How to file taxes with 1042-S issued incorrectly as a Resident Alien
Hey everyone, I'm in a bit of a weird situation with my taxes this year. I've been working at a major tech company while pursuing my masters degree since 2018, so I definitely qualify as a resident alien for tax purposes. The problem is that my university scholarship program paid for my tuition plus gave me about $12,000 in living stipends last year. When they issued my tax forms, they incorrectly gave me a 1042-S form and withheld taxes as if I was a nonresident alien. I've spoken with the international student office and they acknowledged the mistake and fixed it in their system for this year, but they won't help me figure out how to file for last year. I'm trying to use FreeTaxUSA since I've used it before for my regular W-2 income from my job, but I can't find anywhere to input this 1042-S form to get back some of the taxes that were incorrectly withheld. I definitely don't want to pay hundreds for a tax professional if I can avoid it. Has anyone dealt with this resident vs. nonresident alien mixup before? How do I report the 1042-S as a resident alien and get my refund?
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Amara Adebayo
The issue you're facing is relatively common for international students who've been in the US long enough to become resident aliens for tax purposes. As a resident alien, you're absolutely right that the 1042-S withholding was likely incorrect, and you should be able to claim that withholding on your tax return. With FreeTaxUSA, you'll need to report the scholarship income as "Other Income" rather than trying to find a specific 1042-S entry form. Since you're filing as a resident alien, you would report this scholarship income on Line 8 of Schedule 1 (Additional Income and Adjustments to Income). In the description field, you can note "Scholarship income reported on Form 1042-S." The withholding amount shown in Box 7 of your 1042-S should be entered as "Federal income tax withheld" on Line 25c of your Form 1040. This will ensure you get credit for taxes already paid.
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Giovanni Rossi
•Thanks for this info! Quick question - what about state taxes? My university also withheld state taxes on the 1042-S. Would I add those to the state withholding section too?
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Amara Adebayo
•Yes, you would add the state tax withholding from your 1042-S to your state tax return as well. On your state return, look for a section for "state income tax withheld" or similar wording. You'll include the amount from Box 15 (or similar box for state withholding) of your 1042-S in this section, along with any state withholding from your W-2s. For the scholarship income itself, you'll generally need to report it as income on your state return just as you did on your federal return. Most states follow the federal treatment of scholarship income.
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Fatima Al-Mansour
After getting super frustrated with similar tax issues as an international student, I found this AI service that saved me hours of headaches. I was literally about to pay $300 to an accountant but decided to try https://taxr.ai first. You upload your tax documents (like your 1042-S and W-2) and it analyzes everything, then guides you through exactly how to enter them in FreeTaxUSA. It explained that as a resident alien, my university had incorrectly issued a 1042-S instead of a 1098-T, but showed me how to properly report the income and get credit for the withholding. The tool even created step-by-step instructions specific to FreeTaxUSA's interface.
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Dylan Evans
•Does it work for people who've been here less than 5 years? I'm in my third year in the US and my university does the same thing with giving international students 1042-S forms.
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Sofia Gomez
•I'm skeptical... how does the AI know about residency tests and tax treaties? Seems like something only a CPA would understand.
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Fatima Al-Mansour
•It works regardless of how many years you've been in the US. The tool specifically asks about your visa type and when you first entered the US to determine your tax residency status using the substantial presence test. It covers F-1, J-1, and other common student and work visas. The AI is specifically trained on tax regulations, including all the IRS tests for determining residency status. It applies the substantial presence test, considers exceptions for students and scholars, and accounts for tax treaties. While it's not a replacement for a CPA in super complex situations, for common international student scenarios like 1042-S misclassification, it's incredibly accurate.
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Dylan Evans
I just tried taxr.ai after seeing the recommendation here and WOW! I was in the exact same boat - been in the US since 2019 on F-1, definitely a resident alien by the substantial presence test, but my university kept issuing 1042-S forms. The site analyzed my documents and confirmed I should file as a resident alien. It gave me clear instructions to enter the scholarship as Other Income in FreeTaxUSA and how to properly claim the withholding. I just finished filing and I'm getting back about $1,450 that would have been lost otherwise! Seriously thankful for this recommendation. The step-by-step guidance made it super easy to understand exactly which boxes to check and where to enter everything in FreeTaxUSA.
