Unofficial UWaterloo Intern USA Tax Guide (References)
Disclaimer: This isn't professional tax advice. If you have any questions, ask a professional.
 "Line 11 - Itemized Deductions. Enter the total state and local income taxes you paid or that were withheld from your salary in 2012." (2012 Instructions for 1040NR-EZ)
 "If you qualify to exclude days of presence as a teacher or trainee, you must file a fully completed Form 8843 with the IRS." (Pub. 519, Page 5)
Comments: I understand this to mean regardless of whether or not you are substantially present.
 "Due to IRS regulations, you cannot direct-deposit your refund into foreign accounts, only domestic accounts located in the United States." (TurboTax Suport)
 Comments: I contacted the IRS hotline who stated that the J-1 intern program qualifies us as trainees and not students.
 "You will not be an exempt individual as a teacher or trainee in 2012 if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. However, ..." (Pub. 519, Page 5)
Comments: Read the instructions concerning this carefully. My interpretation is to redo substantial presence test without excluding this year's days of presence. If you are considered substantially present, you'll have to file as a resident alien instead. Reminder that my interpretation isn't worth anything.
 Comments: I contacted the FTB about this. Specifically, a refund must be deposited into an account with US routing information. You may deposit to a foreign bank account if they have US offices and routing information. You should contact your bank about whether this is possible.