Form 1040-ES (NR): U.S. Estimated Tax for Nonresident Alien Individuals (2021)

If you're a nonresident alien earning income in the United States, understanding your tax obligations can feel overwhelming. Form 1040-ES (NR) is your tool for paying taxes throughout the year on income that isn't automatically withheld. This guide breaks down everything you need to know in plain language, based on authoritative information from the IRS.

What Form 1040-ES (NR) Is For

Form 1040-ES (NR) is the estimated tax payment package specifically designed for nonresident aliens who need to pay U.S. taxes on their American income throughout the year rather than all at once at tax time. Think of estimated tax as the pay-as-you-go method for covering taxes on income that doesn't have withholding—such as self-employment earnings, rental income, investment returns, or business profits effectively connected with a U.S. trade or business.

Unlike U.S. residents who automatically have taxes withheld from their paychecks, many nonresident aliens receive income without any withholding, or the withholding isn't enough to cover their full tax liability. This form helps you calculate how much you should pay quarterly to avoid owing a large sum when you file your annual return (Form 1040-NR). The package includes worksheets to estimate your annual tax liability, payment vouchers to submit with checks or money orders, and instructions for making electronic payments IRS.gov.

Estimated tax payments aren't an extra tax—they're advance payments toward your annual tax bill. When you file your yearly Form 1040-NR, you'll calculate your total tax and subtract any estimated payments you've made. If you paid enough through estimated taxes, you might even receive a refund; if you didn't pay enough, you'll owe the difference (and possibly penalties).

When You’d Use Form 1040-ES (NR) (Late Payments/Amended Estimates)

You're required to make estimated tax payments for 2021 if two conditions apply: you expect to owe at least one thousand dollars in tax after subtracting withholding and refundable credits, and you expect your withholding and credits to be less than the smaller of either ninety percent of your 2021 tax or one hundred percent of your 2020 tax (assuming your 2020 return covered all twelve months). Special variations of these percentages apply for farmers, fishermen, and higher-income taxpayers.

The standard payment schedule divides your estimated tax into four installments. If you receive wages subject to U.S. income tax withholding, your payments are due April 15, June 15, and September 15 of 2021, with a final payment on January 18, 2022. However, you can skip that final payment if you file your complete 2021 Form 1040-NR and pay all taxes due by January 31, 2022. For nonresident aliens without wage withholding, the schedule is different: pay one-half by June 15, one-quarter by September 15, and one-quarter by January 18.

Life doesn't always follow neat quarterly projections. If your income, deductions, or tax situation changes significantly during the year, you can amend your estimated tax calculations. To do this, recalculate your total annual estimated tax using the worksheet in the form package, then figure out how much you still need to pay in the remaining installments. If a previous installment turns out to have been too small based on your amended calculation, you might owe a penalty when you file, but adjusting your remaining payments can minimize additional penalties. The annualized income installment method can be particularly helpful if your income arrives unevenly—for example, if you're a seasonal business owner or receive a large capital gain late in the year IRS.gov.

Key Rules or Details for 2021

Several important rules govern estimated tax payments for nonresident aliens. First, you cannot make joint estimated tax payments with your spouse if either of you is a nonresident alien, if you're separated under a divorce or separate maintenance decree, or if you have different tax years. Each spouse must calculate and pay separately.

The IRS doesn't send reminders when your quarterly payments are due—the responsibility falls entirely on you to remember and pay on time. Even if your final tax return shows an overpayment, you can still be charged penalties if you underpaid estimated taxes during specific payment periods or made payments late. This penalty accrues daily on each underpayment for as long as it remains unpaid.

Higher-income taxpayers face stricter requirements. If your adjusted gross income for 2020 exceeded one hundred fifty thousand dollars (or seventy-five thousand if you'll file as married nonresident alien for 2021), you must use one hundred ten percent (not one hundred percent) of your 2020 tax when calculating your safe harbor amount. Farmers and fishermen have more lenient rules: if at least two-thirds of gross income comes from farming or fishing, you can pay all estimated tax by January 18, 2022, or file your complete return by March 1, 2022, with full payment IRS.gov.

Your withholding situation matters significantly. If you also receive salaries or wages with withholding, you might be able to avoid making separate estimated tax payments by increasing your withholding through a new Form W-4 with your employer. The IRS offers a Tax Withholding Estimator online to help determine the right withholding amount.

