Hello.

I was on F1 visa in 2007 and started OPT in Dec. 2007 (which I believe comes under F1 status). I have been in the US since 2005.

I had a few questions as follows:

Q. 1. I received a 1099-INT form. Do I need to pay tax on interest income from Money market account investments in the US? I believe I am a Non-resident (< 5yrs on F1), so I think maybe not.

Q. 2. I want to claim Education Credit / Benefits (Lifetime Learning Credits) for 2007. I received a form 1098-T from my University. The amount in box 2 (tuition and related expenses) is less than I actually paid, based on the receipts I have. I understand I cannot claim health center and insurance, but can I claim International student counseling, and few other fees which are mandatory to be enrolled in the program?

Q. 3. I read in 1040NR instructions that if I claim Education credit, I need to file as a Resident Alien. Is that correct?

Q. 4. But if I choose form 1040 or 1040A (used by a Resident Alien) for filing, can I still exclude the interest I mentioned in Q. 1 from my taxable income?

Help is appreciated.

AtlantaTaxExpert

1) No. Such interest is NOT taxable to a non-resident alien.

2) No; such credits/deductions are NOT ALLOWED for non-resident aliens.

3) Yes.

4) No, but you do NOT have the OPTION of filing Form 1040A; to do so when you know it is incorrect is tax fraud.

mi0100

Thank you for your help AtlantaTaxExpert!!

I had talked to a IRS *help desk* person and came to know that I do satisfy substantial presence test = Resident Alien. But then I would need to pay up social security and medicare. That turns out to be non-profitable to me. So 1040NR-EZ is the best option for me.

AtlantaTaxExpert

Okay!