My status:
From 01/01/07 to 07/09/07: F1 (OPT period) in the States
From 07/10/07 to 12/22/07: stayed in China (OPT was over)
From 12/22/07 to 12/31/07: H1B in the States

I earned all my income effective connected with a U.S. trade or business when I was on F1 status (OPT period).

Last year, I received a state income tax refund of $436.

Currently, I am filing a 1040NR form. My questions are:
1. Should I include all of the state tax refund ($436) in "Taxable refunds, credits, or offsets of state and local income taxes" (box 11 in 1040NR) or only part of them? If only part of them, how should figure it out? I filed a 1040NR-EZ for 2006.

My AGI is around $16,154; I contributed $1650 (box 12a, Code D in my W-2) to 401K last year.
2. Can I claim for credit for qualified retirement savings contributions (box 48)?

Your help will be highly appreciated!

1) Do NOT include the state tax refund as income UNLESS you claimed the withheld state income taxes as an itemized deduction on your 2006 tax return.

2) Yes.

Thanks for your advice, AtlantaTaxExpert!

You must think again before putting your money in any retirement account. In 401K if you withdraw money before 59 1/2 you will pay early withdrawal penalty of 10% and the amount is your taxable income. If at the time of withdrawal, you are nonresident, the plan administrator will withhold backup taxes. You may even be required to file your tax return. If you return back to your country, then after you are 59 1/2 how will you manage transfer of funds from the U.S. to your country? And who will inherit it and will that person be able to manage your account.