Preparing Form 1040-NR (continued)

Taxable Refunds of State and Local Taxes

Students may have received taxable refunds of state and/or local taxes. Remember that nonresident students, except from India, must itemize their deductions. This can include state and local income taxes paid. Any refund of state and local taxes may need to be included on the return in the year received.

Students from India are allowed a standard deduction. If the standard deduction was used on the previous year's tax return, do not include the amount of any state or local tax refund in taxable income.