Form 1040-NR: U.S. Nonresident Alien Income Tax Return (2011)
What Form 1040-NR Is For
Form 1040-NR is the U.S. income tax return specifically designed for nonresident aliens—individuals who are not U.S. citizens and do not meet the requirements to be treated as resident aliens for tax purposes. This form allows nonresident aliens to report their U.S.-source income and income effectively connected with a U.S. trade or business to the Internal Revenue Service.
Unlike U.S. citizens and resident aliens who must report their worldwide income, nonresident aliens are generally taxed only on two categories of income: income effectively connected with a U.S. trade or business (such as wages from U.S. employment), and certain U.S.-source income that is not effectively connected with a U.S. business (such as investment income from U.S. stocks or real estate). The form captures both types of income and applies different tax treatments to each.
Form 1040-NR serves multiple purposes beyond simply reporting income. It allows nonresident aliens to claim refunds of taxes that were overwithheld from their paychecks or other payments, to claim treaty benefits that may reduce or eliminate taxes under agreements between the United States and their home country, and to take advantage of certain deductions and credits. Even if you had no U.S. income or your income is tax-exempt, you may still need to file Form 1040-NR if you were engaged in a U.S. trade or business during the year.
A simpler version, Form 1040-NR-EZ, exists for nonresident aliens with straightforward tax situations—those with only wages, salaries, tips, and scholarships, who claim no dependents, have income under $100,000, and meet several other conditions. However, most nonresident aliens with any complexity in their financial situations must use the full Form 1040-NR.
When You’d Use Form 1040-NR (Late/Amended Filing)
The deadline for filing Form 1040-NR depends on your employment situation. If you were an employee who received wages subject to U.S. income tax withholding during 2011, your return was due by April 17, 2012 (the 15th day of the 4th month after the tax year ended—normally April 15, but shifted to April 17 because April 15 fell on a Sunday and April 16 was the Emancipation Day holiday in the District of Columbia). If you did not receive wages subject to withholding, your deadline was June 15, 2012 (the 15th day of the 6th month after the tax year).
If you cannot file by the deadline, you can request an automatic six-month extension using Form 4868, which must be filed by your original due date. This extension gives you additional time to file your return but does not extend the deadline for paying any tax you owe—you'll still owe interest on unpaid taxes from the original due date. For taxpayers whose main place of business and home are outside the United States and Puerto Rico, an automatic extension to June 15 applies, and you can further request a discretionary two-month extension to December 15 by writing to the IRS with an explanation of why you need the additional time.
Late filing carries significant consequences. If you file after the deadline without a valid extension, the IRS imposes a failure-to-file penalty of 5% of the unpaid tax for each month or partial month that your return is late, up to a maximum of 25%. If your return is more than 60 days late, the minimum penalty is $135 or 100% of the tax due, whichever is less. Additionally, the IRS charges interest on unpaid taxes from the original due date, regardless of any extension you may have received. If you have a reasonable explanation for filing late—such as a natural disaster, serious illness, or death in your immediate family—you may be able to have penalties waived.
Amended returns are filed using Form 1040X, Change Your Return, which you attach to the corrected Form 1040-NR. You must file an amended return within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later. Common reasons for amending include discovering you reported the wrong income amount, failed to claim deductions or credits you were entitled to, made mathematical errors, or should have filed a different form (for example, if you filed Form 1040 but should have filed Form 1040-NR, or vice versa). The amended return process can take the IRS several months to process, so patience is important.
Key Rules or Details for 2011
Understanding your status and eligibility is critical to filing Form 1040-NR correctly. Several fundamental rules govern who must file Form 1040-NR and how to properly complete it.
Determining Nonresident Alien Status
Several fundamental rules govern who must file Form 1040-NR and how to properly complete it. Understanding your status as a nonresident alien is the critical first step. You are considered a nonresident alien if you do not meet either the "green card test" (lawful permanent resident status) or the "substantial presence test" (physically present in the United States for at least 31 days during 2011 and 183 days over a three-year period using a weighted formula). Some individuals may also qualify as nonresident aliens under tax treaty provisions even if they meet one of these tests.
Filing Requirements
Filing requirements mandate that you file Form 1040-NR if you were engaged or considered to be engaged in a U.S. trade or business at any time during 2011, even if you had no U.S. income, no income from that trade or business, or your income was tax-exempt. You must also file if you were not engaged in a trade or business but had U.S.-source income on which tax was not fully withheld at the source. The only exceptions apply to individuals whose sole U.S. trade or business was performing personal services with wages under $3,700 (and no other reason to file), and certain students, teachers, or trainees temporarily in the United States on F, J, M, or Q visas with no taxable income.
