U.S. Tax Form 1040-NR U.S. Nonresident Alien Income Tax Return
What Is Form 1040-NR?
Form 1040-NR is used by nonresident taxpayers to file an annual income tax return.
What Is The Difference Between 1040 and 1040-NR?
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.
What Is The Difference Between 1040-NR and 1040-NR-EZ?
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.
Who Must Use This Form?
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.
What Information Is Required?
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.
When Is It Due?
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.
Where Should It Be Filed?
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.
How Long Does It Take To Prepare?
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.
Why Comply ? (Penalties)
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.
Notes
U.S. tax preparers should not assume that the rules for this form are the same as for form 1040 and should study the 30 pages of instructions in detail.
Form 1040-NR is also the income tax form to be used by U.S. expatriates and is filed after the expatriate officially departs from the U.S. as a citizen or permanent resident. Taxpayers will not file this form during a period of time when they are a resident of another country (like Canada) but are still a citizen or permanent resident of the U.S. If a taxpayer is required to pay taxes on their U.S. source income for ten years after expatriating, this is the form that should be used.
Form 2063 is the short form option for expatriates who have had no U.S. taxable income for the tax year up to and including the date of departure from the U.S. This form can also be used by resident aliens who can demonstrate to the IRS that their departure will not hinder the collection of any tax.
Form 1040-C is the long form that is required by those who had U.S. taxable income in the previous and current year -- which would include most departing expatriates. This is a special version of the 1040 that is required to secure a "sailing or departure permit" which is the document that indicates that the taxpayer is no longer a U.S. citizen or permanent resident.
In the year a taxpayer officially leaves the U.S. he or she will be deemed to be a dual-status filer and will be required to file both a Form 1040-C and a Form 1040-NR. The same rule applies to nonresident aliens who move to the U.S. to establish permanent residency.