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StormChaser
If you're still stuck after trying to enter everything properly in FreeTaxUSA, you might need to contact the IRS directly to resolve the misclassification. I was in a similar situation and spent WEEKS trying to get through to the IRS on their international taxpayer line. Finally discovered https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they basically call the IRS for you and hold your place in line, then call you when an agent is about to pick up. Got connected to an IRS agent in about 45 minutes instead of the 3+ hours I spent on earlier attempts. The agent confirmed that I needed to file as a resident alien and report my 1042-S income on Schedule 1 as other income. They also told me exactly where to report the withholding to make sure I got credit for it.
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Dmitry Petrov
•How does this Claimyr thing actually work? I'm confused how they can hold your place in line with the IRS?
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Ava Williams
•This sounds like BS honestly. The IRS doesn't let third parties hold your place in line. They're probably just charging money for nothing.
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StormChaser
•It actually uses an automated system that navigates the IRS phone tree and waits on hold for you. When an agent is about to answer, it calls your phone and connects you directly to the IRS call. You don't need to explain anything to them - they're just the connection service. I was totally skeptical too. But I was desperate after spending hours on hold multiple times. It works because they're not actually talking to the IRS for you - they're just waiting on hold so you don't have to. When they connect you, you're talking directly to the IRS agent yourself, not through any intermediary.
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Ava Williams
I was 100% skeptical about Claimyr but literally just used it this morning and I'm shocked it actually worked! After seeing the post above I figured I'd try it as a last resort. I've been trying to reach the IRS for 3 weeks about my 1042-S situation (very similar to yours). Claimyr called me back in 40 minutes and connected me directly to an IRS agent. The agent confirmed I should report the scholarship on Schedule 1 as other income and claim the withholding on line 25c. Filed my return yesterday using their advice and FreeTaxUSA accepted it with no issues. Turns out I was overthinking it - the IRS agent said this happens all the time with universities misclassifying students.
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Miguel Castro
I went through this exact situation last year! My university also misclassified me as a nonresident when I had clearly passed the substantial presence test. What I did in FreeTaxUSA: 1. Made sure to select "resident alien" filing status at the beginning 2. Entered my W-2 information normally 3. Added my scholarship income as "Other Income" in Schedule 1 4. For the withholding, I added it in the "Federal income tax withheld" section I got a pretty decent refund and had no issues with the IRS. The most important thing is making sure you're filing as a resident alien and not using the 1040-NR form.
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PixelWarrior
•Thank you for the detailed steps! Did you have to do anything special for the state tax portion or was it pretty straightforward once you figured out the federal part?
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Miguel Castro
•The state part was actually pretty simple once I figured out the federal portion. I just entered the state withholding amount from my 1042-S in the state withholding section along with my W-2 state withholding. For the income, I reported it the same way on my state return as I did on my federal. FreeTaxUSA walks you through the state portion after you complete the federal section, and the state return automatically imports most of the information from your federal return. Just make sure to double-check that all the withholding amounts are correct before submitting.
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Zainab Ibrahim
One important thing to check is if you have a tax treaty with your home country! I'm from India and we have a tax treaty with the US that makes some scholarship money exempt from taxes. Even as a resident alien, you might still qualify for certain treaty benefits. FreeTaxUSA doesn't handle tax treaties well, which might be why you're struggling to find where to enter the 1042-S. If you do have treaty benefits, you might need to use a different software like TaxAct or go to a professional.
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Connor O'Neill
•This is incorrect advice. As a resident alien, you generally CANNOT claim tax treaty benefits. Those are mostly for nonresident aliens only. Once you become a resident for tax purposes, you lose most treaty benefits except for very specific exceptions.
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Zainab Ibrahim
•You're right, I should have been more clear. Most tax treaty benefits are for nonresident aliens, but there are some specific provisions that continue to apply even after you become a resident alien. It depends entirely on the specific treaty and the specific type of income. For example, the US-China treaty has provisions for students that can continue for a limited time even after becoming a resident alien. But you're correct that in most cases, becoming a resident alien means losing treaty benefits.
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