Foreign Investors

Form 1040-NR Explained: Who Must File a U.S. Nonresident Tax Return?

Form 1040-NR is the U.S. income tax return for nonresident aliens. It is required when a nonresident has U.S. trade or business income, U.S. income on which tax was not fully withheld, or needs to claim a refund.

Last reviewed: 2026-09-29

Quick answer

You generally must file Form 1040-NR if you were a nonresident alien and were engaged in a U.S. trade or business during the year, or had U.S.-source income on which the correct tax was not fully withheld. You also file it to claim a refund of over-withheld tax, to claim treaty benefits in certain cases, or to make the net-basis election for U.S. real estate rentals.

Who is a nonresident alien

A non-citizen is a U.S. tax resident if they hold a green card at any time in the year or meet the substantial presence test (generally 183 weighted days over three years, with at least 31 days in the current year). Everyone else is a nonresident alien. Students, teachers and trainees on certain visas may be exempt from counting days.

Who must file

Nonresidents engaged in a U.S. trade or business at any time during the year, even if they had no income from it or the income is exempt under a treaty
Nonresidents with U.S.-source income whose tax was not fully satisfied by withholding
Representatives or agents responsible for filing for a nonresident
Fiduciaries of nonresident estates and trusts
Dual-status taxpayers, for the nonresident portion of the year (with the resident portion reported on Form 1040 or attached as a statement, per IRS instructions)

What Form 1040-NR reports

The return separates income effectively connected with a U.S. trade or business, taxed on a net basis at graduated rates, from fixed or determinable annual or periodical (FDAP) income such as dividends, rents and royalties, reported on Schedule NEC and generally taxed at 30 percent or a lower treaty rate. Schedule OI collects residency, visa and treaty information.

Example

Luis lives in Spain and owns a Miami condominium rented year-round. Without an election, his gross rent is subject to 30 percent withholding. By making the net-basis election on a timely Form 1040-NR, he can be taxed on net rental income after expenses and depreciation, which is often far lower.

Deadlines

April 15: if you received wages as an employee subject to U.S. income tax withholding, or have a U.S. office
June 15: if you did not receive such wages
Form 4868 provides an automatic extension of time to file, not to pay

Deductions and limits

Nonresidents generally cannot claim the standard deduction (students and business apprentices from India are an exception under the treaty), cannot file jointly, and can deduct only expenses connected with effectively connected income, plus limited itemized deductions such as state and local income taxes and charitable gifts to U.S. organizations. A nonresident must file a timely, true and accurate return to claim deductions and credits.

Penalties

The usual failure-to-file and failure-to-pay penalties apply. In addition, the IRS may deny deductions against effectively connected income if the return is filed more than 16 months after the due date, which can make a late filing far more expensive than the tax on net income alone.

Key takeaways

Form 1040-NR is filed by nonresident aliens and by dual-status taxpayers for the nonresident part of the year.
Engaging in a U.S. trade or business during the year generally requires a return, even with no income.
U.S. income fully covered by correct withholding generally does not require a return, unless a refund is sought.
The deadline is April 15 if the filer received U.S. wages subject to withholding; otherwise June 15.
Nonresidents generally cannot use the standard deduction or file jointly.

Frequently asked questions

I sold U.S. stock as a nonresident. Do I need to file?

Usually not, if you were not in the United States 183 days or more during the year and the gain is not connected with a U.S. business. Capital gains on U.S. stock are generally not taxed for such nonresidents.

Can I file Form 1040-NR electronically?

Yes. The IRS accepts e-filed Forms 1040-NR through authorized software and preparers.

Do I need an ITIN to file?

Yes, if you do not have a Social Security number. The ITIN application on Form W-7 is generally submitted together with the return.

Can I claim dependents?

Generally only residents of Mexico, Canada or South Korea, and students from India, may claim dependents in limited cases. The rules follow the related treaties and IRS instructions.

My employer withheld too much. How do I get it back?

File Form 1040-NR reporting the income and withholding shown on your Forms W-2 or 1042-S to claim the refund.

What if I have treaty-exempt income?

Report it on the return and generally disclose the treaty position; certain treaty positions require Form 8833.

Sources and official references

Educational information only

This article provides general educational information and should not be considered tax, legal, accounting, or investment advice. Tax consequences depend on each taxpayer's specific circumstances.

Written by Roger I. Chirino

Chirino USA tax professionals

Our educational resources are supported by experienced U.S. tax and accounting professionals.

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