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In Scrum with JIRA, what does Atlassian recommend us to do on the User Story when we realize mid-sprint that it cannot be completed within that sprint?

What I am doing now:

In my current practice, the story points are estimated on the User Story during Grooming, while the hours are estimated on the newly created sub-tasks during Sprint Planning. The User Story is completed when all sub-tasks are completed.

(If the User Story is originally thought to be small, no sub-tasks are created for it, and both story points and hours estimate will be on the User Story.)

There are times, sub-tasks are underestimated. At this point, I would split (edit) the in-progress sub-task to reflect what I will complete and the new sub-task with new hours estimation to reflect what I cannot complete. At the end of the sprint, the sub-task will roll over together with the User Story.

My concern is: at the end of the Sprint when the User Story returns to the backlog, and we do story point estimation on the remaining work and update on the User Story, will it impact any reports that used the original story point?

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I would not change the user story. You will just not earn the story points this Sprint. During the planning session re-estimate, but do not update the user story. Do substract the difference of the max story points the team would pick up this Sprint. When using yesterday's weather as suggested by Jeff Sutherland you always take the average of the last three Sprints to calculate the velocity of the team. Then it doesn't really matter when the story points where earned anymore.

Yesterday's weather explained:

Here’s how it works. First, the Team determines their average Velocity for the past three Sprints, adjusted for team size. For example, if one person of a five-person Team is on vacation for the entire Sprint in which 50 points of work is completed, the Team's raw Velocity (50) should be divided by 80% (4 instead of 5 Team members) for a normalized Velocity of 60 points. Normalized velocity is the number of points you would expect the team to complete if all team members are available full time.

Doing it this way will not influence your reporting in Jira. :)

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