Form 1040NR: Nonresident Alien Tax Return Checklist for Tax Year 2012
Year-Specific Context
Form 1040NR for tax year 2012 applies to calendar year 2012 (January 1 through December 31, 2012) or fiscal years beginning in 2012. The personal exemption amount is $3,800.
Nonresident aliens must itemize deductions and cannot claim the standard deduction, earned income credit, credit for the elderly or disabled, child and dependent care credit, or education credits unless married filing jointly with a U.S. citizen or resident spouse with an election to be treated as a resident.
Step-by-Step Filing Process
Step 1: Select Your Filing Status
Choose single nonresident alien, married nonresident alien filing separately, or qualifying widow or widower with dependent child. Most nonresident aliens file as single or married filing separately. Special statuses exist for residents of Canada, Mexico, and South Korea. You cannot file as married filing jointly without a special election or as head of household.
Step 2: Claim Personal and Dependent Exemptions
Enter your personal exemption of $3,800 on line 7d. Claim a spouse exemption only if your spouse had no U.S. gross income and cannot be claimed by another taxpayer. List all qualifying dependents with name, identification number, relationship, and residence status. Check column 4 for each qualifying child for the child tax credit, which requires Form 8812 if claiming the additional child tax credit on line 64.
Step 3: Gather Required Documents
Collect Form W-2 for wages, Form 1042-S for U.S.-source income with withholding, Forms 1099-INT/DIV/R/OID for investment and retirement income, Schedule K-1 from partnerships or S corporations, and records of treaty-exempt income.
Gather documentation for itemized deductions, including state and local income taxes, mortgage interest statements, charitable contribution acknowledgments for amounts of $250 or more, and casualty or theft loss records.
Step 4: Report Income Effectively Connected with a U.S. Trade or Business
Report effectively connected income on page 1, lines 8 through 22: wages (line 8), taxable interest (line 9a), dividends (line 10), state and local tax refunds (line 11), alimony (line 12), business income (line 13), capital gains or losses (line 14), other gains or losses (line 15), IRA distributions (lines 16a-16b), pensions and annuities (lines 17a-17b), rental real estate and partnership income (line 18), farm income (line 19), unemployment compensation (line 20), Social Security benefits (lines 21a-21b), and other income (line 22). Do not include non-effectively connected income on these lines.
Step 5: Calculate Adjustments to Income and AGI
Subtract allowable adjustments from total income: educator expenses (line 24), health savings account deduction (line 25), moving expenses (line 26), self-employment tax deduction (line 27), self-employed SEP and qualified plans (line 28), self-employed health insurance (line 29), early withdrawal penalty (line 30), scholarship and fellowship exclusion (line 31), IRA deduction (line 32), student loan interest (line 33), and domestic production activities deduction (line 34).
Enter total adjustments on line 35. Subtract line 35 from line 23 to calculate adjusted gross income on line 36.
Step 6: Complete Schedule A for Itemized Deductions
Nonresident aliens must itemize all deductions on Schedule A. Report state and local income taxes on line 1, mortgage interest on line 8, and charitable contributions to U.S. organizations on line 11. Attach Form 8283 if noncash property contributions exceed $500.
Report casualty and theft losses on line 15 after reducing each casualty by $100 and the total by 10% of AGI. Casualty losses result from sudden, unexpected, or unusual events such as fires, storms, floods, theft, vandalism, or accidents.
Report unreimbursed employee expenses and job-related miscellaneous deductions on line 20, subject to 2% of AGI threshold calculated on line 24. Enter total itemized deductions on line 27 and transfer to line 38 of Form 1040NR.
Step 7: Complete Schedule NEC for Income Not Effectively Connected
Report income not effectively connected with a U.S. trade or business on Schedule NEC and calculate tax at statutory rates. Report dividends (line 1a), interest (line 1b), royalties (line 3), pensions and annuities (line 4), Social Security benefits (line 5), capital gains (line 10), gambling winnings (line 12), and other income (line 13).
Standard rate is 30% unless a tax treaty provides a lower rate. Portfolio interest under Section 871(h) may be exempt.
For Social Security benefits, 85% of the amount is subject to tax, though many treaties provide complete exemptions. Calculate tax by multiplying income by applicable rates and enter total tax on line 15. Transfer to line 53 of Form 1040NR.
