Form 1040-NR: U.S. Nonresident Alien Income Tax Return (2021) – A Complete Guide

What the Form Is For

Form 1040-NR is the tax return that nonresident aliens use to report their U.S. income and pay federal income taxes. If you're not a U.S. citizen or green card holder and you don't meet the substantial presence test (which generally requires you to be physically present in the United States for at least 183 days during a three-year period), you're considered a nonresident alien for tax purposes.

Unlike U.S. citizens and residents, who must report their worldwide income, nonresident aliens generally only report income from U.S. sources. This form handles two distinct types of income differently:

Effectively connected income (ECI) – typically from operating a business or performing services in the United States, such as wages from U.S. employment or profits from a U.S. business. This income is reported on page 1 of Form 1040-NR and taxed at the same graduated rates that apply to U.S. citizens, after allowable deductions.
Fixed, determinable, annual, or periodical income (FDAP) – items like dividends, interest, royalties, and pensions from U.S. sources that aren’t connected to a U.S. business. This income is reported on Schedule NEC (Tax on Income Not Effectively Connected With a U.S. Trade or Business) and taxed at a flat 30% rate with no deductions allowed, unless a tax treaty provides a lower rate.

You must also complete Schedule OI (Other Information), which collects important details about your immigration status, visa type, country of residence, and any tax treaty benefits you’re claiming. Additional numbered schedules (Schedules 1, 2, and 3) may be required if you have additional income, taxes, credits, or payments to report.

When You’d Use It (Including Late and Amended Returns)

Regular Filing Deadlines

The deadline for filing Form 1040-NR depends on your employment status and U.S. business presence:

If you were an employee who received wages subject to U.S. income tax withholding during 2021, or if you had an office or place of business in the United States, your return was due April 18, 2022 (the 15th day of the 4th month after the tax year ends; the date shifted from April 15 because of Emancipation Day in D.C.).
If you weren’t an employee receiving wages subject to withholding and had no U.S. office or place of business, your deadline was June 15, 2022 (the 15th day of the 6th month after the tax year ends).

You can request an automatic extension of time to file by submitting Form 4868 by your regular due date. The extension gives you more time to file, not more time to pay—interest (and possibly penalties) still accrues on any unpaid tax after the original due date.

Late Filing and the 16-Month Rule

If you miss the original deadline, you should still file as soon as possible. Filing late triggers interest and penalties that accumulate from the due date, but filing eventually is far better than never filing at all.

There’s a critical 16-month rule: if you want to claim deductions or credits, you must file within 16 months of the original due date. The IRS can deny all deductions and credits on returns filed later than that.

Example: If your original due date was April 18, 2022, you generally needed to file by August 18, 2023 to preserve your right to claim deductions and credits. Filing after that means you’re usually limited to reporting income and paying tax with no deductions.

Amended Returns

If you discover errors or omissions after filing, you can file an amended return using Form 1040-X (Amended U.S. Individual Income Tax Return).

For tax years 2019 and later, if you e-filed your original Form 1040-NR, you can usually e-file your amended return as well.
For earlier years, amended returns must be mailed.

In general, you have:

3 years from the date you filed the original return, or
2 years from the date you paid the tax (whichever is later)

to file an amended return and claim a refund.

Key Rules for Nonresident Filers

Who Must File

You must file Form 1040-NR for 2021 if any of the following apply:

You were a nonresident alien engaged in a U.S. trade or business at any time during 2021 (even if you had no income, no U.S. source income, or your income was fully exempt under a tax treaty).
You were a nonresident alien not engaged in a U.S. trade or business but had U.S. source income on which the full tax was not withheld at source.
You owe special taxes such as alternative minimum tax, tax on certain retirement accounts, or household employment taxes.
You received advance payments of the premium tax credit or health coverage tax credit for health insurance purchased through the Marketplace.
You are the representative of a deceased nonresident alien who would have been required to file.

You may not have to file if:

You are a student, teacher, or trainee temporarily present in the U.S. on an F, J, M, or Q visa and have no taxable income under section 871.
You’re a student or business apprentice eligible for benefits under Article 21(2) of the U.S.–India Income Tax Treaty and your income is below the relevant thresholds.
You are a partner in a U.S. partnership not engaged in a U.S. trade or business and your only U.S. income is reported on Schedule K-1 and taxed as NEC on Schedule NEC.

