Form 1040-ES (NR): U.S. Estimated Tax for Nonresident Alien Individuals - A Plain English Guide (2022)
What Form 1040-ES (NR) Is For
Form 1040-ES (NR) is the estimated tax payment package designed specifically for nonresident aliens who need to pay taxes on U.S. income throughout the year rather than waiting until they file their annual tax return. Think of it as a “pay-as-you-go” system for income that doesn't already have taxes taken out automatically.
If you're a nonresident alien earning income in the United States that isn't subject to withholding—such as income from self-employment, rental properties, or investments—you'll likely need to make quarterly estimated tax payments using this form. The system exists because the U.S. tax code requires taxpayers to pay taxes as they earn income, not just once a year. Making estimated payments helps you avoid a large tax bill (and potential penalties) when you file your annual Form 1040-NR.
The form includes a worksheet to help you calculate how much you should pay, payment vouchers for mailing checks, and instructions for various electronic payment methods. It covers both income effectively connected with a U.S. trade or business (taxed at graduated rates) and income not effectively connected with a U.S. trade or business (typically taxed at a flat thirty percent rate).
When You’d Use Form 1040-ES (NR) (Including Late and Amended Payments)
You must make estimated tax payments for 2022 if both of the following conditions apply: you expect to owe at least one thousand dollars in tax after subtracting your withholding and refundable credits, and your withholding and refundable credits will be less than the smaller of either ninety percent of the tax shown on your 2022 return or one hundred percent of the tax shown on your complete 2021 return.
However, there are important exceptions. You don't need to make estimated payments if you had no tax liability for 2021, were a U.S. citizen or resident alien for all of 2021, and your 2021 tax return covered a full twelve months. Special rules also apply to farmers, fishermen, and higher-income taxpayers that can change these thresholds.
Late Payments
If circumstances change during the year and you realize you should have been making estimated payments or that your payments should have been higher, you can (and should) start making or increase your payments immediately. Missing the early payment deadlines doesn't exempt you from making later ones. The IRS does not send reminder notices, so you're responsible for tracking due dates yourself.
Amended Payments
If your income, deductions, or tax situation changes significantly during the year, you should recalculate your estimated tax using the worksheet and adjust your remaining payments accordingly. To amend your estimated tax, refigure your total estimated tax due and then determine the payment amount for each remaining payment period. If you've underpaid in earlier periods, you may owe a penalty even after making up the difference in later payments. For uneven income throughout the year, you may benefit from using the annualized income installment method, which requires filing Form 2210 with Schedule AI when you submit your annual return.
Key Rules or Details for 2022
First, understand the payment threshold requirements. Generally, you must make estimated payments if you expect to owe at least one thousand dollars in tax and your withholding plus refundable credits will fall short of the “safe harbor” amount—whichever is smaller: ninety percent of your current year's tax or one hundred percent of your prior year's tax.
Second, know the special percentage rules. Farmers and fishermen (those earning at least two-thirds of their gross income from these activities) can substitute sixty-six and two-thirds percent for the standard ninety percent threshold. Higher-income taxpayers (those with adjusted gross income over one hundred fifty thousand dollars, or seventy-five thousand dollars if filing as married nonresident alien) must use one hundred ten percent instead of one hundred percent when comparing to their prior year's tax.
Third, nonresident aliens cannot make joint estimated tax payments with their spouse if either spouse is a nonresident alien, if they're separated under a decree of divorce or separate maintenance, or if they have different tax years. This differs from the rules for U.S. residents and citizens.
Fourth, payment timing matters immensely. The IRS doesn't send reminders, and late payments accrue penalties based on how many days they remain unpaid. Even if you eventually overpay for the year, you can still owe an underpayment penalty if individual quarterly payments were insufficient or late.
Fifth, certain taxes should not be included in your estimated tax calculations. Don't include uncollected social security and Medicare taxes, recapture of federal mortgage subsidies, excise taxes on excess golden parachute payments or insider stock compensation, or look-back interest. These taxes aren't required to be paid until your income tax return is due.
Step-by-Step (High Level)
Step One – Determine if you need to make payments
Review your expected 2022 income and compare your withholding plus refundable credits against the safe harbor thresholds. If both requirements apply (expecting to owe at least one thousand dollars and falling short of the safe harbor), you must make estimated payments.
