I had 2 months exempt income in 2008. But I am filing only 1040 but not 1040NR, since I am holding H1 visa. So in line 7, I put all income there, and Exemption income was put in line 21, and I noted it as "Exempt income;country;article No". In line 37, I adjusted my income to a less amount. This is what I did.---Personal opinion only.