Filing Status Restrictions

Nonresident aliens have limited filing status options:

You cannot file as Married Filing Jointly or Head of Household.
Your options are generally:
- Single
- Married Filing Separately
- Qualifying Surviving Spouse (rare for nonresidents)

Even if you are married, you usually must select Married Filing Separately, unless:

Your spouse is a U.S. citizen or resident alien, and
You both elect to treat the nonresident spouse as a U.S. resident for tax purposes (in which case you’d file Form 1040, not 1040-NR, and report worldwide income).

Limited Tax Benefits

Many tax benefits available to U.S. residents are restricted or unavailable to nonresident aliens:

The standard deduction is generally not allowed, except for certain students/business apprentices from India under Article 21(2) of the U.S.–India treaty.
Child-related credits (child tax credit, credit for other dependents, additional child tax credit, premium tax credit) are:
- Fully available mainly to residents of Canada and Mexico, and
- Partially or specially available to some residents of India and South Korea under treaty rules.
The earned income credit is never available to Form 1040-NR filers.

Tax Treaty Benefits

If your country has an income tax treaty with the United States, you may qualify for reduced tax rates or exemptions on some income.

To claim treaty benefits, you must:

Be a resident of the treaty country for tax purposes.
Complete Schedule OI, item L, identifying:
- The treaty country
- The specific treaty article
- The number of months in prior years you claimed the benefit
- The amount of treaty-exempt income in the current year

Some treaty positions also require Form 8833 (Treaty-Based Return Position Disclosure).

Dual-Status Considerations

If your residency status changed during 2021 (for example, you arrived in or left the U.S. mid-year), you may be a dual-status taxpayer. In that case:

Part of the year you’re treated as a nonresident, and
Part of the year you’re treated as a resident.

Dual-status returns are more complex and usually require:

A main return (Form 1040 or 1040-NR, depending on whether you were resident or nonresident at year-end), and
An attached statement showing income and adjustments for the other part of the year.

Step-by-Step Filing Process (High Level)

Step 1: Gather Your Documents

Collect all relevant 2021 tax documents, including:

Form W-2 – wages from U.S. employers
Form 1042-S – U.S. tax withheld on payments to nonresident aliens
1099 series – interest, dividends, freelance/contract income, etc.
SSA-1042S or RRB-1042S – Social Security or railroad retirement benefits
Form 8288-A – withholding on sales of U.S. real property
Form 8805 – withholding on effectively connected income from partnerships

You’ll also need:

Your SSN or ITIN
Identification numbers for any dependents you plan to claim

Step 2: Confirm Your Filing Requirements and Status

Verify you are a nonresident alien for 2021 (green card test / substantial presence test).
Determine if you were engaged in a U.S. trade or business and whether you had wages subject to withholding (this affects both your filing deadline and how you report income).
Identify any potential tax treaty benefits.

Step 3: Complete Schedule OI (Required for Everyone)

Every Form 1040-NR filer must complete Schedule OI (Other Information). It asks about:

Your immigration status and visa type
Number of days present in the U.S.
Your country of residence
Whether you are claiming treaty benefits
Prior years you claimed similar benefits

Answer every question completely and accurately—blank answers can delay processing.

Step 4: Report Effectively Connected Income (ECI)

On page 1 of Form 1040-NR, report all income effectively connected with a U.S. trade or business, including:

Wages, salaries, tips – line 1
Business income or loss from Schedule C – line 3
Capital gains or losses from Schedule D – line 4
Other gains or losses – line 5
Rental real estate, royalties, etc. from Schedule E – line 6
Other effectively connected income – lines 7 and 8

These items are handled similarly to income reported by U.S. residents, but under nonresident rules.

Step 5: Report Non-Effectively Connected Income (FDAP)

For U.S. source income not effectively connected with a trade or business, complete Schedule NEC. This typically includes:

U.S. dividends
Certain interest
Royalties
Some pensions and annuities

On Schedule NEC:

List each type of income in the appropriate rate column (30%, 15%, 10%, or other including 0% if treaty-exempt).
Schedule NEC computes the tax on this income.
Transfer the result to page 2, line 23a of Form 1040-NR.

Step 6: Deductions, Adjustments, and Credits

If you have ECI and are eligible, you may claim itemized deductions using Schedule A (Form 1040-NR) (note this is not the same as Schedule A for Form 1040).

You may also need to complete:

Schedule 1 – additional income and adjustments to income
Schedule 2 – additional taxes
Schedule 3 – additional credits and payments

Remember that:

The standard deduction is generally not allowed (unless covered by a treaty exception, such as some Indian students/business apprentices).
Many credits available to residents are limited or unavailable to nonresident aliens.

