Form 1040-NR, U.S. Nonresident Alien Income Tax Return
If you are not a U.S. citizen or a green card holder and did not live in the USA but had U.S. source income or a business that paid you and/or had U.S. taxes withheld during the tax year, you must file Form 1040NR.
What is Form 1040-NR?
For 2020, you will use the redesigned Form 1040-NR.
Nonresident aliens are taxed only on their income from sources within the United States and on certain income connected with the conduct of a trade or business in the United States.
A nonresident alien's income that is subject to U.S. income tax must be divided into two categories.
Income that is effectively connected with a trade or business in the United States, and
Income that is not effectively connected with a trade or business in the United States
The difference between these two categories is that effectively connected income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. citizens and residents. Income that is not effectively connected is taxed at a flat 30% (or lower treaty) rate.
Who must file Form 1040-NR?
You must file Form 1040-NR if any of the following conditions apply to you.
1. You were a nonresident alien engaged in a trade or business in the United States during 2020. You must file even if:
a. You have no income from a trade or business conducted in the United States,
b. You have no U.S. source income, or
c. Your income is exempt from U.S. tax under a tax treaty or any section of the Internal Revenue Code.
However, if you have no gross income* for 2020, do not complete the schedules for Form 1040-NR other than Schedule OI (Form 1040-NR). Instead, attach a list of the kinds of exclusions you claim and the amount of each.
2. You were a nonresident alien not engaged in a trade or business in the United States during 2020 and:
3. You owe any special taxes, including any of the following.
4. You received HSA, Archer Medical Savings Account (MSA), or Medicare Advantage MSA distributions.
5. You had net earnings from self‐employment of at least $400 and you are a resident of a country with whom the United States has an international social security agreement. See the instructions for Schedule 2, line 4, later.
6. Advance payments of the premium tax credit were made for you or a dependent who enrolled in coverage through the Marketplace. You or whoever enrolled you should have received Form(s) 1095‐A showing the amount of the advance payments.
7. Advance payments of the health coverage tax credit were made for you, your spouse, or a dependent. You or whoever enrolled you should have received Form (s) 1099-H showing the amount of the advance payments.
8. You are the personal representative for a deceased person who would have had to file Form 1040-NR. A personal representative can be an executor, administrator, or anyone who oversees the deceased person's property.
9. You represent an estate or trust that must file Form 1040-NR. Change the form to reflect the provisions of subchapter J, chapter 1, of the Internal Revenue Code. You may find it helpful to refer to Form 1041 and its instructions when completing the Form 1040-NR. Refer to the Instructions for Forms 1040 and 1040-SR only as necessary.
If you are filing Form 1040-NR for a foreign trust, you may have to file Form 3520‐A, Annual Information Return of Foreign Trust with a U.S. Owner, on or before the 15th day of the 3rd month after the end of the trust's tax year. For more information, see the Instructions for Form 3520‐A.
10. You held a qualified investment in a qualified opportunity fund (QOF) at any time during the year. You must file your return with Form 8997 attached. See the instructions for Form 8997 for additional reporting requirements.
11. You are a dual-resident taxpayer, and you would like to be treated as a nonresident of the United States for purposes of figuring your income tax liability. You may need to file your return with a Form 8833 attached. See the Instructions for Form 8833 for additional information.
Form 1040NR Filing.
If you are an alien (not a U.S. citizen), you are considered a nonresident alien unless you meet one of the two tests
You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for calendar year 2020 (January 1–December 31). Even if you do not meet either of these tests, you may be able to choose to be treated as a U.S. resident for part of the year.
Green Card Test
You are a resident for tax purposes if you are a lawful permanent resident of the United States at any time during calendar year 2020. This is known as the "green card" test. You are a lawful permanent resident of the United States at any time if you have been given the privilege, according to the immigration laws, of residing permanently in the United States as an immigrant. You generally have this status if the U.S. Citizenship and Immigration Services (USCIS) (or its predecessor organization) has issued you an alien registration card, also known as a "green card." You continue to have resident status under this test unless the status is taken away from you or is administratively or judicially determined to have been abandoned.
