Option 1: Continue to file 1040, which is not advisable for F1 students. If you apply for green card 4-5 years later with 3-4 years of H1B status, probably that's not going to hurt you. Option 2: Correct the mistake by filing form 1040X for each years you filed federal and state tax returns. You need to create new 1040NREZ, tally it with your old 1040 and pay the difference. You must have received all the refunds on your federal tax return. It hurts to return about 80% of those two years liabilities plus interests. You have 3 years to file tax ammendments from the date of filing. You have another 2 years to pray for yourself that IRS doesn't find your mistakes. After five years of filing date, you will not probably chased by IRS for whatever mistakes you made.