Form 1040-NR: U.S. Nonresident Alien Income Tax Return (2018)
What Form 1040-NR Is For
Form 1040-NR is the tax return used by nonresident aliens—foreign nationals who don't meet the tests to be considered U.S. residents for tax purposes—to report their U.S. income and calculate their tax liability. Think of it as the international cousin of the standard Form 1040 used by U.S. citizens and residents, but with rules tailored to people who live abroad and have only limited connections to the United States.
The form addresses two main categories of income that nonresident aliens might receive from U.S. sources. First, there's ""effectively connected income"" (ECI), which typically comes from running a business or working in the United States. This income appears on page one of the form and is taxed at the same graduated rates that apply to U.S. citizens—meaning the more you earn, the higher your tax bracket. Second, there's ""fixed, determinable, annual, or periodical"" (FDAP) income, which includes passive income like dividends, interest, royalties, and pensions. This type appears on Schedule NEC and is generally taxed at a flat 30 percent rate (or lower if a tax treaty applies), with no deductions allowed.
If you're a nonresident alien who engaged in any U.S. trade or business during 2018, you must file Form 1040-NR—even if you had no income, no U.S. source income, or your income is exempt under a tax treaty. You also must file if you received U.S. source income that wasn't fully withheld at source, owe special taxes (like alternative minimum tax or self-employment tax), received certain retirement distributions, or had advance premium tax credit payments made through the Health Insurance Marketplace.
The form helps the IRS ensure that nonresident aliens pay the correct amount of tax on their U.S. income while also allowing them to claim refunds if too much was withheld, take advantage of applicable tax treaties, and claim credits like the child tax credit if they meet specific requirements. IRS.gov
When You'd Use Form 1040-NR (Filing Deadlines, Late Returns, and Amended Returns)
For the 2018 tax year, the standard filing deadline for Form 1040-NR is April 15, 2019, but that only applies if you received wages as an employee subject to U.S. income tax withholding. If you didn't receive such wages—perhaps you only had self-employment income, rental income, or investment income—your deadline extends to June 17, 2019 (the 15th day of the 6th month after the tax year ends). This extended deadline recognizes that nonresidents who aren't employees may need additional time to gather documentation from overseas.
You can request an extension of time to file by submitting Form 4868, which gives you until October 15, 2019, to file your return. However, an extension to file is not an extension to pay—if you owe taxes, you must still pay the estimated amount by the original April or June deadline to avoid interest and penalties.
If you miss the filing deadline entirely, you should still file as soon as possible. The IRS calls these ""past due returns,"" and while you'll face penalties and interest charges, filing late is always better than not filing at all. The longer you wait, the steeper the penalties become. The failure-to-file penalty is typically 5 percent of the unpaid taxes for each month (or part of a month) your return is late, up to a maximum of 25 percent. If you're due a refund rather than owing taxes, there's no penalty for filing late, but you have only three years from the original due date to claim your refund—after that, the money goes to the U.S. Treasury.
If you need to correct a Form 1040-NR that you've already filed, you'll use Form 1040-X, the Amended U.S. Individual Income Tax Return. Common reasons for amending include discovering you claimed the wrong filing status, missed deductions or credits, reported incorrect income, or even filed the wrong form entirely (for instance, if you filed Form 1040 when you should have filed Form 1040-NR). Generally, 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. You can track your amended return's status using the ""Where's My Amended Return?"" tool on the IRS website, though it can take up to three weeks for your amendment to show up in the system and up to 16 weeks (or longer) for the IRS to process it. IRS.gov
Key Rules and Details for 2018
Who Must File and Important Distinctions
The question of whether you must file Form 1040-NR hinges on your residency status and the nature and amount of your U.S. income. The IRS determines residency through two tests: the green card test (you're a lawful permanent resident at any time during 2018) and the substantial presence test (you were physically present in the United States for at least 31 days during 2018 and a total of 183 ""testing days"" over a three-year period). If you meet either test, you're generally considered a resident alien and would file Form 1040 instead. If you don't meet these tests, you're a nonresident alien who typically files Form 1040-NR.
However, there's an important exception called the ""closer connection"" rule: even if you meet the substantial presence test by being in the United States fewer than 183 days during 2018, you can still be treated as a nonresident if you maintain a tax home in a foreign country and demonstrate closer connections to that country than to the United States. To claim this exception, you must file Form 8840 with the IRS.
