Form 1040-ES(NR): U.S. Estimated Tax for Nonresident Alien Individuals (2023)
What Form 1040-ES(NR) Is For
Form 1040-ES(NR) is the payment voucher package that nonresident aliens use to calculate and pay estimated taxes throughout the year. Unlike regular employees who have taxes automatically withheld from their paychecks, many nonresident aliens earn income that isn't subject to withholding—such as self-employment income, rental income, interest, dividends, or business profits. This form helps you figure out how much tax you need to pay in advance and provides payment vouchers to submit with your quarterly payments.
The form itself isn't technically filed with your annual tax return. Instead, it's a worksheet and payment system you use during the year to stay current on your tax obligations. When you complete Form 1040-ES(NR), you're calculating your expected tax liability for the year and dividing it into quarterly installments. The IRS designed this system to collect taxes gradually rather than in one lump sum at year-end, which helps both taxpayers manage cash flow and the government maintain steady revenue.
When You’d Use Form 1040-ES(NR)
You must use Form 1040-ES(NR) if you're a nonresident alien and expect to owe at least $1,000 in tax after subtracting your withholding and refundable credits, and your withholding and credits will be less than the smaller of either 90% of your current year's tax or 100% of last year's tax (110% if your 2022 adjusted gross income exceeded $150,000). There's an important exception: you don't need to pay estimated tax if you had zero tax liability for the full 12-month 2022 tax year, or if you were a U.S. citizen or resident alien for all of 2022 with no tax liability.
If you need to amend your estimated tax payments after submitting earlier installments, you'll recalculate your total estimated tax using the worksheet and adjust your remaining payments accordingly. Perhaps you received an unexpected contract, sold property, or your income changed substantially—these situations require recalculation. The form instructs you to refigure your amended estimated tax and spread the adjusted amount across remaining payment periods. If you discover you've underpaid earlier installments, you may face penalties even after making corrections, so it's important to catch changes early. You cannot file joint estimated tax payments if you or your spouse is a nonresident alien unless you've elected to be treated as a U.S. resident for tax purposes.
Key Rules or Details for 2023
The estimated tax system operates on specific rules that nonresident aliens must follow. First, understand that estimated tax covers income ""effectively connected"" with a U.S. trade or business—this typically includes wages, self-employment income, and business profits. Income not effectively connected (like certain investment income) is generally taxed at a flat 30% rate through withholding rather than estimated tax, though tax treaties may reduce this rate.
The safe harbor rules protect you from penalties: you won't face penalties if you pay at least 90% of your current year's tax or 100% of last year's tax (whichever is smaller). Higher-income taxpayers with adjusted gross income above $150,000 must pay 110% of their prior year's tax to use the safe harbor. Special rules apply to farmers and fishermen, who only need to pay 66⅔% of their current year's tax and have different payment deadlines.
For 2023, the maximum earnings subject to Social Security tax is $160,200, which matters if you're self-employed and calculating self-employment tax. When estimating self-employment tax, you must use 92.35% of your net profit, then calculate both the 12.4% Social Security portion (on income up to the cap) and the 2.9% Medicare portion. You can also deduct half of your self-employment tax when calculating your adjusted gross income.
Dual-status aliens—those who are both nonresident and resident alien during the same tax year—face special considerations. If you're married to a U.S. citizen or resident, you may elect to be treated as a resident for the entire year and file jointly, which changes which forms you use. The form includes detailed tax rate schedules for single filers, qualifying surviving spouses, married filing separately, and estates/trusts.
Step-by-Step (High Level)
Step 1: Gather Prior-Year and Current-Year Information
Begin by gathering your 2022 tax return and instructions as a reference point, along with your records of expected 2023 income and deductions. The package includes a comprehensive worksheet where you'll estimate your 2023 adjusted gross income, including all income effectively connected with a U.S. trade or business. Subtract your estimated itemized deductions (or standard deduction if you qualify—though most nonresident aliens cannot claim it) and any qualified business income deduction under section 199A.
Step 2: Estimate Your 2023 Tax
Calculate your expected tax using the tax rate schedules provided in the package, which differ based on your filing status. If you'll have qualified dividends or capital gains, you'll need to reference Worksheet 2-5 in IRS Publication 505 for special calculations. Add any alternative minimum tax from Form 6251 and other taxes like self-employment tax. Then subtract any credits you expect to claim, such as the child tax credit or foreign tax credit.
Step 3: Apply Safe Harbor and Withholding Benchmarks
The worksheet then compares your total estimated tax to two benchmarks: 90% of your current year's expected tax and 100% (or 110% for high earners) of your prior year's tax. You'll subtract any withholding you expect during the year. If the result shows you need to make estimated payments, divide this amount by four for equal quarterly payments, or use the alternative payment schedule if you don't have wages subject to withholding.
Step 4: Complete Payment Vouchers
Complete the payment vouchers with your name, address, Social Security Number or Individual Taxpayer Identification Number, and the payment amount for each quarter. Make checks payable to ""United States Treasury"" and write ""2023 Form 1040-ES (NR)"" plus your identifying number on the check.
Common Mistakes and How to Avoid Them
One frequent error is confusing the form numbers—nonresident aliens must use Form 1040-ES(NR), not the regular Form 1040-ES used by citizens and residents. Using the wrong form can lead to processing delays and confusion. Another common mistake is failing to include all types of income effectively connected with a U.S. trade or business. If you operate a business, receive rental income from U.S. property, or have self-employment income, all of these must be included in your estimate.
Many nonresident aliens incorrectly calculate self-employment tax by forgetting to multiply net profit by 92.35% before applying the tax rates. This seemingly small detail significantly affects your calculation and can lead to underpayment penalties. Similarly, forgetting to deduct half of your self-employment tax when calculating adjusted gross income results in overpaying.
