SALT deduction cap for non-residents

[WoWin]

Hello,

I am a non-resident alien, therefore I have to file the form 1040NR (or 1040NREZ). I am using the Glacier tax preparation service (which is specifically for non-residents) and I believe they are deducting too much for state taxes on my return. I have contacted them and they insist they are doing it correctly, but the instructions seem pretty clear.

In the 2017 tax reform the maximum deduction of state and local income taxes has been limited to $10,000 (or $5,000 if married filing separately). This is official information that can be found e.g. here https://www.irs.gov/pub/irs-pdf/i1040nr.pdf. On page 48 it says about Schedule A:

“Line 1b. The deduction for state and local taxes is limited to $10,000 ($5,000 if married). Enter the amount which is the smaller of state and local income taxes from line 1a and $10,000 ($5,000 if married) on entry line 1b.”

I am married and we are filing separate returns (as non-resident we need to file separately). However, the Glacier software still deducted $10,000 on line 1b of Schedule A. I believe the correct amount is $5,000 given that I am married.

Am I missing something? Please help me out here!

 

[LdiJ]

Hello,

I am a non-resident alien, therefore I have to file the form 1040NR (or 1040NREZ). I am using the Glacier tax preparation service (which is specifically for non-residents) and I believe they are deducting too much for state taxes on my return. I have contacted them and they insist they are doing it correctly, but the instructions seem pretty clear.

In the 2017 tax reform the maximum deduction of state and local income taxes has been limited to $10,000 (or $5,000 if married filing separately). This is official information that can be found e.g. here https://www.irs.gov/pub/irs-pdf/i1040nr.pdf. On page 48 it says about Schedule A:

“Line 1b. The deduction for state and local taxes is limited to $10,000 ($5,000 if married). Enter the amount which is the smaller of state and local income taxes from line 1a and $10,000 ($5,000 if married) on entry line 1b.”

I am married and we are filing separate returns (as non-resident we need to file separately). However, the Glacier software still deducted $10,000 on line 1b of Schedule A. I believe the correct amount is $5,000 given that I am married.

Am I missing something? Please help me out here!

If you are talking about the Schedule A that would be attached to your FEDERAL income tax return then I agree with you. The maximum state and local tax deduction for married filing separately is $5000.00.

 

[WoWin]

Thank you! The people from Glacier insist that it is $10,000 referring to https://www.irs.gov/pub/irs-pdf/p4011.pdf (see page 12) which doesn't mention the married case. I would trust https://www.irs.gov/pub/irs-pdf/i1040nr.pdf and https://www.irs.gov/pub/irs-pdf/p519.pdf more.