Once you've established you're a nonresident alien, several specific circumstances trigger a filing requirement. You must file if you engaged in any U.S. trade or business during 2018, regardless of whether that business generated income or profit. The ""trade or business"" concept is broad—it can include working as an employee, operating a sole proprietorship, or even making sales in the United States. You also must file if you received U.S. source income that's reportable on Schedule NEC (dividends, interest, royalties, pensions) and not all the tax was withheld at source.
Certain exceptions exist where filing isn't required. For example, nonresident alien students, teachers, or trainees temporarily in the United States on F, J, M, or Q visas don't need to file if their only income is subject to tax under section 871 and meets certain conditions. Similarly, partners in U.S. partnerships who received only certain types of income may not need to file, and anyone with gross income of less than five dollars is exempt (though such minimal income is rare).
An important distinction for 2018 involves the treatment of spouses and dependents. For most nonresident aliens, you cannot claim a standard deduction, and personal exemptions were suspended for 2018. However, students and business apprentices from India eligible under Article 21(2) of the U.S.-India tax treaty can claim the standard deduction if they meet income thresholds. Additionally, to claim the child tax credit, your qualifying child must have a Social Security number (SSN) valid for employment issued before your return's due date—an Individual Taxpayer Identification Number (ITIN) alone won't qualify for this credit, though it may qualify for the new $500 credit for other dependents. IRS.gov
Step-by-Step (High Level)
How to Complete Form 1040-NR
Completing Form 1040-NR requires careful attention to distinguishing between your different types of U.S. income and understanding which schedules to use. The form consists of multiple pages, including Schedule NEC for income not effectively connected with a U.S. business and Schedule OI for other information about your residency and treaty claims.
Start by filling out your personal information at the top of page one: your name exactly as it appears on your Social Security card or Individual Taxpayer Identification Number (ITIN) documentation, your U.S. address (or foreign address if you don't have a U.S. address), and your identifying number. The identifying number is crucial—it's either your SSN, ITIN, or in limited cases, an adoption taxpayer identification number (ATIN). Without a valid identifying number, your return cannot be processed.
Next, determine your filing status. Unlike U.S. citizens and residents who have five filing status options, nonresident aliens are limited to three: single, married filing separately, or qualifying widow(er) with dependent child. Most nonresident aliens file as single even if married, unless their spouse is a U.S. citizen or resident alien and they elect to be treated as resident aliens. The filing status affects your tax rates and which tax table or tax rate schedule you use.
On page one, report all income effectively connected with your U.S. trade or business. This includes wages (report amounts from Form W-2), business income or loss (from Schedule C), capital gains or losses that are effectively connected (from Schedule D), and other effectively connected income from partnerships, rental properties, or other sources. Calculate your adjusted gross income by subtracting allowable adjustments like the deductible part of self-employment tax or contributions to eligible retirement accounts. Then calculate your taxable income—since most nonresident aliens can't claim the standard deduction, you'll need to itemize deductions on Schedule A if you have deductible expenses.
Use the tax table or rate schedule appropriate for your filing status to calculate your tax on effectively connected income. For 2018, the tax rates were 10, 12, 22, 24, 32, 35, and 37 percent depending on income level. Then complete Schedule NEC to calculate tax on income not effectively connected with a U.S. business—this is where you report dividends, interest, royalties, and similar passive income, which is generally taxed at 30 percent (or a lower treaty rate). Attach Form 1042-S showing any tax withheld at source.
Add any other taxes you owe, such as self-employment tax (Schedule SE) or additional taxes on retirement accounts. Then report all tax payments already made, including amounts withheld shown on Forms W-2 and 1042-S, estimated tax payments, and any credits you're claiming. The most common credits for nonresident aliens are the child tax credit, the credit for federal tax on fuels, and in some cases, the premium tax credit if you purchased health insurance through the Marketplace.
Finally, complete Schedule OI to provide additional information about your country of residence, whether you're claiming tax treaty benefits, the number of days you were present in the United States, and other relevant details. If claiming treaty benefits, you may also need to attach Form 8833. Sign and date your return, attach all required forms and schedules (especially Forms W-2 and 1042-S), and mail it to the appropriate IRS address based on whether you're enclosing a payment. IRS.gov
Common Mistakes and How to Avoid Them
One of the most frequent errors on Form 1040-NR involves incorrect or missing taxpayer identification numbers. Every person listed on your return—you, your spouse if filing jointly (which requires special election), and each dependent—must have a valid identifying number. For children claimed for the child tax credit, that number must specifically be an SSN valid for employment, not just an ITIN. To avoid this mistake, apply for your ITIN well before the filing deadline using Form W-7, and make sure your children's Social Security numbers are issued before your return is due.
