US Tax Filing for Non-Residents
Complete guide for US tax filing for non-residents
The United States taxes individuals based on their residency status, and non-residents must follow specific tax rules. If you are a non-resident alien (NRA), you may still have US tax obligations if you earn income from US sources. This guide explains who qualifies as a non-resident, what income is taxable, and how to file US taxes correctly.
Who is a Non-Resident Alien (NRA)?
A non-resident alien is someone who is not a US citizen and does not meet the Green Card Test or Substantial Presence Test.
1. Green Card Test
- If you are a lawful permanent resident (Green Card holder), you are considered a resident for tax purposes.
2. Substantial Presence Test
You are a US resident for tax purposes if you were physically present in the US for:
- At least 31 days in the current year, and
- 183 days over the past three years (counting all days in the current year, 1/3 of days from the previous year, and 1/6 of days from the year before).
If you do not meet these tests, you are generally a non-resident alien (NRA).
Types of Taxable Income for Non-Residents
Non-residents are only taxed on US-sourced income, which includes:
| Income Type | Taxable? | Notes |
|---|---|---|
| Wages/Salary (US work) | ✅ Yes | Subject to withholding |
| Investment Income (Dividends, Interest) | ✅ Yes | Often taxed at 30% flat rate (unless treaty applies) |
| Rental Income (US property) | ✅ Yes | Must file Form 1040-NR |
| Capital Gains (US stocks/property) | ✅ Yes | Taxed at 15%-30% (varies by holding period) |
| Social Security Benefits | ❌ No | Unless exceptions apply |
| Foreign-Sourced Income | ❌ No | Not taxed unless effectively connected to a US business |
How Non-Residents File US Taxes
1. Required Tax Forms
- Form 1040-NR (US Nonresident Alien Income Tax Return) – Main tax return for NRAs.
- Form W-7 (ITIN Application) – If you don’t have an SSN.
- Form 8843 (Statement for Exempt Individuals) – Required if you were in the US but not taxable.
- Form W-8BEN (Tax Treaty Benefits) – Reduces withholding if your country has a tax treaty.
2. Tax Deadlines
- April 15 – Due date for most filers.
- June 15 – Automatic extension for NRAs without US income.
- October 15 – Extended deadline if Form 4868 is filed.
3. Tax Rates for Non-Residents
- Wages/Salary – Progressive rates (10% to 37%).
- Investment Income – Often flat 30% (unless a tax treaty lowers it).
- Capital Gains – 15%-30% depending on holding period.
Tax Treaties & Reduced Withholding
The US has tax treaties with over 60 countries that may reduce or eliminate withholding taxes.
- Example: A UK resident receiving US dividends may only pay 15% tax instead of 30%.
- To claim treaty benefits, submit Form W-8BEN to the payer.
Common Mistakes to Avoid
- Filing as a Resident by Mistake – Using Form 1040 instead of 1040-NR can lead to penalties.
- Not Reporting US Rental Income – Even if no tax is due, you must file.
- Missing Form 8843 – Required for students/exchange visitors (F/J visas).
- Ignoring FBAR (FinCEN Form 114) – If you have >$10,000 in foreign accounts, you must report it.
Do Non-Residents Get Tax Refunds?
✅ Yes, if:
- Too much tax was withheld (e.g., from wages).
- You qualify for treaty benefits.
- You overpaid estimated taxes.
Conclusion
Non-resident aliens must file US taxes if they earn US-sourced income. Key steps include:
✔ Determining residency status.
✔ Reporting only US income (Form 1040-NR).
✔ Applying tax treaty benefits if eligible.
✔ Meeting deadlines to avoid penalties.
If you need help, consult a cross-border tax professional or use IRS Free File for simple returns.
