Form 1040-NR: The Nonresident Alien's Tax Return

Form 1040-NR is the individual income tax return for nonresident aliens. If you're a foreign individual with income from US sources, this may be your filing obligation.

Who files Form 1040-NR?

You file Form 1040-NR if you are a nonresident alien who:

• •Had US-source income that is effectively connected with a US trade or business
• •Had US-source income on which tax was not fully withheld
• •Want to claim a refund of overpaid or overwithheld tax
• •Want to claim the benefit of a tax treaty

Resident vs. nonresident: How to determine

You're generally a resident alien if you meet either:

• •Green Card Test: You had a green card at any point during the year

• •Substantial Presence Test: You were in the US for 31+ days in the current year AND 183+ days over a 3-year period (using a weighted formula)

If you meet neither test, you're a nonresident alien and file Form 1040-NR.

Types of US-source income

Effectively Connected Income (ECI): Income from a US trade or business. Taxed at graduated rates (same as US citizens). Common examples: self-employment income, partnership income, rental income from active management.

FDAP Income: Fixed, Determinable, Annual, or Periodical income. Taxed at a flat 30% (or lower treaty rate). Examples: dividends, interest, royalties, rents (passive).

Key differences from Form 1040

• •No standard deduction (you get itemized deductions related to ECI only)
• •Different filing status options
• •Tax treaty benefits may reduce rates
• •Different rules for dependents

Deadlines

• •If you had wages subject to withholding: April 15
• •If you had no wages subject to withholding: June 15
• •Extension available by filing Form 4868

Common for international founders

If you're a foreign founder who:

• •Received guaranteed payments from a US partnership → File 1040-NR
• •Had effectively connected income through your LLC → File 1040-NR
• •Had US dividends or interest → May need 1040-NR or may be covered by withholding