I am from India and have been in the U.S for 8 years and working on H1B , so have been filing 1040(since its been more than 5 yrs) I am also doing my Part Time school during which I received a $1000 scholarship towards my summer semester of which $300 was withheld. I got a 1042-S form with the following entries:
1. Income Code : 15
2. Gross Income : 1,000
5. Tax Rate : 30.00
7. U.S Fed Tax Withheld: 300

I have my regular w2 from my company. Do I need to enter any of this 1042-S information in my 1040? Also I am claiming tax deduction for my tuition. I received my 1098-T form and I usually file whatever is in it. And this year there is a new entry in that form(1098) about scholarships and grants which is $1000.

Please advise.

You can add the income to wages on Line #7 of Form 1040 or 1040A and add the $300 on the WITHHELD line.

Debit your tuition amount by $1,000 for the scholarship on the Form 1098-T.

You can add the income to wages on Line #7 of Form 1040 or 1040A and add the $300 on the WITHHELD line.

Debit your tuition amount by $1,000 for the scholarship on the Form 1098-T.


I thought you don't have to add this to the income line. Just the $300 on the withheld line and debit the tuition amount.
Can you please clarify?

The fact that money was withheld tends to indicate that the money was paid as a result of a service performed. If so, then the $1,000 IS taxable.

If no service was performed, then the $1,000 is exempt.