Step Two – Calculate your estimated tax
Use the 2022 Estimated Tax Worksheet included with the form. You'll need your 2021 tax return, the 2022 tax rate schedules for your filing status, and estimates of your 2022 income, deductions, and credits. The worksheet guides you through calculating your adjusted gross income, itemized deductions or standard deduction, tax liability, and the amount of estimated tax you need to pay.
Step Three – Determine your payment schedule
If you have wages subject to U.S. income tax withholding, you can either pay your entire estimated tax by April eighteenth or make four equal payments on April eighteenth, June fifteenth, September fifteenth, and January seventeenth. If you don't have wages subject to withholding, you can pay everything by June fifteenth or make three installments: half by June fifteenth, one-quarter by September fifteenth, and one-quarter by January seventeenth. You can skip the January payment if you file your 2022 Form 1040-NR by January thirty-first, 2023, and pay your entire balance due.
Step Four – Choose your payment method
The IRS offers numerous payment options. Electronic methods include IRS Direct Pay (free bank transfer), debit or credit card payments (with convenience fees), Electronic Funds Withdrawal when e-filing, the IRS2Go mobile app, and the Electronic Federal Tax Payment System. You can also pay by phone through service providers or EFTPS, mail a check or money order with your payment voucher to the IRS address in Charlotte, or even pay cash at retail partners (with a one-thousand-dollar daily limit and required registration).
Step Five – Keep records
Use the Record of Estimated Tax Payments table included with the form to track when you made payments, how much you paid, your check or confirmation numbers, and any overpayment credits you applied. These records prove essential if questions arise about your payments or if you need to amend your estimated tax.
Common Mistakes and How to Avoid Them
Mistake One – Missing payment due dates
Since the IRS doesn't send reminders, many taxpayers simply forget to make payments. Set calendar alerts for all four due dates when you make your first payment. Even better, consider setting up automatic payments through EFTPS or scheduling payments in advance through IRS Direct Pay.
Mistake Two – Attempting joint payments when ineligible
Nonresident aliens often mistakenly try to make joint estimated payments with their spouse, which isn't allowed if either spouse is a nonresident alien. Each nonresident alien spouse must make separate estimated payments using their own identifying number.
Mistake Three – Failing to update information with the IRS
If you change your name or address, file Form 8822 to update your records. If your Social Security number changes, report it to the Social Security Administration before filing your return. These administrative oversights can delay return processing and refund issuance.
Mistake Four – Not adjusting payments when circumstances change
Many taxpayers calculate estimated payments at the beginning of the year and never revisit them, even when their income changes substantially. If you get a raise, start a side business, or have other income changes, recalculate your estimated tax obligation and adjust your remaining payments. Waiting until year-end to make corrections guarantees underpayment penalties.
Mistake Five – Forgetting to credit prior-year overpayments
If you overpaid taxes in 2021 and elected to apply the overpayment to 2022 estimated taxes, you must account for this credit when making payments. Don't double-pay by sending the full calculated amount and also having a credit applied—track your actual payment obligations carefully.
Mistake Six – Including taxes that shouldn't be included
Some taxpayers include household employment taxes, certain retirement plan taxes, or other specialty taxes in their estimated payments when they shouldn't. Read the form instructions carefully to understand which taxes belong on the estimated tax worksheet and which don't.
Mistake Seven – Making unnecessary January payments
If you can file your complete tax return by January thirty-first and pay your full balance due, you can skip the fourth estimated payment entirely. Many taxpayers unnecessarily make the January payment when they could have avoided it.
What Happens After You File
Once you make estimated tax payments, the IRS credits them to your account under your identifying number (Social Security number, Individual Taxpayer Identification Number, or Employer Identification Number for estates and trusts). These payments appear on your account and get applied against your tax liability when you file your annual Form 1040-NR.
The IRS doesn't send confirmation receipts for mailed check payments, though electronic payment methods typically provide confirmation numbers you should retain for your records. You'll see all your estimated payments listed when you file your annual return, and they'll reduce the amount you owe or increase your refund.
