The 1040NR Tax Form for Non-Resident Aliens

Practice Areas

By: Hansa Patel

Who Must File 1040NR?

Nonresident aliens should file tax form 1040NR if they have who have US income:

  • From trades or businesses
  • That is FDAP (fixed, determinable, annual, or periodical), or
  • For which tax withholding does not cover their tax liability

The 1040NR is also required for individuals that file taxes on behalf of nonresident aliens. These may include representatives/agents, fiduciaries of a foreign national’s estate or trust, and the resident/person/foreign student/domestic fiduciary charged with the care of a non-resident foreign national or their property.

1040NR-EZ may be filed in place of the 1040NR if the nonresident alien does not claim any dependents, and their US income sources are only:

  • Wages
  • Salaries
  • Tips
  • Refunds of state and local income taxes
  • Scholarship/fellowship grants

Who are nonresident aliens?

Nonresident aliens are foreign nationals that have not passed the green card test or substantial presence test. The substantial presence test requires that someone has been physically present in the US for:

  • 31 days during the current year, and
  • 183 days during the previous three years, including the current year:
    • All days present in the current year
    • 1/3 of the days present in the first year before the current year
    • 1/6 of the days in the second year before the current year

Students on F or J visas must file as nonresident aliens for tax purposes during the first five calendar years of their time in the US.

Due Dates

Deadlines vary based on an individual’s income source.

15th day of 4th month after the tax year ends (April 15th if using the calendar year): If you are an employee and receive wages subject to US income tax withholding, or have an office/place of business in the US

15th day of 6th month after the tax year ends (June 15th if using the calendar year): If you are not an employee or self-employed, or do not have an office/place of business in the US

Extensions can be filed using Form 4868.

How is Tax Calculated?

Income effectively connected with a US trade or business is taxed after allowable deductions at the same amount as a US Citizen or resident.

US FDAP income is taxed at a flat 30% or lower treaty rate. No deductions are allowed for this income.

Conclusion

For assistance filing Form 1040NR, or filing any other tax form, contact an experienced Chugh CPA.