I'm filing form 1040NR, and received form 1042-S. The income code is 29 deposit interest, and gross income $12, and no tax withholding. Should I report the interest income from 1042-S to Schedule NEC, rather than line 9a taxable interest on page 1 of form 1040NR? If yes, according to the instruction of form 1040NR, the interest from a US bank is generally exempt from the 30% tax. On form 1042-S, both tax rate of 3b and 4b are "00.00. Hence, I input 0% to "Other Percentage 1" and input $12 to "Interest - Other". Then, there is two critical diagnostics. No. 1 is "for efile purposes, the tax rate on Form 1040NR, page, Schedule NEC, column (d) must be greater than 10% when the country of residence for the year is China and an amount is present on line 2c of the same column". No. 2 critical diagnostics is "for efile purposes, if there is not a Form 1042-S with an income code '01' or '07', the tax rate on form 1040NR, page 4, schedule NEC, column (d) must be greater than 30% when an amount if present on line 2c of the same column. Does anyone can help me how to solve these two diagnostics? Thank you very much for your help!
