Form 1040-NR is used by nonresident taxpayers to file an annual income tax return.
Only residents should file a Form 1040. Nonresidents who meet the substantial presence test should use Form 1040-NR tax return.
Unlike residents, who are taxed on their worldwide income, nonresidents only report their U.S.-sourced income. Nonresidents also do not have a minimum income threshold for filing.
Prior to Tax Year 2020, nonresidents with no dependents used Form 1040-NR-EZ to file a tax return. The IRS has rendered this form obsolete, and all nonresidents should now use Form 1040-NR.
Individuals who are not U.S. citizens or green card holders but who have a "substantial presence" in the U.S. for the tax year and who have U.S.-sourced income may need to file this form.
Generally, that would include a foreign resident in the U.S. for more than 31 days in the current year and more than 183 days during the current and two preceding years. Only 1/3 of the days in the previous year are counted and only 1/6 of the days in the second preceding year are counted.
It is necessary to read the instructions to compute the number of days in the U.S. and to determine if exceptions are available for having to file the form.
The form requires the disclosure of all U.S.-sourced income for the year. For former citizens or residents, foreign-sourced income may also have to be disclosed.
Nonresident alien employees who received wages in the U.S. should file the return or an extension by April 15th (or 4.5 months) following the tax year.
Foreign persons with income other than wages subject to withholding are not required to file until June 15th — or 6.5 months following the tax year.
An extension may be requested on Form 4868.
File the return with the IRS Service Center in Philadelphia, PA, 19255, U.S.A.
You may also file the 1040-NR online with an authorized IRS e-file provider.
The 1040-NR can take anywhere from an hour to a week or more — depending on the complexity of the income and deductions of the taxpayer.
According to the IRS instructions for this form, the average time required to prepare the form is about eight hours. A foreign person who tries to file the form without the help of a U.S. tax professional is likely to take much longer because of the need to study the instructions and the difficulty of understanding the language of the U.S. tax system.
The penalties are basically the same as for late filing and payment of taxes by U.S. persons in connection with Form 1040. However, a failure to file will result in effective forfeiture of any excess withholding.