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U.S. Tax Guide for Foreign Individuals
For people who are not U.S. citizens: nonresidents with U.S. income, investors, visa holders and families moving to the United States. Start with the questions below to learn whether you are a resident or nonresident for tax purposes, which return applies, how withholding and treaties work, and what changes once you become a U.S. tax resident.
Key questions
- Who must file Form 1040-NR?Usually, a nonresident alien must file Form 1040-NR if engaged in a U.S. trade or business during the year, subject to specific exceptions. Filing is also generally required when U.S.-source income is taxable and the tax was not fully satisfied through withholding. A return may also be needed to claim a refund, deductions or certain elections.
- Does a nonresident need an ITIN to file a U.S. tax return?Usually, a nonresident who must file a U.S. individual income tax return needs an ITIN if not eligible for a Social Security number. If eligible for an SSN, use that process instead. An eligible applicant can generally submit Form W-7 together with the paper tax return, so the ITIN does not always have to be issued before the return is submitted.
- Do nonresidents pay U.S. tax on capital gains from U.S. stocks?Usually, a nonresident alien’s gains from ordinary U.S. stock investments are not subject to U.S. federal income tax when the gains are not effectively connected with a U.S. trade or business and the special 183-day rule does not apply. Important exceptions can change that result. Dividends follow different rules and are generally subject to U.S. withholding.
- When is Form 1040-NR due?Usually, for a calendar-year nonresident employee who received wages subject to U.S. income tax withholding, Form 1040-NR is due April 15 of the following year. If you did not receive those wages, the general deadline is June 15. Weekends, legal holidays and special relief can shift the actual due date; a filing extension generally does not extend the time to pay.
- When does a foreign person become a U.S. tax resident?Usually, a foreign individual becomes a U.S. tax resident by meeting the green card test or the Substantial Presence Test. Exceptions, treaty provisions and certain elections can change the result. Tax residency is different from immigration status and generally brings worldwide income into the U.S. income tax system.
- How does the Substantial Presence Test work?You generally meet the Substantial Presence Test if you have at least 31 countable U.S. days in the current year and a weighted total of at least 183 days over three years. Count all current-year days, one-third of prior-year days and one-sixth of days from the second preceding year. Excluded days and available exceptions can change your tax status.
- What is the closer connection exception, and when is Form 8840 used?The closer connection exception may let you remain a nonresident for federal income tax even when you meet the weighted Substantial Presence Test. Generally, you must spend fewer than 183 actual days in the United States during the current year, maintain a foreign tax home throughout the year and have a closer connection to that foreign country. Form 8840 is used to claim the exception and must generally be filed on time.
- Does a green card holder living abroad still have to file U.S. taxes?Usually, yes: a green card holder living abroad remains a U.S. income tax resident and must file when the applicable filing requirements are met. Moving overseas or letting the physical card expire generally does not end that tax status. A treaty position or formal termination of permanent residence can change the analysis and may have significant consequences.
- Does a foreign person owning U.S. rental property need a U.S. tax return?Usually, a nonresident individual with U.S. rental property must evaluate Form 1040-NR filing and rental withholding. Rent not effectively connected with a U.S. trade or business is generally taxed at 30% of gross income unless a treaty changes the rate. A qualifying election can instead allow net rental income to be taxed at graduated rates, with a return required.
- What happens when a foreign person sells U.S. real estate?Usually, a foreign seller must report the taxable disposition of U.S. real estate, and the buyer must address FIRPTA withholding. The general withholding rate is 15% of the amount realized, not 15% of the profit, although exceptions and reduced withholding can apply. Withholding is a credit toward the seller’s final tax, not necessarily the final tax itself.
- Does owning U.S. property through an LLC change a foreign owner's U.S. taxes?It depends: an LLC’s federal tax classification, not its name, determines how income and filings are handled. A single-member LLC that is disregarded usually leaves rental income and sale gain taxable to its owner. Partnership or corporate classification changes the analysis, and a foreign-owned domestic disregarded LLC may have separate Form 5472 obligations.
