Entering 1042-S for a resident

[Babak]

My client was nonresident when he received 1042-S and then became a resident. I'm filing 1040 for him but the amounts on 1042-S don't show up anywhere.

[sjrcpa]

Enter the amounts as if they were not on a 1042-S. If there is federal tax withholding you're going to have an issue.

Did you consider filing a dual status return instead of electing too be treated as a US resident for the whole year?

[itonewbie]

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@Babak wrote:

My client was nonresident when he received 1042-S and then became a resident. I'm filing 1040 for him but the amounts on 1042-S don't show up anywhere.

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Your client wouldn't have received a 1042-S because he's a nonresident alien when he received it.  It can only be because he was a nonresident when the income was paid to him or that he was a resident alien but did not file a W-9 with the payor.

Depending on whether your client was a dual-status resident in 2021, you'd need to discern when he received the FADP, which is subject to tax on a gross basis, and whether treaty rate(s) should apply.  FDAP received during the NR period should be reported on the 1040NR statement instead.  Unfortunately, this means you may not just enter that as if it's a regular 1099 - not unless your client was a full-year resident alien or elects to be treated as one.

[itonewbie]

The reason why your entries for 1042-S don't show up anywhere is because ProConnect Tax (and its big sister Lacerte) does not support dual-status returns.  If you are created the return as a 1040, ProConnect Tax will ignore all the entries for 1040NR.

[Babak]

Yes there was both Federal and State taxes withholding. What do you mean by the issue? How can I file dual status?

[Babak]

He was nonresident at the beginning of the year and received that because of investing in some company. Then he passed the 183 test and became a resident. He still does not have a green card and is on F1 Visa. What is the solution here?

[itonewbie]

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@Babak wrote:

Yes there was both Federal and State taxes withholding. What do you mean by the issue? How can I file dual status?

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If you're preparing a dual-status return, you'd need to prepare the 1040NR statement separately from the actual return itself.  As I said, ProConnect Tax does not support dual-status - I don't think any of Intuit's professional tax products does.

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@Babak wrote:

He was nonresident at the beginning of the year and received that because of investing in some company. Then he passed the 183 test and became a resident. He still does not have a green card and is on F1 Visa. What is the solution here?

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Assuming your client was not a resident in 2019, it would appear, based on the limited info your supplied, that your client could be a dual-status resident alien - without considering the F1 visa, which I will get to in a moment.  Question is when the residency started based on §7701.

F1 visa holders are generally considered exempt individuals provided certain conditions are met and would not be treated as resident aliens even if SPT is otherwise met although they may still be subject tax on capital gains.  Are you certain your client was not an exempt individual?