Step-by-Step (High Level)

Making estimated tax payments involves five main steps. Start by gathering your information: you'll need your 2020 tax return, projections for your 2021 income and deductions, and the current year's tax rate schedules included in the Form 1040-ES (NR) package. Consider any major life or financial changes that might affect your 2021 taxes.

Next, complete the Estimated Tax Worksheet provided in the form package. Walk through each line: estimate your adjusted gross income, subtract your expected itemized deductions or take any applicable business income deduction under section 199A, calculate your tax using the rate schedules, add self-employment tax and other taxes, subtract credits, and add back refundable credits to determine your total estimated tax liability. Then apply the safe harbor test by comparing ninety percent of your current year's tax to one hundred percent (or one hundred ten percent for high earners) of last year's tax.

Calculate your required payment amount. Subtract any income tax you expect to be withheld during 2021 from your required annual payment. If the result is less than one thousand dollars, you're not required to make estimated payments. If it's one thousand dollars or more, divide by four (or use the appropriate fractions if you started earning income later in the year or don't have wage withholding).

Choose your payment method from several options. You can pay electronically through IRS Direct Pay (free bank transfer), by debit or credit card through authorized providers (with convenience fees), through the Electronic Federal Tax Payment System after enrolling, or via the IRS2Go mobile app. Alternatively, mail a check or money order with the payment voucher to the Charlotte, North Carolina address listed on the form. A newer option allows cash payments up to one thousand dollars per day at participating retail partners. Each method requires you to reference ""2021 Form 1040-ES (NR)"" and include your Social Security Number, Individual Taxpayer Identification Number, or Employer Identification Number.

Finally, maintain detailed records using the Record of Estimated Tax Payments table provided in the form package. Track each payment date, amount, check number or confirmation number, and any overpayment credit from 2020 that you're applying. Keep these records with your tax files—you'll need them when preparing your annual return IRS.gov.

Common Mistakes and How to Avoid Them

Many nonresident aliens make predictable errors with estimated tax payments. The most common mistake is simply missing payment deadlines because they forget or assume they'll receive a reminder notice. The IRS does not send reminders—mark all four due dates on your calendar as soon as you know you need to make estimated payments.

Another frequent error involves applying the wrong percentages when calculating safe harbor amounts. High-income taxpayers must use one hundred ten percent of prior year tax, not one hundred percent, if their 2020 adjusted gross income exceeded the thresholds. Farmers and fishermen should use sixty-six and two-thirds percent instead of ninety percent for current year estimates. Using the standard percentages when you fall into a special category will result in underpayment.

Many nonresidents attempt to make joint estimated payments with their spouse, unaware this isn't permitted when either spouse is a nonresident alien. Each must calculate and pay separately even if they'll eventually file together under certain treaty provisions. Related to this, some taxpayers use an incorrect identification number on payment vouchers—use your SSN or ITIN for individual returns, but use the EIN if paying for a nonresident alien estate or trust.

Failing to account for household employment taxes when required is another pitfall. If you employ household workers and have other income with withholding, or if you'd owe estimated tax even without the household employment taxes, you must include these amounts in your estimated tax calculations. Overlooking them creates an underpayment situation.

Administrative oversights also cause problems. If you move during the year, file Form 8822 to update your address—otherwise, refunds may go to the wrong place or correspondence may not reach you. If you change your name due to marriage or divorce, attach a statement to your paper return listing all estimated tax payments made under your former name. When mailing payments, don't send cash (always use checks or money orders), don't staple your payment to the voucher, and be aware that the IRS cannot accept any single check for one hundred million dollars or more IRS.gov.

What Happens After You File

After making each estimated tax payment, you won't receive confirmation or acknowledgment from the IRS in most cases. Electronic payment methods typically provide immediate confirmation numbers that you should save. For mailed payments, keep copies of your checks and vouchers. The postmark date is considered your payment date if you mail within the United States, so always send payments with enough time to arrive by the due date.

The IRS doesn't monitor your situation throughout the year or alert you to problems until after you file your annual return. You're responsible for keeping accurate records of all payments made. Use the Record of Estimated Tax Payments table in the form package to track dates, amounts, and confirmation information for each installment.