Step 7: Calculate Your Total Tax

Use the appropriate tax tables or tax computation worksheet to compute tax on ECI.
Add tax from Schedule NEC (non-ECI).
Include any additional taxes from Schedule 2 (e.g., certain retirement account taxes, AMT).

Step 8: Apply Payments and Determine Refund or Amount Owed

Add up all payments and credits, including:

Federal income tax withheld on Forms W-2 and 1042-S
Tax withheld on Forms 1099-R, 8288-A, 8805, etc.
Estimated tax payments you made during 2021
Any refundable credits you’re eligible for

Compare your total payments to your total tax:

If payments > tax → you’re due a refund (you can choose direct deposit).
If payments < tax → you owe the difference.

Step 9: Sign, Attach, and File

Sign and date the return. If you’re married filing separately and both are required to sign, both spouses sign.
Attach:
- Forms W-2, 1042-S, SSA-1042S, RRB-1042S, 2439, 8288-A to the front of the return.
- Form 1099-R (if tax was withheld) to the front.
- Form 8805 to the back.

Most paid preparers must e-file Form 1040-NR. E-filing is faster and more secure than mailing a paper return, but you can still paper-file if allowed.

Common Mistakes and How to Avoid Them

1. Missing or Incorrect Identification Numbers

Omitting your SSN/ITIN or dependent ID numbers, or entering them incorrectly, can cause delays or rejection.
Double-check all ID numbers on page 1 and for each dependent.

2. Using the Wrong Schedules

Form 1040-NR filers must use Schedule A (Form 1040-NR), not Schedule A for Form 1040.
Use Schedule NEC for non-effectively connected income; don’t try to report it on the main form as if it were ECI.

3. Claiming Tax Benefits You’re Not Eligible For

Common incorrect claims include:

Standard deduction (unless you qualify under a treaty, such as certain Indian students/apprentices).
Earned income credit (never available to nonresident filers).
Child tax credits without meeting the strict nonresident rules (only certain residents of Canada, Mexico, South Korea, or treaty-eligible individuals qualify).

Always confirm eligibility before claiming any deduction or credit.

4. Wrong Filing Status

Checking “Married Filing Jointly” or “Head of Household” is a serious mistake—these are generally not allowed for nonresident aliens.
Most nonresidents must file as Single or Married Filing Separately, unless they’ve made a special election to be treated as U.S. residents and file Form 1040 instead.

5. Failing to Attach Required Forms

Not attaching W-2s, 1042-S, 1099-R (with withholding), 8805, 8288-A, etc., slows processing and may delay or reduce your refund.
Follow the attachment order in the instructions.

6. Misclassifying ECI vs. FDAP Income

Treating investment income as ECI or business income as NEC will distort your tax.
ECI → report on main form, taxed at graduated rates with deductions.
FDAP (non-ECI) → report on Schedule NEC, taxed at flat rates (30% or treaty rate) with no deductions.

7. Incomplete Schedule OI

Schedule OI is required for every filer.
Leaving questions blank (visa type, days in U.S., treaty information, etc.) can trigger IRS questions and delays.

What Happens After You File

Processing Time and Refunds

Typical processing times:

E-filed returns: around 3 weeks for standard cases.
Paper returns: about 6–8 weeks.
Returns claiming refunds based on Forms 1042-S, 8805, or 8288-A may take up to 6 months due to extra verification.

You can check your refund status:

Online at IRS.gov/Refunds
Via the automated hotline 800-829-1954
Using the IRS2Go mobile app

You’ll need your SSN/ITIN, filing status, and exact refund amount.

Refund delivery:

Direct deposit to a U.S. bank account (fastest), including for many late returns.
Paper check mailed to the address on your return if direct deposit fails or isn’t requested.

If You Owe Tax

If you didn’t pay the full amount by the original due date:

Interest accrues daily from the original due date on any unpaid tax.
You may owe:
- A failure-to-file penalty (typically 5% of unpaid tax per month, up to 25%).
- A failure-to-pay penalty (typically 0.5% of unpaid tax per month, up to 25%), on top of interest.

Payment options:

IRS Direct Pay (from a U.S. bank account)
EFTPS (Electronic Federal Tax Payment System)
Debit or credit card (fees apply)
Check or money order (for mailed returns within the U.S.)