If you underpaid your estimated taxes, the IRS will calculate an underpayment penalty when you file your annual return. This penalty accrues based on the federal short-term interest rate plus three percentage points, applied to each underpayment for the number of days it remained unpaid. The penalty can apply even if you ultimately overpaid for the year—what matters is whether each quarterly payment was sufficient. In some cases, the IRS will calculate the penalty automatically; in others, you may need to complete Form 2210. The penalty may be waived under certain limited circumstances described in the Form 2210 instructions.
If you overpaid, you have options when filing your annual return. You can request a refund of the excess, or you can apply all or part of the overpayment to your next year's estimated tax. Whatever you choose, make sure your records accurately reflect any credits you're carrying forward so you don't overpay the following year.
Your payment information remains confidential under federal tax law, though the IRS may share it with other government agencies for law enforcement purposes, with state and local tax authorities to administer their tax laws, or with foreign governments under tax treaties.
FAQs
Can I avoid making estimated payments by having more tax withheld from my wages?
Yes, absolutely. If you receive wages subject to U.S. income tax withholding, you can file a new Form W-4 with your employer requesting additional withholding. The IRS offers a Tax Withholding Estimator tool on their website that helps determine whether increasing withholding could eliminate your need for estimated payments. This approach can be simpler than making quarterly payments, especially if your non-wage income is relatively modest.
What if I realize mid-year that I should have been making estimated payments but didn't?
Start making payments as soon as you realize you're required to. While you may owe an underpayment penalty for the periods you missed, making payments for the remaining periods will minimize the penalty. Calculate what you should have paid for the entire year, subtract any payments already made and withholding, and pay the remainder in your upcoming installments. You might consider using the annualized income installment method on Form 2210 when you file your annual return, which could reduce or eliminate penalties if your income came in unevenly throughout the year.
Do farmers and fishermen really have different rules, and how do I know if I qualify?
Yes, if at least two-thirds of your gross income for 2021 or 2022 comes from farming or fishing, you qualify for special treatment. You can pay your entire estimated tax by January seventeenth, or file your complete 2022 tax return by March first, 2023, and pay everything then. If you use these extended deadlines and pay in full on time, you won't owe any underpayment penalty even though you made no quarterly payments. The percentage threshold for required payments also drops from ninety percent to sixty-six and two-thirds percent.
How do I know which tax rate schedule to use if I'm a nonresident alien?
Most nonresident aliens use Schedule X (Single) unless they're married. However, married nonresident aliens generally must use Schedule Y (Married Filing Separately) rather than filing jointly, since you typically cannot make joint returns when either spouse is a nonresident alien. Chapter 5 of IRS Publication 519 explains the specific exceptions to this rule. The form package includes all the necessary tax rate schedules for 2022.
What payment method is fastest and safest?
Electronic payment methods are generally fastest and safest. IRS Direct Pay offers free same-day or next-day transfers directly from your bank account with immediate confirmation. The Electronic Federal Tax Payment System requires enrollment but provides robust tracking and scheduling features. Credit and debit card payments process immediately but incur convenience fees charged by the service providers. Checks sent by mail can take weeks to process and don't provide automatic confirmation, making them the slowest and least traceable option.
Can the underpayment penalty be waived, and what circumstances qualify?
The underpayment penalty can be waived in certain limited circumstances, but reasonable cause alone isn't sufficient. Circumstances that may qualify include casualty, disaster, or other unusual circumstances where imposing the penalty would be inequitable, or if you retired after reaching age sixty-two or became disabled during the tax year or the preceding tax year and the underpayment was due to reasonable cause and not willful neglect. You must file Form 2210 with your return and provide a written explanation to request a waiver. The IRS examines each request individually.
What should I do if I made estimated payments under my former name but changed my name during the year?
Attach a statement to the front of your 2022 paper tax return showing all estimated payments you made, including the name and identifying number under which you made each payment. If your identifying number is a Social Security number, report the name change to the Social Security Administration before filing your return to prevent processing delays. If you have an Individual Taxpayer Identification Number, you don't need to contact Social Security, but you should still attach the statement showing your payment history under both names.
For the most current information and forms, visit IRS.gov/Form1040ESNR.