Identification Numbers
Identification numbers are required for all filers. You must provide either a Social Security Number (SSN) if you're eligible to receive one, or an Individual Taxpayer Identification Number (ITIN) obtained by filing Form W-7 with the IRS. Your identification number must appear on your return, and you must provide accurate identification information for any dependents you claim.
Income Reporting
Income reporting on Form 1040-NR is divided into two sections. Page 1 reports income effectively connected with a U.S. trade or business, which is taxed at graduated rates just like a U.S. citizen's income. This includes wages, business income, capital gains from U.S. real property, and other connected income. Schedule NEC (Tax on Income Not Effectively Connected) on page 4 reports U.S.-source income not effectively connected with a trade or business, such as dividends, interest, royalties, and pensions, which is generally taxed at a flat 30% rate (or lower treaty rate if applicable).
Deductions and Exemptions
Deductions and exemptions for nonresident aliens are more limited than those available to U.S. citizens and residents. You cannot claim the standard deduction—only itemized deductions are available, and only for income effectively connected with a U.S. trade or business. You can generally claim only one personal exemption ($3,700 for 2011) for yourself, though residents of Canada, Mexico, and South Korea, U.S. nationals, and students or business apprentices from India may claim exemptions for spouses and dependents under certain conditions.
Tax Treaties
Tax treaties may significantly reduce or eliminate your U.S. tax obligation. If your country has an income tax treaty with the United States and you qualify for treaty benefits, you may be entitled to exemptions, reduced withholding rates, or other favorable treatment. To claim treaty benefits, you must generally complete Schedule OI on page 5 of Form 1040-NR, report the treaty country, applicable treaty article, amount of exempt income, and may need to attach Form 8833 for certain treaty positions.
Step-by-Step (High Level)
Completing Form 1040-NR requires careful attention to detail and proper organization of your documents. Here's how to approach the process systematically:
Step 1: Gather Your Documents
Step 1: Gather your documents. Collect all Forms W-2 (wages), Forms 1042-S (income subject to withholding), Forms 1099 (various types of income), Forms K-1 (partnership or S-corporation income), receipts for deductible expenses, and records of estimated tax payments. If claiming treaty benefits, gather documentation supporting your eligibility, including proof of foreign residency and tax home.
Step 2: Determine Your Filing Status
Step 2: Determine your filing status. Select the appropriate filing status box at the top of page 1. Most nonresident aliens check box 2 (other single nonresident alien) or box 5 (other married nonresident alien). Special status categories exist for residents of Canada, Mexico, and South Korea, and for U.S. nationals.
Step 3: Complete Personal Information
Step 3: Complete personal information. Enter your name, current address, and identifying number (SSN or ITIN) accurately. If filing for an estate or trust, check the appropriate box. Complete the exemptions section, listing yourself and any qualifying dependents with their identification numbers.
Step 4: Report Effectively Connected Income
Step 4: Report effectively connected income (page 1, lines 8-23). Enter wages from Form W-2, interest and dividends from U.S. sources that are effectively connected with your trade or business, business income from Schedule C, capital gains from Schedule D if required, IRA and pension distributions, rental income from Schedule E, and any other effectively connected income. Subtract any treaty-exempt income on line 22 and calculate your total effectively connected income on line 23.
Step 5: Calculate Adjusted Gross Income
Step 5: Calculate adjusted gross income (lines 24-36). Subtract allowable adjustments to income such as educator expenses, moving expenses, self-employment tax deduction, self-employed health insurance, IRA deduction, and student loan interest. The result is your adjusted gross income on line 36.
Step 6: Complete Schedule A for Itemized Deductions
Step 6: Complete Schedule A if claiming itemized deductions. On page 3, itemize your deductions for state and local income taxes, charitable contributions to U.S. charities, casualty and theft losses, job expenses, tax preparation fees, and other miscellaneous deductions. Remember that only deductions related to effectively connected income are allowed.
Step 7: Calculate Taxable Income and Tax
Step 7: Calculate taxable income and tax (page 2, lines 37-44). Enter your adjusted gross income, subtract itemized deductions and exemptions, and calculate your taxable income. Figure your tax using the appropriate tax rate schedules or Tax Computation Worksheet, and add alternative minimum tax if applicable.