If you can’t pay in full:

Consider a short-term payment plan (120 days or less) or a long-term installment agreement.
Setup fees are lower if you apply online and use direct debit.

IRS Notices and Amending Your Return

The IRS may contact you by mail if they:

Need more information
Adjust your return
Select your return for examination

Always respond by the stated deadline. If you disagree, you have appeal rights explained in the notice.

If you later spot an error:

File Form 1040-X to amend.
Use it to correct income, deductions, credits, filing status, or dependent information.
The usual deadline for refund claims is 3 years from filing the original return (or 2 years from payment, if later).

Future Obligations and Departure from the U.S.

Even after you leave the United States, you may still have U.S. filing obligations if you:

Continue to earn U.S. source income, or
Remain engaged in a U.S. trade or business.

If you’re leaving the U.S. permanently or for a long period:

You may need a “sailing permit” (departure permit) by filing Form 1040-C or Form 2063 before you leave.
This does not replace Form 1040-NR—you still file your annual return for the year.

Frequently Asked Questions

What’s the difference between a nonresident alien and a resident alien for tax purposes?

Your tax residency is determined by the green card test or the substantial presence test, not just your visa:

Resident alien – holds a green card or meets the substantial presence test (31 days in current year and 183 days over 3 years using a weighted formula). Residents file Form 1040 and report worldwide income.
Nonresident alien – doesn’t meet those tests. Nonresidents file Form 1040-NR and generally report only U.S. source income.

Certain students and visa holders are “exempt individuals” for counting days and may remain nonresident for several years.

Can I file Form 1040-NR jointly with my spouse?

Generally, no. Nonresident aliens cannot use Married Filing Jointly status. Each spouse typically files their own Form 1040-NR.

Exception: if one spouse is a U.S. citizen or resident, you can jointly elect to treat the nonresident spouse as a U.S. resident for the entire year. In that case:

You file Form 1040 (not 1040-NR).
You must report worldwide income for both spouses.

This election can sometimes reduce overall tax but needs careful consideration.

How do I know if my income is effectively connected with a U.S. trade or business?

Generally, income is effectively connected if:

You performed services as an employee or contractor in the U.S.
You operated a business in the U.S.
You earned rental or real estate income from U.S. property and elected to treat it as ECI.

Investment income (dividends, interest, royalties) is usually FDAP, not ECI, unless it arises from assets used in your U.S. business or you make a special election.

What if I don’t have a Social Security Number?

If you’re not eligible for an SSN but must file a U.S. tax return, you need an ITIN:

Apply using Form W-7.
File it with your tax return or in advance.
Provide proof of identity and foreign status (originals or certified copies).

Dependents you claim also need SSNs, ITINs, or ATINs.

Can a tax treaty reduce or eliminate my U.S. tax?

Yes, if your country of residence has a tax treaty with the U.S. and:

You are a tax resident there under that treaty, and
Your income fits within a specific treaty article.

Common treaty provisions cover:

Reduced withholding on dividends, interest, royalties
Exemptions for scholarships/fellowships
Special rules for students and teachers

You claim these benefits on Schedule OI, item L, and sometimes via Form 8833. If too much tax was withheld, you can often claim a refund by filing Form 1040-NR.

I was on an F-1 student visa with scholarship income only. Do I have to file?

Maybe:

Scholarship and fellowship amounts used for tuition, fees, books, supplies, and required equipment are generally not taxable.
Amounts used for room, board, travel, or other personal expenses are taxable.
Payments for services (teaching, research, etc.) are treated as wages and taxable.

If you had any taxable income, you generally must file Form 1040-NR. Even if you don’t have a filing requirement, you may want to file to claim a refund of any tax withheld.

How long does a refund based on Form 1042-S withholding take?

Refunds involving Form 1042-S, Form 8805, or Form 8288-A usually take longer:

Standard refunds: ~3 weeks (e-file) or 6–8 weeks (paper).
Refunds relying on those forms: up to 6 months due to extra verification of withholding and treaty claims.

To help avoid delays:

Attach all supporting forms.
Complete Schedule OI thoroughly and accurately.

You can still track progress at IRS.gov/Refunds, but expect a longer timeline.

For official instructions, current forms, and detailed guidance, see the IRS page for Form 1040-NR and Publication 519 (U.S. Tax Guide for Aliens) on IRS.gov.

‍

Checklist for Form 1040-NR: U.S. Nonresident Alien Income Tax Return (2021) – A Complete Guide