Guide
Form 1040-NR: the non-resident return
For people who are not US tax residents but have US income — rent, business profits, or certain investment returns.
US income without US residence.
Form 1040-NR reports US-source income for people who are neither citizens, Green Card holders, nor resident under the day-count test.
It is a narrower return than the 1040, but the rules on what counts as US-source, and which of two tax regimes applies, are where it gets awkward.
At a glance
- Who files
- Non-resident aliens with US-source income or a US trade or business
- Covers
- US-source income only, not worldwide income
- Due
- 15 April, or 15 June where no wages were subject to withholding
- Two regimes
- Effectively connected income at graduated rates; other US income generally at a flat 30% or the treaty rate
In detail
01
Effectively connected income
Income connected with a US trade or business is taxed at graduated rates after deductions — broadly like a resident, on that income only.
02
Fixed and determinable income
Dividends, interest, royalties and similar are generally taxed at a flat 30% on the gross amount, with no deductions, unless the treaty reduces the rate.
03
Rental property
US rent defaults to the flat regime on gross rent, which is usually far worse than electing to treat it as effectively connected and deducting expenses.
04
Selling US property
FIRPTA withholding applies on disposal by a non-resident, typically a percentage of the gross price taken at closing. It is a payment on account and often exceeds the actual tax.
For people who are not US tax residents but have US income — rent, business profits, or certain investment returns.
Frequently asked
Can I claim the standard deduction?
Generally not on a 1040-NR, with limited exceptions. That is one of the main differences from a resident return.
What if I am resident for part of the year?
You may file a dual-status return, combining a 1040-NR for the non-resident part with a 1040 for the resident part. Arrival and departure years are the usual cases.
Does the treaty reduce my rate?
Often, on dividends, interest and royalties. Claiming it usually means disclosing the position and giving the payer a valid Form W-8BEN.
This guide is general information, not advice for your circumstances. Cross-border tax turns on detail, and the right answer for someone with a similar situation may not be the right answer for you. Talk to us before acting on anything here.
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