-1042s-form-federal-tax-w...>

3. But some of them said you should report the amount of income (exemption) as a negative.

<https://ttlc.intuit.com/community/taxes/discussion/how-to-file-taxes-with-1042-s-income-code-20-resi...>,

<https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-china-us-tax-treaty-exemp[pro...>

4. And also I found a post saying that you should put the both of information. Other income as a positive amount and Tax-treaty as a negative amount.

<https://baihuqian.github.io/2019-03-11-submit-1042-s-in-turbotax-when-filing-as-resident-alien/>

5. My home country is South Korea

I am really struggling with many different ideas. Please make it clear for me.

[Opus 17]

Why do you have both a 1042-S and a W-2?  Did your residency status change during the year?  You probably need to file as a dual-status alien, that's a little tricky, and you might want professional help. 

[Scott777]

Yes, the residency status changed last year. I don't think I have to do the tricky one. Because you can still get the tax treaty even if you are a resident alien, moreover, I am a student. 

[Opus 17]

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@Scott777 wrote:

Yes, the residency status changed last year. I don't think I have to do the tricky one. Because you can still get the tax treaty even if you are a resident alien, moreover, I am a student. 

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If you have a tax treaty that says you are not a dual-status alien then you need to follow the terms of the tax treaty.  Turbotax can't handle a 1042-S so you may need to prepare your taxes by hand.

If you are a dual status alien, you also need to do at least some manual work.  You would use Sprintax.com to prepare a 1040-NR for the non-resident income and you could use Turbotax to prepare the 1040 for your resident income, then you have to combine them in a specific way that I don't have at the top of my head.

@pk may have the right expertise in international tax matters. 

[Opus 17]

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@Scott777 wrote:

Yes, the residency status changed last year. I don't think I have to do the tricky one. Because you can still get the tax treaty even if you are a resident alien, moreover, I am a student. 

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I don't think you said your home country, which also will make it difficult to help you. 

[Scott777]

Thank you for your answer.

Yes, that is my question.

As I mentioned, I had a tax treaty last year and that is the reason why I received 1042-S form, it only has the information about the Tax treaty. I know that Turbotax can't handle a 1042-S, but I found 4 different kinds of method that I could follow, and I put the links up there. 

And my question was 'Which method I should follow?'

My home country is South Korea.

[THA757]

Hi @Scott777 , which method did you follow finally? 

[DaveF1006]

If there is a gross income amount reported in Box 2 in a 1042S, this should be reported as income even though there is no other information reported elsewhere in the form. The only exceptions if there are exemption codes in Box 3 or Box 4. You would not add gross income to your form if you have an amount in Box 2 of the 1042S.

This is the way this should work in the real world but if you think this 1042S was issued because of the treaty exemption you took last year, then you will need to report the 1042S and then subtract the income. if this was issued by the employer, i don't under their reasoning for placing this on a 1042S to begin with because it shouldn't be income to you. Here is how to report and then subtract the income.  it does involve entering positive and negative values.

1. Open your return in TurboTax 
2. Click on Wages & Income 
3. Scroll down to All Income 
4. Scroll down to Less Common Income 
5. Scroll down to Miscellaneous Income, 1099-A, 1099-C 
6. Click start 
7. Scroll down to Other reportable income 
8. Enter description and amount as follow. 1042S and the amount.
9. Now in the box below, 1042S issued because of a tax treaty exemption in the prior year. Now enter the amount with a minus sign in front of the amount. This will negate the gross income because this should not be taxable income to you.

@Scott777