3 min read

Form 1040-NR, U.S. Nonresident Alien Income Tax Return

H&CO : May 10, 2024 3:17:37 PM

Tax

Form 1040-NR, U.S. Nonresident Alien Income Tax Return

Form 1040-NR is an IRS tax return for nonresident aliens who conducted business in the U.S. or earned income from U.S. sources during the tax year. This form is also required from representatives of a deceased person who would have been obligated to file Form 1040-NR, as well as representatives of an estate or trust that must file the form.

Many nonresident aliens who file Form 1040-NR may receive a refund if the tax withheld from their payments during the year is greater than their actual tax liability.

KEY TAKEAWAYS

Form 1040-NR is often required for nonresident aliens who engaged in a trade or business in the United States or otherwise earned income from U.S. sources.
A non-resident alien is somebody who is not American and lives abroad, but who earns taxable income in the U.S.
Typically, nonresident aliens are individuals who are not U.S. citizens and have not met the criteria of the green card or substantial presence tests.

Who is required to file Form 1040-NR?

You must file Form 1040-NR if you meet any of the following criteria:

- You were a nonresident alien who engaged in a trade or business in the United States during the tax year, regardless of whether that trade or business produced income.
- You were a nonresident alien who did not engage in a trade or business in the United States during the tax year but had U.S. source income that is listed on Schedule NEC, lines 1 through 12, and not all U.S. tax due was withheld from that income.
- You owe special taxes, such as the alternative minimum tax (AMT) or household employment taxes.
- You received distributions from a health savings account (HSA), an Archer MSA, or a Medicare Advantage MSA.
- Your net earnings from self-employment were $400 or more, and you reside in a country that has a Social Security agreement with the United States.
- You are acting as the personal representative for a deceased person who would have had to file Form 1040-NR.
- You represent an estate or trust that is required to file Form 1040-NR.

Who is considered a nonresident alien for tax purposes?

Typically, individuals who are not U.S. citizens are classified as nonresident aliens if they do not satisfy the criteria of the green card test or the substantial presence test for the relevant tax year.

Green Card Test

You meet the criteria for the green card test and are considered a resident alien if you were a lawful permanent resident of the United States at any time during the tax year. Generally, you are a lawful permanent resident if you have been issued an alien registration card, commonly known as a green card, by the U.S. Citizenship and Immigration Services (USCIS) or by its predecessor, the Immigration and Naturalization Service (INS). Your resident status is presumed unless it is revoked by the USCIS or abandoned via an administrative or judicial proceeding.

Substantial Presence Test

The Substantial Presence Test determines your residency status based on the duration of your stay in the United States over the tax year in question and the two previous years. Noncitizens must satisfy both the 31-day test and the 183-day test within this period to qualify as a resident alien.

Certain limited exceptions exist where you might satisfy one of the two tests and still be considered a nonresident alien. For instance, if you are a resident of a country with an income tax treaty with the United States, you could claim a reduced U.S. tax liability under that treaty.

Some common doubts from non-residents

What Taxes Do Non-Citizens Pay in the U.S.?

Non-citizens residing or working in the U.S. are generally required to pay income taxes similar to citizens. However, the tax rate may vary depending on their residency status.

Can I Also File a Form 1040 if I File a 1040-NR?

Forms 1040 and 1040NR are not mutually exclusive. This means one can be regarded as both a resident and a nonresident of the United States for tax purposes within the same calendar year, known as a "dual-status taxpayer."

Can You e-file Form 1040-NR?

Yes! The IRS introduced electronic filing for Form 1040-NR in 2017.

When Do I Need To File a 1040-NR Form?

Usually, the Form 1040-NR must be filed by June 15th of each year.

We assist non-residents with their tax return

For over 30 years, we have been working closely with non-residents on their individual and corporate tax returns. We ensure compliance with US tax laws, giving you the peace of mind that everything is under control.

With offices in the US in Miami, Coral Gables, Aventura, Fort Lauderdale, Orlando, Melbourne, and Tampa as well as offices in over 29 countries, our CPAs and International Tax Advisors are readily available to assist you with all your income tax planning, tax preparation and IRS representation needs. To learn more about our accounting firm services take a look at our individual tax services, business tax services, international tax services, expatriate tax services, SAP Business One, entity management, human capital, and audit and assurance services.