# 1040NR Schedule A



## snail (Jun 23, 2016)

In 2015 I had state income tax withheld on a W-2. I will get most of this withholding back on filing a state tax return. 

On 1040NR Schedule A it asks for the amount of state income tax withheld. But I would rather not claim the deduction. I don't want the hassle of having to get a 1099-G or deal with the state return amount on next years 1040NR. Can I leave Schedule A blank or do I have to enter the withheld amount on Line 1?

Thanks!


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## Bevdeforges (Nov 16, 2007)

You never have to take a deduction you may be entitled to. To save the hassle of then having to declare it as income in the following year, I think it might be a good idea not to take the state tax deduction this time.
Cheers,
Bev


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## JustLurking (Mar 25, 2015)

You don't have to take the deduction, but it _might_ be to your advantage to take it.

Suppose you are in the 25% federal bracket and take a $4k deduction for state tax. This reduces your federal tax for this year by $1k. And suppose that next year you have no US source income, only the state tax refund. Your $4k refund sits below the personal exemption, so 0% federal owing. You come out $1k ahead overall.

Interplay with Australian tax might mean it's not this straightforward (and maybe no gain at all out of it) but you get the idea here. Also, you might not be able to claim a credit from Australia for US tax if you could have reduced it. Finally, you'll get a 1099-G regardless of whether or not you take a deduction this year.

[ I've just re-read what I wrote. Dear gods, I'm starting to sound like BBCWatcher. That's just depressing...  ]


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## snail (Jun 23, 2016)

If I have no other income except for the state refund and it is less then $4K do I have a filing requirement next year? I can't tell whether this is covered under the exemption from filing.


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## JustLurking (Mar 25, 2015)

snail said:


> If I have no other income except for the state refund and it is less then $4K do I have a filing requirement next year? I can't tell whether this is covered under the exemption from filing.


It looks to me like you'd be exempt, but then I'm only reading the same (unclear) stuff as you are. My logic would be that a state tax refund on wage withholding is still 'wages', and doesn't suddenly morph into 'passive income' or something else just because it has cycled through a state's coffers and back out the other side.

You might have good (ideological?) reasons for not wanting to send another 1040NR, but if this state refund is your only US source 'income' all you would have to do to file is list it out on the 1040NR, negate every penny(?) with the personal exemption, end up with a big fat zero tax owing at the bottom of the form, and post it. You won't have to include any details at all about your Australian or any other non-US income or activities; no FBAR, no FATCA form, and so on.

The end result is a waste of paper and time for both you and IRS. But at least if you do choose to send in a return like this all unknowns are gone and you can pat yourself on the back for having thrown just a little more sand into the gears at the IRS.

For what it's worth, I have to file _precisely_ this type of 'nil' return with the IRS each year for a decade, since I am a 'covered' expat under pre-HEART rules. It is a ten-year waste of time, money and effort for all concerned. But then so is an awful lot of other US tax law as well.


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