What Form 1040NR-EZ Is For
Form 1040NR EZ is a simplified income tax return that the Internal Revenue Service uses for nonresident aliens with basic U.S.-source income. It applies when a foreign person earns wages, U.S.-source scholarship amounts, or effectively connected income through personal services performed in the United States. The form functions as a shorter alternative to the U.S. Nonresident Alien Income Tax Return. It excludes complex issues such as foreign-source income, branch profits tax, and foreign-earned income tax.
The form is appropriate only when no dependents are claimed, and no disallowed deductions or tax credits are included, such as the Premium Tax Credit, Form 2441, or Form 8962. It cannot be used for real property transactions, U.S.-source capital gain, inventory property sales, or situations requiring disclosures under Internal Revenue Code Sections or Publication 901. Individuals such as F-1 students, J-1 visa holders, and exempt individuals may still need to attach Form 8843 as required by Publication 519 and the Exempt Individual Decision Tree.
When Someone Must File Form 1040NR-EZ
A taxpayer must file this income tax return if they were nonresidents for taxes, earned U.S.-source income, and met the asset-use test or business-activities test for effectively connected income. Individuals relying on a W-2 form, Form 1042-S, or Form 1099-K reporting wages, scholarship grants, or FDAP income generally fall under this requirement. Filing applies even when income is limited and falls below the standard exemption thresholds.
The form cannot be used if income involves U.S. real property interests, head office allocations, or foreign corporation reporting through Form 1120-F. It also cannot be used if the return requires Form 1116, Schedule A, Schedule NEC, or any adjustments involving AMT taxable income, passive income categories, or gains and losses. Taxpayers leaving the United States must still file on time, using their Taxpayer Identification Number, and follow the rules outlined in Publication 505 and Publication 974.
For complete details on wage reporting, withholdings, and unemployment tax filings, see our guide for Individual Schedules.
Key Rules for 2014
Form 1040NR EZ is limited to straightforward individual income tax situations and excludes deductions such as the self-employed health insurance deduction or credits involving Form 4562, Form 4136, or Form 8829. The form cannot be used by anyone with foreign earned income tax exclusions, branch profits tax issues, or tax credits tied to Form 8962. The Internal Revenue Service only allowed specific deductions, such as state and local taxes. Most nonresident aliens could not use the standard deduction unless they qualified under a tax treaty.
Taxpayers claiming treaty benefits must rely on Publication 515, Publication 901, or the tax treaty map and must ensure no permanent establishment rules or Form 8833 disclosures apply. The form may not be used if the income involves U.S. business operations requiring withholding of tax reporting, Schedule NEC, or disclosures under Section 245(c)(4) of the Internal Revenue Code. Those subject to the Substantial Presence Test or classified as residents for taxes must instead use Form 1040.
Step-by-Step (High-Level)
Gather Necessary Documents
A taxpayer must collect all required documents, including a W-2 form for U.S. wages, Form 1042-S for scholarship income or FDAP income, and Form 1099-K or similar statements when applicable. They also need a valid Taxpayer Identification Number, such as an SSN or ITIN, and records of any state or local tax withholding.
Confirm Residency Status.
Residency classification was determined using the Substantial Presence Test and the rules outlined in Publication 519. Many F-1 students, J-1 exchange visitors, and exempt individuals remained nonresidents for several years.
Complete the Income Section
A taxpayer reported U.S.-source income that was determined to be effectively connected with a U.S. trade or business. This included wages, taxable scholarship income, and personal services income. The form cannot be used for foreign-earned income, passive income requiring Schedule NEC adjustments, or U.S. real property transactions.
Taxpayers applied only treaty benefits permitted under Publication 901, Publication 515, or the tax treaty map for the country. Effectively, foreign-earned income was taxed under the standard brackets.
Calculate Adjusted Gross Income and Tax
Eligible adjustments included limited deductions, such as student loan interest. A taxpayer used the tax tables to determine the Effectively Connected Income Tax. Only the state and local income tax was deductible unless the taxpayer qualified for a unique standard deduction exception available to certain Indian students.
Determine Refund or Amount Due
The taxpayer compared the withholding reported on W-2 or 1042-S forms with the calculated tax. If the return required repayment issues or offsets, Form 843 or related forms might apply. For 2014, taxpayers mailed paper returns because electronic filing options were limited. The PDF version and XML renditions were available in Federal Register records.
Common Errors and How to Avoid Them
- Incorrectly determining residency status: Review substantial presence rules and visa classifications to ensure the correct form is filed and avoid processing delays.
- Submitting returns with missing or mismatched information: Verify that all identifying numbers and employer-reported income match IRS records before filing.
- Failing to include required attachments: Attach Forms 8843, W-2, 1042-S, and any supporting documents needed for scholarship reporting or treaty benefits. to process
- Claiming treaty benefits incorrectly: Confirm that treaty disclosures align with Publication 901 or applicable agreements and avoid disallowed deductions or credits.
- Overlooking IRS guidance for special calculations: Follow instructions in Publication 974 and related resources to ensure accurate reporting and prevent mathematical errors.
What Happens After Filing
Taxpayers could track refunds through the Internal Revenue Service online system after processing began. Refunds related to Form 1042-S often require additional verification and could take several months. Refunds were subject to offsets for past federal or state debts. If the employer's tax return records did not match the tax return, the IRS issued a notice requesting clarification.
Taxpayers with U.S. trade or business involvement, passive income, or ECI tax issues must maintain complete records for at least three years. Individuals whose status changed during later years, such as meeting residency rules or obtaining U.S. citizenship, would need to use Form 1040 for subsequent filings.
FAQs
Can someone file Form 1040NR-EZ electronically?
Electronic filing was limited for 2014, so most individuals mailed paper returns.
What if the taxpayer leaves the United States before filing their tax return?
The filing deadline does not change. The taxpayer may mail the income tax return from abroad and include a foreign mailing address.
Are gambling winnings taxable to nonresidents?
Yes, gambling winnings from U.S. sources are taxable unless a tax treaty provides an exemption.
Does someone still need to file Form 8843?
Many F-1 students, J-1 visa holders, and other exempt individuals must file Form 8843, even if they owe no income tax.
Can a taxpayer claim tax treaty benefits?
A taxpayer may claim treaty benefits if the treaty provisions apply. If the treaty requires filing Form 8833, Form 1040NR-EZ cannot be used.
