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I am a using the online-tax software (Glacier) to generate my 1040NR-EZ or 1040NR form, and have paid a state tax in the previous year tax return. For this year's return, I am unsure whether I should add this amount to "Itemized deductions" / Line 11.

Last year, I had the same situation and by answering:

YES, for 2012, I was required to pay ADDITIONAL STATE tax of $XYZ when I filed my STATE tax return.

to the following question that Glacier asked:

For 2012 did you file a STATE tax return on which you were required to pay additional STATE for 2012?

which generated the amount on Line 11 / Itemized deductions as follows:

State tax + Local Tax + Amount of state tax I PAID to the State in previous year's tax return

However, I received a notice from IRS that:

You can only claim state and local income taxes on Line 11, Form 1040NR-EZ, U.S. Income Tax Returns for Certain Nonresident Aliens With No Dependents. If you want to itemize deductions, complete and submit Form 1040NR.

So, it seems like either the Glacier software has a bug or I misunderstood their question (perhaps owe means reported but not yet paid)??

I would appreciate if somebody would clear up the confusion here and tell me whether on Line 11 (Itemized deductions) I should put:

State tax + Local Tax

OR

State tax + Local Tax + Amount of state tax I PAID to the State in previous year's tax return

?

(By paid, I mean the amount on the check that I included and sent to the state's treasury along with in my previous year's tax return.

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    I'm not sure I understand your confusion. How is that IRS quote contradicting what your software calculated? – littleadv Feb 21 '15 at 23:19
  • My understanding of the IRS quote is: You claimed as deductible something you shouldn't or we don't see. If it's the latter why don't you submit 1040NR and tell us? But I just turned in the form that was generated by the software (1040NR-EZ), so how could that be wrong? I am confused... – N3Oo4 Feb 22 '15 at 20:05
  • That shouldn't portion is the one I'm missing. What makes you think you shouldn't have claimed State taxes? – littleadv Feb 23 '15 at 2:47
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The piece you seem to be missing is that the taxes you paid to the state as part of your previous year's tax return IS part of "state tax".

Line 11 on 1040NR-EZ (which is equivalent to to Line 1 on 1040NR Schedule A, and Line 5a on 1040 Schedule A) is the itemized deduction for state and local income taxes paid in 2014. This includes:

  • State and local income taxes withheld from your paychecks and other payments in 2014.
  • State and local income taxes you paid in 2014 as part of filing a state/local tax return. This is usually from the tax return for 2013; but it can be also be tax returns for earlier years too, e.g. if you forgot to file before or needed to amend a previous year's tax return. What matters is that you actually paid the tax in 2014.
  • Thanks. So, are you saying I should include the paid taxes from the tax return (for 2013) in addition to those reported on W-2 for 2014 (as the tax software did)? That was exactly what I did but IRS asked me to amend my tax return. Could have they been confused and thought I am trying to claim deduction on something extra that I was not supposed to in form 1040NR-EZ? – N3Oo4 Feb 22 '15 at 20:01
  • @N3Oo4: Yes, you did it right. I cannot speculate on why IRS thinks differently; it could be just one IRS agent making a mistake. The 1040NR-EZ Line 11 instructions says "Enter the total state and local income taxes you paid or that were withheld from your salary in 2014." It clearly includes income taxes "you paid" in 2014. – user102008 Feb 22 '15 at 20:21
  • @N3Oo4 what exactly did the IRS ask you to do? – littleadv Feb 23 '15 at 2:48
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I got the same notice. I rechecked GTP and found that I mistakenly checked "yes" on the question "Have you paid ADDITIONAL STATE tax".

The "Additional" doesn't mean "additional" to federal tax but means "additional" to the regular STATE tax.

  • Welcome to Personal Finance & Money! I edited your answer to remove the new question so that your answer fits into our Q&A format. If you want an answer to your own question you should ask it by clicking the Ask Question button - please remember to include enough context so it makes sense on its own. – GS - Apologise to Monica May 30 '15 at 7:25
  • From the "More Info" section in Glacier: "State Tax Payments: Enter an amount ONLY if you were required to pay additional state taxes on the previous year's state tax return. If you only had state taxes withheld from your income statements, select "No"." – George Apr 14 '16 at 0:34

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