Step 8: Complete Schedule OI for Other Information
Answer all questions on Schedule OI. Provide citizenship country (Item A), country of tax residence (Item B), U.S. visa type and entry/departure dates (Item C), and information about prior filings and trusts (Items D-J).
If claiming treaty benefits, enter the treaty country, applicable article, months benefits claimed on previous years, and 2012 exempt income amount on Item L. Attach Form 8833 if treaty benefits reduce or eliminate U.S. tax.
Step 9: Calculate Taxable Income and Tax
Calculate taxable income by subtracting itemized deductions and exemptions from AGI. Enter AGI from line 36 on line 37, itemized deductions on line 38, and subtract to get line 39. Enter total exemptions from line 7d on line 40. Subtract line 40 from line 39 to determine taxable income on line 41.
Calculate tax using the 2012 Tax Table or the Tax Computation Worksheet and enter on line 42. Add alternative minimum tax from Form 6251 on line 43 if applicable.
Step 10: Apply Allowable Tax Credits
Claim the foreign tax credit on line 45 using Form 1116 regardless of the amount of foreign taxes paid. Claim retirement savings contributions credit on line 47 using Form 8880 if eligible.
Claim the child tax credit on line 48 if you are a U.S. national or resident of Canada, Mexico, or South Korea with qualifying children. Do not claim earned income credit, credit for the elderly or disabled, child and dependent care credit, or education credits unless you elected to be treated as a U.S. resident.
Step 11: Add Other Taxes and Calculate Total Tax
Enter tax on non-effectively connected income from Schedule NEC line 15 on line 53. Add self-employment tax from Schedule SE on line 54, additional tax on retirement plans from Form 5329 on line 55, household employment taxes from Schedule H on line 56, and first-time homebuyer credit repayment on line 58 if applicable.
Add lines 44 and 53 through 59 to calculate the total tax on line 60.
Step 12: Report Payments and Credits
Report federal income tax withheld from Forms W-2 and 1099 on line 61a, withholding from Form 8805 on line 61b, withholding from Form 8288-A on line 61c, and withholding from Form 1042-S on line 61d. Enter 2012 estimated tax payments on line 62.
Report additional child tax credit from Form 8812 on line 64, excess social security tax withheld on line 66, and other fees on lines 67-68. Total all payments on line 69.
Step 13: Calculate Refund or Amount Owed
If line 69 exceeds line 60, subtract line 60 from line 69 and enter the overpayment on line 70, indicating an overpayment. Indicate the refund amount on line 71 and the amount to apply to the 2013 estimated tax on line 72. Complete direct deposit information on lines 71b-71d if desired.
If line 60 exceeds line 69, subtract line 69 from line 60 and enter the amount owed on line 73. Calculate the estimated tax penalty on Form 2210 if applicable and enter it on line 74.
Step 14: Sign, Assemble, and Mail Your Return
Sign and date your return on page 5. Include spouse’s signature if filing jointly. Complete the Third Party Designee section if authorizing someone to discuss your return with the IRS. If using a paid preparer, ensure they sign and provide their PTIN.
Attach all Forms W-2, W-2G, and 1099 showing withholding to the front of page 1. Attach Form 1042-S behind Forms W-2. Attach Schedule A, Schedule NEC, and Schedule OI in order.
Attach Form 8833 if claiming treaty benefits, Form 1116 if claiming foreign tax credit, Form 8812 if claiming additional child tax credit, and Form 8843 if claiming closer connection exception.
Attach charitable contribution acknowledgments, Form 8283 if noncash contributions exceed $500, casualty loss documentation, and all Schedule K-1 forms.
Mail the form to the appropriate IRS address listed in the Form 1040NR instructions, based on your location and whether you are including a payment. Use certified mail with a return receipt requested.
Key Reminders for 2012
Personal exemption is $3,800. The filing deadline is June 17, 2013, for most nonresident aliens; however, if you had wages subject to withholding, it is April 15, 2013. Nonresident aliens must itemize deductions. Tax treaty benefits require proper documentation on Schedule OI and may necessitate the completion of Form 8833.
The child tax credit is available only to U.S. nationals or residents of Canada, Mexico, or South Korea. Maintain copies of your return and supporting documentation for a minimum of three years.
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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.