Step 8: Complete Schedule NEC
Step 8: Complete Schedule NEC for non-effectively connected income (page 4). Report U.S.-source dividends, interest, royalties, pensions, and other income not effectively connected with a trade or business. Enter amounts in the appropriate column based on the applicable tax rate (10%, 15%, 30%, or other treaty rate). Calculate the total tax on this income and enter it on line 53 of page 2.
Step 9: Calculate Credits and Other Taxes
Step 9: Calculate credits and other taxes (lines 45-59). Claim any credits you're entitled to such as foreign tax credit, child and dependent care credit, or child tax credit. Add any additional taxes owed such as self-employment tax or household employment taxes.
Step 10: Report Payments and Determine Refund or Amount Owed
Step 10: Report payments and calculate refund or amount owed (lines 61-74). Enter federal income tax withheld from Forms W-2, Forms 1099, Forms 1042-S, and Forms 8288-A. Include estimated tax payments and any other payments made. Compare your total payments to your total tax to determine if you're owed a refund or owe additional tax.
Step 11: Complete Schedule OI
Step 11: Complete Schedule OI (page 5). Answer all questions about your citizenship, residency, visa status, days present in the United States, and treaty benefits claimed. This information is required for all filers.
Step 12: Sign, Date, and Attach Required Documents
Step 12: Sign, date, and attach required documents. Sign and date your return, enter your U.S. occupation, attach all Forms W-2, Forms 1042-S, and other withholding statements to the left margin of page 1, and include all required schedules and forms in the proper order. Mail to: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215, U.S.A.
Common Mistakes and How to Avoid Them
Many nonresident aliens make preventable errors that delay refunds or trigger IRS notices. Understanding these pitfalls helps ensure smooth processing.
Incorrect or Missing Identification Numbers
Incorrect or missing identification numbers top the list of common errors. Always double-check that your SSN or ITIN is correct and clearly written. If claiming dependents, verify that each dependent's name exactly matches their Social Security card or ITIN assignment letter, and that their identification number is accurate. Mismatched names and numbers are a leading cause of rejected returns and delayed refunds.
Mathematical Errors
Mathematical errors frequently appear in calculations for total income, itemized deductions, taxable income, and tax computation. Use a calculator and verify your arithmetic multiple times, especially for complex calculations like the child tax credit or alternative minimum tax. The IRS will correct obvious math errors, but this slows processing and may result in a different refund amount than you expected.
Using the Wrong Tax Table or Method
Using the wrong tax table or method leads to incorrect tax amounts. Nonresident aliens must use the correct column in the tax tables based on their filing status—typically "Married filing separately" for married individuals or "Single" for those who qualify. Never use the "Head of household" column, as nonresident aliens generally cannot claim this status. If your taxable income exceeds the tax table limits, use the Tax Computation Worksheet with the appropriate section.
Failing to Attach Required Forms
Failing to attach required forms causes processing delays. Forms W-2 and Forms 1042-S must be physically attached to the left margin of page 1 of your return. Include all required schedules (A, C, D, E, SE) and additional forms referenced in your return. Arrange them in order: Form 1040-NR, Schedule A, other schedules, then additional forms.
Filing Multiple Original Returns
Filing multiple original returns for the same year confuses IRS systems and delays processing. If you already filed and realize you made an error, do not file a second original return—file an amended return using Form 1040X instead. The IRS can take months to sort out duplicate returns.
Incorrectly Claiming Treaty Benefits
Incorrectly claiming treaty benefits without proper documentation invites IRS scrutiny. If claiming that income is exempt or subject to a reduced tax rate under a treaty, complete Schedule OI item L fully, including the country, treaty article, prior years the benefit was claimed, and amount of exempt income. Attach Form 8833 if required (generally when exempt income exceeds certain thresholds). Keep documentation proving you're a resident of the treaty country for your records.
Forgetting to Sign and Date the Return
Forgetting to sign and date the return makes it invalid. Both the taxpayer signature and date are required. If filing for an estate or trust, the fiduciary must sign. Also remember to enter your occupation in the United States in the designated space.
Incomplete Schedule OI
Incomplete Schedule OI causes processing problems. Answer every question on page 5, including your citizenship, visa type, dates of entry and departure from the United States, and whether you filed returns in previous years. Incomplete information may trigger requests for clarification.