When you file your 2021 Form 1040-NR in 2022, you'll report your total estimated tax payments on the designated line. The IRS will verify these payments against their records. If you overpaid through estimated taxes and withholding, you'll receive a refund (which you can choose to apply toward your 2022 estimated tax instead). If you underpaid, you'll owe the balance—plus potential penalties and interest if the underpayment was significant.

Penalties for underpayment are calculated based on how much you underpaid, when you underpaid it, and for how long the underpayment remained unpaid. The penalty accrues daily like interest. Even if your final return shows an overpayment, you might owe penalties for specific quarters where you didn't pay enough. Form 2210 is used to calculate these penalties, though the IRS will often calculate them for you and send a bill. Some penalty waivers are available in specific circumstances, such as casualty or disaster situations, recent retirement or disability, or reasonable cause IRS.gov.

FAQs

Do I need to make estimated tax payments if I have withholding from my wages?

Maybe not. If your withholding will cover at least ninety percent of your 2021 tax liability (or one hundred percent of your 2020 tax), you don't need to make separate estimated payments. However, if you have significant additional income beyond your wages—such as self-employment income, rental income, or investments—withholding alone might not be sufficient. Calculate your total expected tax using the worksheet, subtract expected withholding, and see if you'll owe at least one thousand dollars. Alternatively, you can ask your employer to increase your withholding by filing a new Form W-4, which might eliminate the need for separate estimated payments.

Can my spouse and I make joint estimated tax payments?

No, not if either of you is a nonresident alien. Nonresident aliens must calculate and pay estimated taxes separately, even if you plan to file a joint return under certain circumstances. This also applies if you're separated under a decree of divorce or separate maintenance, or if you and your spouse have different tax years. Each person must track their own payments using separate records.

What if my income changes significantly during the year?

You can and should amend your estimated tax calculations when your circumstances change substantially. Recalculate your expected annual tax using the worksheet, then adjust your remaining installment amounts accordingly. If you receive income unevenly throughout the year—perhaps operating a seasonal business or receiving a large capital gain late in the year—consider using the annualized income installment method explained in IRS Publication 505. This method can lower or eliminate required payments for certain periods based on when you actually received income, potentially reducing or eliminating penalties.

What payment method should I use?

The best method depends on your location and preferences. If you're outside the United States, electronic payment methods are most practical: IRS Direct Pay for free bank transfers, debit or credit cards through authorized providers (with small convenience fees), or the Electronic Federal Tax Payment System after enrollment. These methods provide immediate confirmation numbers and faster processing. If you're in the U.S. and prefer traditional methods, you can mail checks or money orders with payment vouchers, though this requires more time and you must ensure payments arrive by due dates. Cash payments are now available at participating retail stores but are limited to one thousand dollars per day per transaction.

What happens if I miss a payment or pay less than required?

Missing a payment or underpaying doesn't immediately trigger IRS contact—you won't receive a bill or notice during the year. However, when you file your annual Form 1040-NR, the IRS will calculate whether you owed penalties for underpayment. The penalty is calculated separately for each payment period based on the amount of underpayment and how many days it remained unpaid. You might owe penalties even if your tax return shows an overall overpayment, because penalties are assessed per quarter. To minimize penalties if you realize you've underpaid, make up the shortfall with your next installment and adjust remaining payments to catch up.

Do I need to file estimated taxes if I'm only in the United States temporarily?

Your need to file depends on your income and tax situation, not the length of your stay. If you're a nonresident alien with U.S. source income and you meet the two main tests—expecting to owe at least one thousand dollars after withholding, and having insufficient withholding to cover at least ninety percent of current year tax or one hundred percent of prior year tax—you must make estimated payments regardless of whether you're temporarily or permanently in the United States. The rules apply to the nature of your income and tax liability, not your physical presence.

How do I get credit for estimated tax payments when I file my annual return?

When completing your 2021 Form 1040-NR, you'll enter the total amount of all estimated tax payments made during the year on the designated payments line. The IRS will verify your payments against their records using your identifying number (SSN, ITIN, or EIN). This is why accurate record-keeping is crucial—maintain your Record of Estimated Tax Payments with dates, amounts, and confirmation numbers. If there's a discrepancy between what you claim and what the IRS has recorded, having detailed payment records will help resolve the issue. Any overpayment can be refunded to you or applied as a credit toward your next year's estimated tax IRS.gov.

This guide is based on official IRS information for tax year 2021. For the most current forms, instructions, and updates, visit IRS.gov/Form1040ESNR.

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