Thank you, I appreciate your response.   I read that last night too.  In ProConnect, the only section you can put the tax exempt income is in Schedule OI of 1040-NR.  This amount flows to line 22 of the 1040-NR.  However, after the allowed Schedule A adjustment (which is the state income tax paid), it still calculated a tax amount based on a tax schedule as if the income is not exempt.  There's no tax due because the amount withheld from Federal wage is greater than the tax, so the client will receive a refund.  However, what I'd want to know if it is a valid strategy to put in Other Misc income section instead the income earned as a deduction so it nets to zero, then just put the Tax Treaty Article 21 on the description portion.  I did this and obviously there was no tax calculated, and the refund is the full amount of the tax previously withheld from the paycheck.

Please let me know if putting the (-) income in Other Misc is acceptable.  Thank you.