Form 1040-NR Tax Year 2019: Nonresident Alien Filing Guide
Understanding Form 1040-NR
Form 1040-NR is the U.S. income tax return for nonresident aliens who earned U.S.-source income during 2019. The form incorporates the qualified business income deduction under Section 199A, calculated on Form 8995 or Form 8995-A. Nonresident aliens generally cannot claim the standard deduction, except for students and business apprentices from India, under the U.S.-India Income Tax Treaty.
Determining Residency Status
Step 1: Apply the Substantial Presence Test
Calculate your presence in the United States using the substantial presence test. You meet this test if you are present at least 31 days during 2019 and 183 days over three years (2019, 2018, 2017), counting all 2019 days as full days, one-third of 2018 days, and one-sixth of 2017 days.
If you meet this test, you are generally a resident alien and must file Form 1040, not Form 1040-NR. If you do not meet the test, file Form 1040-NR as a nonresident alien.
Step 2: Identify Exempt Individuals
Certain days are excluded from the substantial presence test. Exempt individuals include students on F, J, M, or Q visas, teachers and trainees on J or Q visas, foreign government officials on A or G visas, and professional athletes competing in charitable events. File Form 8843 to document exempt status and excluded days.
Establishing Filing Requirements
Step 3: Determine Your Filing Obligation
You must file Form 1040-NR if you engaged in a U.S. trade or business during 2019, even without income from that business. You must also file if you received U.S.-source income without sufficient withholding, claimed treaty benefits, received HSA or MSA distributions, or had advance premium tax credit payments for Marketplace coverage.
Step 4: Collect Required Documents
Gather all Forms W-2 showing wages and federal withholding, Forms 1042-S for income paid to foreign persons, Forms 1099 for dividends, interest, and capital gains, scholarship statements, and Form 1095-A if you received premium tax credits.
Selecting Filing Status
Step 5: Choose Your Filing Status
Form 1040-NR offers five filing status options: single, married filing separately, married filing jointly (with one spouse a nonresident alien), qualifying surviving spouse, and head of household (only if allowed by treaty with Canada, Mexico, or South Korea). Most nonresident aliens choose to file their taxes as single or married filing separately. You cannot file jointly unless you make a special election to be treated as a U.S. resident for the entire year.
Reporting Income
Step 6: Report Effectively Connected Income on Lines 8-23
Enter wages on line 8 of Forms W-2 or 1042-S. Report interest on line 9a, dividends on lines 10a-10b, business income on line 13 with Schedule C, capital gains on line 14 with Schedule D, IRA distributions on line 15b, pensions on line 17b, rental income on line 18 with Schedule E, farm income on line 19 with Schedule F, unemployment on line 20, and other income on line 21.
Enter treaty-exempt income on line 22 of Schedule OI, Item L. Total all effectively connected income on line 23.
Step 7: Calculate Adjustments to Income on Lines 24-34
Claim only adjustments allocated adequately to effectively connected income. Enter deductible self-employment tax on line 27, retirement plan contributions on line 28, self-employed health insurance on line 29, IRA deductions on line 32, and student loan interest on line 33. Total adjustments on line 34 and subtract from line 23 to determine adjusted gross income on line 35.
Completing Required Schedules
Step 8: Complete Schedule OI (Other Information)
Answer all questions on Schedule OI. Enter countries of citizenship (Item A) and tax residence (Item B); report visa type, immigration status changes, and U.S. entry and exit dates. In Item L, report treaty benefits claimed, including country name, treaty article numbers, months claimed in prior years, and exempt income amount. Transfer exempt income to Form 1040-NR line 22.
Attach Form 8833 if you claim treaty benefits that require disclosure.
Step 9: Complete Schedule A for Itemized Deductions
Nonresident aliens cannot claim the standard deduction except for Indian students and business apprentices under treaty provisions. Use Schedule A (Form 1040-NR) to list all of your deductions. Enter state and local income taxes on lines 1a-1b, mortgage interest on lines 3a-3b, charitable contributions to U.S. organizations on line 5, and casualty losses from federally declared disasters on line 6. Total deductions on line 8 and carry to Form 1040-NR line 37.