- How can a tax treaty reduce U.S. withholding on my income?A tax treaty may reduce or eliminate U.S. withholding for a qualifying resident of a treaty country receiving covered income. The benefit depends on the income category, beneficial ownership and all applicable treaty conditions. The recipient generally must give the withholding agent the correct documentation before a reduced rate can be applied.
- When do I have to disclose a treaty position on Form 8833?Usually, Form 8833 is considered when you take a treaty-based return position that overrides or modifies U.S. tax law and reduces or may reduce tax. Not every treaty benefit requires this disclosure because regulatory exceptions apply. Dual-resident treaty positions require particular care, and a withholding certificate does not automatically replace a required Form 8833.
Forms to know
Comparisons
Terms explained
In-depth articles
U.S. Tax Planning Before Moving to the United States
How Many Days in the U.S. Make You a Tax Resident?
Foreign Investors Buying U.S. Real Estate: U.S. Taxes, FIRPTA & LLC Structuring
Moving to the U.S. With a Foreign Company: Form 5471, CFC & GILTI Tax Planning
U.S. Estate Tax for Non-U.S. Owners of U.S. Property, Stocks and Companies
Selling U.S. Property as a Foreign Owner: How to Reduce or Recover FIRPTA Withholding
Foreign Owner Renting Out a U.S. Property: 30% Withholding or the Net Basis Election?
Your First U.S. Tax Year After Moving: Dual-Status Returns and the Elections That Change Them
Tax Resident in Two Countries? How Treaty Tie-Breaker Rules Work — and Their Hidden Costs
Form 1040-NR Explained: Who Must File a U.S. Nonresident Tax Return?
Do Nonresidents Pay U.S. Tax on U.S. Stocks, Dividends and Capital Gains?
U.S. Tax Withheld From Your Income? Form 1042-S, Form W-8BEN and How Foreign Individuals Claim a Refund
Tax cases
A Foreign Contractor Received a U.S. Form 1099-NEC. Did They Actually Owe U.S. Tax?
A Foreign Investor Owned U.S. Rental Properties Through LLCs. What Needed to Be Filed?
Foreign National Moved to the U.S. and Didn't Know Worldwide Income Became Reportable
Foreign Person Sold U.S. Real Estate and Too Much FIRPTA Tax Was Withheld
Foreign Investor Owned U.S. Rental Property but Never Filed Form 1040NR
New U.S. Resident Owned Foreign Mutual Funds and Didn't Know About PFIC Rules
L-1 Visa Holder Moving to the U.S.: What Happens to Your Foreign Income and Businesses?
F-1 Student Filed Form 1040 Instead of 1040NR: How Can It Be Corrected?
Country guides
United Kingdom: Moving to the U.S.
Canada: Moving to the U.S.
Mexico: Moving to the U.S.
Colombia: Moving to the U.S.
Spain: Moving to the U.S.
France: Moving to the U.S.
Germany: Moving to the U.S.
Switzerland: Moving to the U.S.
United Arab Emirates: Moving to the U.S.
Brazil: Moving to the U.S.
Argentina: Moving to the U.S.
Chile: Moving to the U.S.
Peru: Moving to the U.S.
India: Moving to the U.S.
Norway: Moving to the U.S.
Japan: Moving to the U.S.
Australia: Moving to the U.S.
Italy: Moving to the U.S.
Netherlands: Moving to the U.S.
Ireland: Moving to the U.S.
Singapore: Moving to the U.S.
South Korea: Moving to the U.S.
Sweden: Moving to the U.S.
Portugal: Moving to the U.S.
Venezuela: Moving to the U.S.
Austria: Moving to the U.S.
Belgium: Moving to the U.S.
China: Moving to the U.S.
Denmark: Moving to the U.S.
Luxembourg: Moving to the U.S.
Poland: Moving to the U.S.
Russia: Moving to the U.S.
Israel: Moving to the U.S.
Panama: Moving to the U.S.
Dominican Republic: Moving to the U.S.
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