Math errors rank as another leading cause of processing delays and IRS notices. The most common calculation mistakes occur when figuring the child tax credit, adding up total income, computing itemized deductions, determining taxable income, calculating total tax, totaling federal income tax withheld, and computing your refund or amount owed. The simplest way to prevent these errors is to use tax preparation software or IRS Free File, which performs calculations automatically. If you're preparing your return by hand, double-check every calculation and use a calculator rather than mental math.
Many nonresident aliens make errors related to the distinction between effectively connected income and income not effectively connected with a U.S. business. Remember that effectively connected income (typically from employment or business activities) goes on page one and is taxed at graduated rates, while FDAP income (passive income like dividends and interest) goes on Schedule NEC and faces flat-rate taxation. Putting income in the wrong category can result in paying too much or too little tax. When in doubt, consult Publication 519 or seek help from a tax professional familiar with nonresident alien taxation.
Failing to attach required documentation is another common problem. You must attach your Forms W-2 to the left margin of page one, and you must attach Forms 1042-S if you're claiming a refund of tax withheld at source. If you're claiming treaty benefits, attach Form 8833 if required. Missing documentation can delay your refund by months while the IRS requests the documents and waits for you to respond.
Address errors cause significant problems because the IRS uses your address to mail refund checks (if you don't choose direct deposit) and important notices. Make sure your address is current and complete, including your apartment number if applicable. If you move after filing, submit Form 8822 to notify the IRS of your address change.
Filing more than one original return for the same tax year creates confusion and processing delays. If you discover an error after mailing your return, wait to receive either your refund or a notice from the IRS before filing an amended return. The IRS computer systems can't efficiently handle multiple original returns and may freeze your account until the situation is manually resolved.
Incorrectly claiming you're eligible for a tax treaty benefit when you don't qualify can trigger audits and penalties. To claim treaty benefits, you generally must be a resident of the treaty country for income tax purposes and not have a permanent establishment or fixed base in the United States. You must also complete the relevant sections of Schedule OI and, in many cases, attach Form 8833. IRS.gov
What Happens After You File
Once you mail your Form 1040-NR to the IRS (either to Austin, Texas, if you're not enclosing a payment, or Charlotte, North Carolina, if you are), the waiting begins. For paper returns, you can generally check the status of your refund about four weeks after mailing using the ""Where's My Refund?"" tool on IRS.gov or the IRS2Go mobile app. These tools are available 24 hours a day, seven days a week, and provide real-time updates on whether the IRS has received your return, is processing it, or has approved and sent your refund.
If you're entitled to a refund, you'll receive it faster if you chose direct deposit rather than a paper check. The IRS typically issues refunds within 21 days of receiving an electronically filed return or six to eight weeks for paper returns. However, refunds for returns claiming the additional child tax credit cannot be issued before mid-February under federal law, which provides the IRS time to verify eligibility and combat fraud. If your refund is delayed beyond these timeframes, you can use the refund tracking tools or call the IRS refund hotline.
If you owe tax, the IRS expects payment by the original due date regardless of whether you filed an extension. You can pay online through IRS Direct Pay (free transfers from your U.S. bank account), by debit or credit card (with a convenience fee charged by the payment processor), by phone through the Electronic Federal Tax Payment System (EFTPS), or by mailing a check or money order with your return. If you don't pay by the due date, the IRS begins charging interest on the unpaid balance from the original due date plus a failure-to-pay penalty of 0.5 percent per month. If your check bounces, you'll face a bad check penalty of $25 or 2 percent of the check amount, whichever is more.
Not all returns are processed without questions. The IRS may send you a notice requesting additional information, clarification about items on your return, or documentation to support deductions or credits you claimed. These notices aren't necessarily audits—often the IRS just needs a straightforward explanation or a missing form. Respond promptly to any IRS correspondence, keeping copies of everything you send and using certified mail with return receipt requested for important documents.