Calculating Tax
Step 10: Determine Taxable Income on Lines 37-41
Enter itemized deductions on line 37 if you have qualified business income, and complete Form 8995 (if taxable income before QBI deduction is $160,700 or less for single/head of household/qualifying surviving spouse, or $160,725 for married filing separately) or Form 8995-A (if income exceeds thresholds or you have a specified service trade or business). Enter the QBI deduction on line 38. For estates and trusts only, enter the exemption on line 39. Add lines 37-39 on line 40. Subtract line 40 from line 35 for taxable income on line 41.
Step 11: Calculate Tax and Apply Credits
Use tax tables or worksheets to calculate tax on line 41. Enter tax on line 42. Add alternative minimum tax from Form 6251 on line 43 if applicable. Total tax before credits, then apply allowable credits on lines 46-53. Foreign tax credit (line 46) requires Form 1116. The child tax credit (line 49) is available only to residents of Canada or Mexico with qualifying dependents. Most other credits have limited availability for nonresident aliens.
Step 12: Complete Schedule NEC for Non-Effectively Connected Income
If you received income not effectively connected with U.S. trade or business (FDAP income), complete Schedule NEC. Enter dividends, interest, royalties, pensions, annuities, and rents in columns for appropriate rates: 10% (column a), 15% (column b), 30% (column c), or treaty-reduced rates (column d). Multiply each column by its rate and total on line 15. Carry to Form 1040-NR line 54. Attach Forms 1042-S and 1099.
Reporting Payments
Step 13: Report Tax Withheld and Payments on Lines 62-71
Enter federal income tax withheld from Forms W-2 on line 62a, from Forms 1099 on line 62b, and from Forms 1042-S on line 62d. Report excess Social Security and Medicare tax on line 67 and estimated tax payments on line 70. Total all payments on line 71. Nonresident aliens generally cannot claim the earned income credit or most refundable credits.
Filing Your Return
Step 14: Assemble and File by Deadline
Assemble your return: Form 1040-NR pages 1-2, Schedule A, Schedule NEC, Schedule OI, Forms 8995/8995-A, Form 8833, and all W-2s, 1042-Ss, and 1099s. Sign and date the return. Enter your occupation and Identity Protection PIN if applicable.
The due date is April 15, 2020. If you had no wages subject to U.S. withholding AND filed from outside the United States, you have an automatic extension until June 15, 2020—otherwise, file Form 4868 by April 15 to request a six-month extension.
Mail returns without payment to the Internal Revenue Service, Austin, TX, 73301-0215, USA. Mail returns with payment to the Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303, USA. Consult the instructions for specific circumstances.
Understanding the QBI Deduction
Step 15: Calculate Qualified Business Income Deduction
The QBI deduction allows eligible nonresident aliens to deduct up to 20% of qualified business income from pass-through entities. Use Form 8995 if taxable income before QBI deduction is at or below $160,700 ($160,725 married filing separately). Use Form 8995-A if income exceeds these thresholds or if you have specified service trade or business income. The simplified form has no wage or property limitations; the complex form applies these restrictions.
Key Filing Restrictions
Step 16: Understand Nonresident Alien Limitations
Nonresident aliens cannot claim the standard deduction except for Indian students and business apprentices under treaty provisions. You cannot file jointly unless you make a special election for resident treatment. You cannot use head of household status unless allowed by a treaty with Canada, Mexico, or South Korea. You cannot claim earned income credit or child and dependent care credit, except Canada/Mexico residents of Canada or Mexico with qualifying dependents. Deductions must be allocated to effectively connected income only.
Reconciling Premium Tax Credits
Step 17: Complete Form 8962 If Applicable
If advance premium tax credit payments were made for Marketplace coverage, complete Form 8962 to reconcile payments with your allowable credit based on actual income. Attach Form 8962 to Form 1040-NR. Repay excess payments (subject to limitations) or claim net premium tax credit on line 65 if your allowable credit exceeds advance payments.
By following these steps and providing complete documentation, you ensure accurate Form 1040-NR completion and compliance with nonresident alien filing requirements for tax year 2019.
Need Help With Your Tax Filing?
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
We offer:
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Call now before filing: (888) 260-9441
Fast transcript pull available
This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
