Hi,

I am a citizen of India and filing my taxes as a non-resident for 2006.

1.> I received 1099-G of my 2005 state tax refund. In my 2005 federal tax return I had used the standard deduction on line 11 of 1040NR-EZ i.e "Itemized deductions" line since it is entitled to students from India. Is this a taxable refund for me for 2006 return?

2.> I also got 1099-INT from my bank savings accounts for 2006. Is it true that filing as a non-resident this interest is non-taxable (since it is not related to trade or business) and I can use 1040NR-EZ instead of 1040NR? Is this interest income non-taxable for the state of California as well?

Thanks..

1) If you used the standard deduction in 2005, you can IGNORE the Form 1099-G for the 2005 state refund.

2) Yes, the interest income IS exempt from federal taxes. I believe it is also exempt from California taxes, as California generally honors all treaty exemptions. However, a phone call to the Franchise Tax Board should confirm or deny that belief.