Claiming Deductions You’re Not Entitled To
Claiming deductions you're not entitled to risks penalties. Remember that nonresident aliens cannot claim the standard deduction and can only claim itemized deductions related to effectively connected income. Residents of India who were students or business apprentices have special rules. Don't claim deductions for foreign income taxes on income that wasn't effectively connected with a U.S. trade or business.
Incorrect Address Information
Incorrect address information causes refund checks to go astray. Ensure your current mailing address is accurate and complete, including apartment numbers. If you've moved since filing, notify the IRS using Form 8822, Change of Address.
What Happens After You File
Once you mail your Form 1040-NR, the IRS processes it through several stages. Understanding this process helps set realistic expectations.
Initial Processing
Initial processing typically takes 6 to 8 weeks for paper returns (longer during peak filing season from February through April). The IRS enters your return information into their computer systems, checks for mathematical errors, and verifies that all required schedules and forms are attached. If claiming a refund involving Forms 1042-S or Form 8805 (withholding by partnerships), processing may take up to 6 months due to additional verification requirements.
Refund Issuance
Refund issuance follows successful processing. You can check your refund status online at IRS.gov using the "Where's My Refund?" tool approximately 3 to 4 weeks after mailing a paper return (14 weeks if you filed Form 8839 for adoption credit). The tool shows three stages: return received, refund approved, and refund sent. Refunds can be direct-deposited into your U.S. bank account (or split among multiple accounts using Form 8888) or mailed as a paper check. If you requested your refund check be mailed to an address different from the one shown on page 1, it will go to that address.
IRS Inquiries or Corrections
IRS inquiries or corrections may occur if the IRS finds errors or needs additional information. You might receive a notice requesting missing documentation (such as Forms W-2 not attached), questioning claimed treaty benefits, correcting mathematical errors, or explaining adjustments made to your return. Always respond promptly to IRS notices by the deadline given, which is typically 30 days. Keep copies of all correspondence and send responses via certified mail with return receipt requested to prove timely delivery.
Audit Selection
Audit selection is a possibility for any return, though most are not audited. The IRS may select returns for examination based on computer scoring, random sampling, or if your return shows unusual items. Nonresident alien returns claiming large treaty exemptions or unusual deductions face somewhat higher audit risk. If selected for audit, you'll receive written notification explaining what information is needed. Respond completely and honestly, and consider consulting a tax professional experienced with nonresident alien issues if the audit is complex.
Balance Due Collection
Balance due collection proceeds if you owe tax. You'll receive a notice stating the amount due, interest charges, and any penalties. Pay as quickly as possible to minimize interest accumulation. If you cannot pay the full amount, the IRS offers payment plans—contact them immediately to discuss options rather than ignoring the notice. Failure to pay can result in tax liens, levies on bank accounts or wages, or passport restrictions.
Your Rights as a Taxpayer
Rights as a taxpayer protect you throughout the process. You have the right to professional and courteous treatment by IRS employees, privacy and confidentiality, understanding why the IRS is asking for information and how they will use it, representation by yourself or an authorized representative, and to appeal IRS decisions. If you disagree with an IRS determination, you can file an appeal. Publication 1 (Your Rights as a Taxpayer) explains these rights in detail.
Recordkeeping and Retention
Keeping records remains important even after filing. Retain copies of your tax return, all supporting documents (W-2s, 1042-S forms, receipts), and IRS correspondence for at least three years from the return's due date or filing date, whichever is later. In some situations—such as if you underreported income by more than 25%, filed a claim for refund, or claimed a loss from worthless securities—you should keep records for six or seven years. These records are crucial if the IRS questions your return or if you need to file an amended return.
FAQs
What’s the difference between Form 1040-NR and Form 1040?
Form 1040-NR is specifically for nonresident aliens, while Form 1040 is for U.S. citizens and resident aliens. The key differences reflect that nonresident aliens are only taxed on U.S.-source income and income effectively connected with a U.S. trade or business, not worldwide income. Form 1040-NR includes Schedule NEC to report income not effectively connected with a trade or business (taxed at flat rates), does not allow the standard deduction, restricts certain credits, limits personal exemptions more strictly, and has different filing status options. The income, deductions, and tax calculations are structured differently to accommodate the unique tax treatment of nonresident aliens.
I’m an international student—do I have to file Form 1040-NR?