Substantial Presence Test
You are a resident for tax purposes if you meet the substantial presence test for calendar year 2020. To meet this test, you must be physically present in the United States on at least:
31 days during 2020; and
183 days during the 3-year period that includes 2020, 2019, and 2018, counting:
All the days you were present in 2020, and
1/3 of the days you were present in 2019, and
1/6 of the days you were present in 2018.
Days of Presence in the United States
You are treated as present in the United States on any day you are physically present in the country at any time during the day. However, there are exceptions to this rule. Do not count the following as days of presence in the United States for the substantial presence test.
Days you commute to work in the United States from a residence in Canada or Mexico if you regularly commute from Canada or Mexico.
Days you are in the United States for less than 24 hours when you are in transit between two places outside the United States.
Days you are in the United States as a crew member of a foreign vessel.
Days you are unable to leave the United States because of a medical condition that arose while you are in the United States. If you were unable to leave the United States due to COVID-19 travel disruptions, you may be eligible to exclude up to 60 consecutive days in the United States during a certain period. See COVID-19 Medical Condition Travel Exception
Days you are in the United States under a NATO visa as a member of a force or civilian component to NATO. However, this exception does not apply to an immediate family member who is present in the United States under a NATO visa. A dependent family member must count every day of presence for purposes of the substantial presence test.
Days you are an exempt individual.
Form 1040-NR Dual Status Year.
A dual-status year is one in which you change status between nonresident and resident alien. Different U.S. income tax rules apply to each status.
Most dual-status years are the years of arrival or departure. Before you arrive in the United States, you are a nonresident alien. After you arrive, you may or may not be a resident, depending on the circumstances.
If you become a U.S. resident, you stay a resident until you leave the United States or are no longer a lawful permanent resident of the United States. You may become a nonresident alien when you leave if you meet both of the following conditions.
After leaving (or after your last day of lawful permanent residency if you met the green card test, defined earlier) and for the remainder of the calendar year of your departure, you have a closer connection to a foreign country than to the United States.
During the next calendar year, you are not a U.S. resident under either the green card test or the substantial presence test, defined earlier.
What and Where to File for a Dual-Status Year
If you were a U.S. resident on the last day of the tax year, file Form 1040 or 1040-SR. Enter "Dual-Status Return" across the top and attach a statement showing your income for the part of the year you were a nonresident. You can use Form 1040-NR as the statement; enter "Dual-Status Statement" across the top. Do not sign the Form 1040-NR.
Form 1040-NR Filing Deadline.
If you were an employee and received wages subject to U.S. income tax withholding, file Form 1040-NR by the 15th day of the 4th month after your tax year ends. A return for the 2020 calendar year is due by April 15, 2021.
If you file after this date, you may have to pay interest and penalties. See Interest and Penalties, later.
If you did not receive wages as an employee subject to U.S. income tax withholding, file Form 1040-NR by the 15th day of the 6th month after your tax year ends. A return for the 2020 calendar year is due by June 15, 2021.
IRS Form 1040-NR Penalties and Interest.
If you don't file your return by the due date (including extensions), the penalty is usually 5% of the amount due for each month or part of a month your return is late, unless you have a reasonable explanation. If you have a reasonable explanation for filing late, include it with your return. The penalty can be as much as 25% of the tax due. The penalty is 15% per month, up to a maximum of 75%, if the failure to file is fraudulent. If your return is more than 60 days late, the minimum penalty will be $435 or the amount of any tax you owe, whichever is smaller.
Late payment of tax.
If you pay your taxes late, the penalty is usually 1/2 of 1% of the unpaid amount for each month or part of a month the tax isn't paid. The penalty can be as much as 25% of the unpaid amount. It applies to any unpaid tax on the return. This penalty is in addition to interest charges on late payments.
You don't have to figure the amount of any interest or penalties you may owe. The IRS will send you a bill for any amount due. If you choose to include interest or penalties (other than the estimated tax penalty) with your payment, identify and enter the amount in the bottom margin
The IRS will charge you interest on taxes not paid by their due date, even if an extension of time to file is granted. They will also charge you interest on penalties imposed for failure to file, negligence, fraud, substantial or gross valuation misstatements, substantial understatements