Timing mistakes are particularly costly. Payment vouchers are pre-dated for specific quarters: April 18, June 15, September 15, and January 16 (of the following year). Missing these deadlines triggers penalties calculated daily from the due date. Some taxpayers incorrectly believe the IRS will send reminders—it won't. You're responsible for tracking and making payments on time.
If your income arrives unevenly throughout the year—perhaps from seasonal business or a large late-year capital gain—making equal quarterly payments may trigger unnecessary penalties. The annualized income installment method allows you to adjust payments based on when income actually arrives, but you must file Form 2210 with Schedule AI with your return to use this method.
Finally, don't staple or attach your payment to the voucher, and ensure you're mailing to the correct address: Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303. Only the U.S. Postal Service can deliver to P.O. boxes, so private carriers won't work for mailed payments.
What Happens After You File
After you mail your estimated tax payments with vouchers, or pay electronically, the IRS credits your tax account for the year. You won't receive confirmation for mailed payments unless you use certified mail with return receipt. Electronic payments through IRS Direct Pay, EFTPS, or debit/credit card providers generate immediate confirmation numbers you should save.
The Record of Estimated Tax Payments table in the form package is essential for tracking what you've paid. Record each payment's date, amount, check number or confirmation number, and any overpayment credits you're applying from the prior year. You'll need these figures when preparing your 2023 Form 1040-NR annual return.
When you file your annual Form 1040-NR for 2023 (typically due by April 15, 2024, with possible extensions), you'll report your total estimated tax payments. The IRS compares these payments plus any withholding against your actual tax liability. If you overpaid, you'll receive a refund or can apply the overpayment to your 2024 estimated tax. If you underpaid, you'll owe the balance plus potential penalties.
The IRS calculates underpayment penalties based on how much you underpaid and for how long. Penalties apply separately to each quarter's underpayment and accrue daily until paid. The penalty may be waived if you had reasonable cause (such as casualty, disaster, or unusual circumstances), if you retired after age 62 or became disabled during the tax year and the underpayment was due to reasonable cause, or if the underpayment was due to a casualty, disaster, or other unusual circumstance where imposing the penalty would be inequitable.
FAQs
Can I increase my withholding instead of making estimated tax payments?
Yes, if you receive wages, you can file a new Form W-4 with your employer requesting additional withholding. This strategy is often simpler than making quarterly estimated payments because your employer handles the withholding automatically. The Tax Withholding Estimator at IRS.gov/W4App helps you determine the right withholding amount. However, this only works if you have wages—self-employment and other income not subject to withholding still requires estimated tax payments.
What payment methods are available besides mailing checks?
The IRS offers several electronic payment options that are faster and more secure than mail. IRS Direct Pay allows free online transfers from your checking or savings account. You can pay through Your Online Account at IRS.gov/Account, which also lets you view payment history. The Electronic Federal Tax Payment System (EFTPS) is a free Treasury system for online and phone payments—enrollment required. You can also pay by debit or credit card through approved service providers (convenience fees apply), use the IRS2Go mobile app, or even pay cash at retail partners (maximum $1,000 per day). Electronic Fund Withdrawal is available when e-filing your return.
What if I don't have a Social Security Number?
If you're not eligible for a Social Security Number, you must obtain an Individual Taxpayer Identification Number (ITIN) from the IRS. Apply using Form W-7, Application for IRS Individual Taxpayer Identification Number. You'll enter your ITIN wherever the form requests an SSN. If your ITIN was issued before January 1, 2013, or hasn't been used on a tax return in the last three consecutive years, you may need to renew it. For estates or trusts, use the Employer Identification Number (EIN) instead.
Do different rules apply if I'm married to a U.S. citizen?
Yes, you have options. If you're married to a U.S. citizen or resident alien at the end of the tax year, you can elect to be treated as a U.S. resident for tax purposes and file jointly on Form 1040 instead of Form 1040-NR. This election changes which estimated tax form you use—you'd use Form 1040-ES instead of Form 1040-ES(NR). This choice has significant tax implications, so review Publication 519, U.S. Tax Guide for Aliens, chapter 1 before deciding. Once you make this election, it applies to all future years unless revoked.
How do farmers and fishermen differ from other nonresident aliens for estimated tax?
If at least two-thirds of your gross income for 2022 or 2023 comes from farming or fishing, you have flexible payment options: pay all estimated tax by January 16, 2024, or file your 2023 Form 1040-NR by March 1, 2024, and pay your total tax then. You're also protected from penalties if you pay at least 66⅔% (instead of 90%) of your current year's tax. These special rules recognize the seasonal and unpredictable nature of agricultural income.
What if my income changes dramatically during the year?
You can amend your estimated tax at any time by recalculating the worksheet and adjusting your remaining payments. If you need to increase payments due to higher income, calculate your new total estimated tax and redistribute it across remaining payment periods. The annualized income installment method, explained in Publication 505, chapter 2, allows you to match payments to when you actually receive income throughout the year—particularly helpful if your income is seasonal or arrives in large lump sums. This method requires filing Form 2210 with Schedule AI with your annual return.
Will I owe penalties even if I get a refund when I file my return?
Yes, penalties can apply even if your total payments exceed your final tax liability. The penalty system looks at whether you paid enough by each quarterly deadline, not just your year-end total. If you underpaid in early quarters but overpaid later, you might owe penalties on those early underpayments despite receiving a refund overall. This surprises many taxpayers, but it's designed to encourage timely payment throughout the year rather than back-loading payments.
This guide is based on the 2023 Form 1040-ES(NR) and instructions available at IRS.gov. For the most current information and any updates enacted after publication, visit IRS.gov/Form1040ESNR.