It depends on whether you had U.S.-source income that is taxable. If you were temporarily present in the United States on an F, J, M, or Q visa as a student and had no income subject to U.S. tax (no wages, scholarship income in excess of tuition and fees, dividend income, etc.), you do not need to file Form 1040-NR. However, you should file Form 8843 to document your days of presence as an exempt individual. If you did have taxable income—even small amounts—you generally must file Form 1040-NR or Form 1040-NR-EZ. Many students who receive scholarship income that exceeds qualified education expenses must file. Additionally, if taxes were withheld from any payments you received, you should file to claim a refund if you're entitled to one or to apply for treaty benefits.
Can I claim my spouse and children as dependents?
Generally, nonresident aliens can claim only one personal exemption for themselves and cannot claim exemptions for a spouse or dependents. However, important exceptions exist. If you are a resident of Canada, Mexico, or South Korea, or a U.S. national, you can claim exemptions for your spouse and qualifying dependents under the same rules that apply to U.S. citizens and residents. Students and business apprentices from India can also claim these exemptions. To qualify, your spouse cannot be claimed as a dependent by another taxpayer, must have no gross income, and generally must be a citizen or resident of the United States, Canada, or Mexico. Dependents must meet relationship, age, residency, and support tests, and you must provide their Social Security Numbers or ITINs.
My country has a tax treaty with the United States—how do I claim benefits?
To claim tax treaty benefits, complete Schedule OI (page 5 of Form 1040-NR), item L. Enter the treaty country, the specific treaty article you're relying on, the number of months in prior years you claimed the benefit, and the amount of exempt income in the current year. Include the exempt income on line 22 of page 1. For income not effectively connected with a trade or business reported on Schedule NEC, use column (d) to indicate a reduced treaty rate and specify the rate. You may also need to file Form 8833 if you're claiming treaty benefits for certain types of income or in certain circumstances, particularly if the exempt income or treaty position exceeds specified thresholds. Always maintain documentation proving you're a resident of the treaty country (typically a certificate of tax residency issued by that country's tax authority) and that you meet all treaty requirements.
I received wages subject to Social Security and Medicare tax withholding, but I’m on an F-1 visa as a student—what should I do?
Students on F-1 visas (and certain other nonimmigrant visas) are generally exempt from Social Security and Medicare taxes on wages paid for services performed to carry out the purposes for which they were admitted to the United States. If these taxes were withheld from your wages in error, you should first contact your employer to request a refund. If your employer cannot or will not refund the erroneously withheld taxes, you can file Form 843 (Claim for Refund and Request for Abatement) with the IRS, along with documentation showing your visa status, that your employment qualified for the exemption, and the amount of taxes erroneously withheld. Attach copies of your Forms W-2, visa, I-20 (for F-1 students), I-94, and passport biographical page. This is a separate process from filing Form 1040-NR for income tax purposes.
What happens if I left the United States during the year and didn’t get a sailing permit?
A sailing or departure permit (obtained by filing Form 1040-C or Form 2063) is required for most aliens before departing the United States. The permit certifies that you've met your U.S. tax obligations. If you left without obtaining the required permit, you should file a departing alien income tax return (Form 1040-C) as soon as possible, even though you've already left. Failure to obtain a sailing permit when required can cause problems if you want to return to the United States, as immigration officials may question why you don't have proof of tax compliance. Additionally, you must still file Form 1040-NR for the tax year by the regular deadline to report all your income for the year and calculate your final tax liability. Form 1040-C is essentially a preliminary estimate of your tax, while Form 1040-NR is the comprehensive annual return.
I made a mistake on my filed return—how do I correct it?
File Form 1040-X (Amended U.S. Individual Income Tax Return) to correct errors on a previously filed Form 1040-NR. Attach the corrected Form 1040-NR to Form 1040-X showing the changes, along with any additional schedules or forms affected by the corrections. In Part I of Form 1040-X, show the original amounts, the net change (increase or decrease), and the correct amounts. In Part III, explain in detail what you're changing and why. You must file Form 1040-X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later. Mail the amended return to the same IRS address you used for the original return. Allow several months for processing—amended returns take longer than original returns. You can check the status of your amended return using the "Where's My Amended Return?" tool on IRS.gov approximately three weeks after mailing.
All information in this guide is sourced from official IRS publications and instructions for the 2011 tax year, including Form 1040-NR instructions, Publication 519 (U.S. Tax Guide for Aliens), and the 2011 Form 1040-NR.
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