If the IRS finds an error that changes your tax liability, they'll send you either a bill for additional tax owed or a refund of overpaid tax. You have the right to disagree with any IRS adjustment by following the instructions in the notice you receive. You might need to provide additional documentation, file an amended return, or in some cases, appeal the IRS decision through the Office of Appeals.
In some situations, the IRS may hold your refund for additional review, particularly if you're a first-time filer, claimed certain refundable credits, or your return shows patterns associated with identity theft or fraud. While frustrating, these reviews help protect both you and the tax system. The IRS will typically contact you for additional verification before releasing your refund. IRS.gov
FAQs
If I had no income from my U.S. business activity, do I still need to file Form 1040-NR?
Yes, if you engaged in a trade or business in the United States during 2018, you must file Form 1040-NR even if that business generated no income or loss. The filing requirement is triggered by the business activity itself, not by whether the activity was profitable. When filing with no gross income, you don't need to complete all the schedules—instead, attach a list of the types of exclusions you're claiming and the amount of each.
Can I use the simpler Form 1040-NR-EZ instead of Form 1040-NR?
Possibly, if you meet all the requirements. Form 1040-NR-EZ is a simplified version available only if your only U.S. income comes from wages, salaries, tips, refunds of state and local income taxes, scholarship or fellowship grants, and nontaxable interest or dividends. You cannot use Form 1040-NR-EZ if you're taking the qualified business income deduction or had taxable interest or dividend income. Check the Form 1040-NR-EZ instructions to verify your eligibility before using it.
What if I'm not sure whether I'm a resident alien or nonresident alien for tax purposes?
Your residency status for tax purposes depends on two tests: the green card test and the substantial presence test. If you held a green card (lawful permanent resident status) at any time during 2018, you're generally a resident alien. Otherwise, count your days of physical presence: if you were in the United States at least 31 days during 2018 and at least 183 ""testing days"" over 2016-2018 (using a weighted formula), you meet the substantial presence test and are generally a resident. However, exceptions exist, such as the closer connection rule. Publication 519 provides detailed guidance, and if you're still uncertain, consider consulting a tax professional experienced in international taxation.
How do I claim benefits under a tax treaty between the United States and my country?
To claim treaty benefits, you must generally be a resident of the treaty country for income tax purposes. Complete the relevant items on Schedule OI, particularly Item L, where you identify the treaty country, the specific treaty article you're relying on, the number of months in prior years you claimed treaty benefits, and the amount of exempt income. You may also need to attach Form 8833 if the treaty position you're taking is a ""reportable treaty position."" Claiming treaty benefits without proper qualification can result in penalties, so review the specific treaty provisions and ensure you meet all requirements.
What if I'm a student on an F-1 visa—do I have any special rules?
Yes, students on F, J, M, or Q visas have several special considerations. You're considered an ""exempt individual"" for purposes of the substantial presence test, meaning your days in the United States as a student don't count toward the 183-day threshold (though this exemption has time limits—generally no more than five calendar years). You may not need to file Form 1040-NR if your only income is subject to tax under section 871, such as scholarship income for room and board. However, if you worked in the United States and received wages subject to income tax withholding, or if you had other U.S. income, you likely need to file. You may also need to file Form 8843 even if you don't need to file a tax return.
Can I file Form 1040-NR electronically, or must I mail a paper return?
You can e-file Form 1040-NR using commercial tax preparation software or through a tax professional who offers e-filing. Electronic filing provides several advantages: faster processing, quicker refunds (especially with direct deposit), immediate confirmation that the IRS received your return, greater accuracy due to automated calculations, and less chance of processing delays. The IRS reports that e-filed returns have error rates far lower than paper returns. However, not all nonresident alien situations are supported by e-file software, so you may need to file by paper in complex cases.
What should I do if I never filed Form 1040-NR for previous years when I should have?
File the missing returns as soon as possible, even if they're several years late. The IRS has no statute of limitations on assessing tax when a required return isn't filed, meaning they can come after you at any time. Prepare each year's return using the forms and instructions for that specific year (available in the IRS's prior year forms section), and file them separately—don't combine multiple years onto one return. While you'll face penalties and interest, voluntarily filing late returns generally results in better treatment than being caught by the IRS. If your situation is complex or involves many years, consider consulting a tax professional or seeking help through the IRS's Voluntary Disclosure programs.
All information in this summary is drawn from official IRS sources, including Form 1040-NR instructions for 2018 and related IRS publications.
