Form 1040-NR Instructions for Nonresident Aliens

If you are a nonresident alien with U.S.-source income, you report it on Form 1040-NR rather than the standard Form 1040. These Form 1040-NR instructions for nonresident aliens cover the essentials: your 2025 return is due April 15, 2026 if you had wages subject to U.S. withholding, or June 15, 2026 if your only U.S. income was passive.¹ The form is used by students on F, J, M, or Q visas, teachers and trainees temporarily in the country, business visitors, and anyone else who doesn’t qualify as a U.S. resident for tax purposes but earned money here.²

Who Actually Files Form 1040-NR

You file 1040-NR if you were a nonresident alien engaged in a U.S. trade or business, or if you had U.S.-source income that wasn’t fully covered by withholding.³ Representatives of the estate of a deceased nonresident alien use it too. The threshold question is your residency status, because residents file the regular Form 1040 and owe tax on worldwide income, while nonresidents owe tax only on U.S.-source income.

Two tests decide residency. If you held a green card at any point during the calendar year, you’re a resident.⁴ Otherwise the substantial presence test applies: you’re a resident if you were physically present at least 31 days in the current year and hit a weighted total of 183 days across the current year and the two prior years, counting each day in the current year at full value, each day in the prior year at one-third, and each day two years back at one-sixth.

A closer connection exception can preserve nonresident status even when the numbers tip the other way. It applies if you were present fewer than 183 days in the current year, kept a tax home abroad, and can show stronger ties to that country than to the United States.⁵

Students, Teachers, and Trainees Get a Carve-Out

If you are a student on an F, J, M, or Q visa, or a teacher or trainee on a J or Q visa, your days of presence don’t count toward the substantial presence test at all, as long as you substantially comply with your visa terms.⁶ The IRS calls you an “exempt individual,” but the label refers only to exemption from the day-counting formula, not from tax itself.

To claim the exclusion, file Form 8843 with your return. If you owe no tax and have no filing requirement, send Form 8843 to the IRS on its own by the return due date.⁷ Skip it and the IRS can count all your days of presence, potentially making you taxable on your worldwide income. Undoing that result puts the burden on you to show by clear and convincing evidence that you took reasonable steps to comply.

When the Return Is Due

Your deadline depends on the income you received. Wages subject to U.S. withholding pull your 2025 return to April 15, 2026. If your U.S. income was purely passive with no wage withholding, you have until June 15, 2026.¹ Tax owed is due by your filing deadline, so the June 15 date also extends the payment date for passive-income filers.

Need more time? File Form 4868 before your due date for an automatic six-month extension, pushing the filing deadline to October 15, 2026.⁸ An extension buys time to file, not time to pay. Interest and the failure-to-pay penalty run on any unpaid balance after the original due date.

What to Gather Before You Start

You need a taxpayer identification number to file. Use your Social Security number if you have one; if not, apply for an Individual Taxpayer Identification Number using Form W-7.⁹ The IRS charges no fee to process W-7, though Certifying Acceptance Agents who verify your identity documents typically charge $50 to $200. You can attach Form W-7 to your 1040-NR and submit them together, so the ITIN doesn’t need to be in hand before you prepare the return.¹⁰

Collect your income documents up front. You’ll typically be working with one or more of these:

Form W-2, reporting wages and tax withheld by an employer.
Form 1042-S, reporting income subject to withholding under the international provisions of the tax code, including scholarships, fellowship grants, and royalties.¹¹
Form 1099-NEC, reporting payments for independent contractor work or other nonemployee compensation.

The current Form 1040-NR and its instructions are available on irs.gov.

How Your Income Gets Taxed

The form splits your income into two categories, and the rules are very different.

Effectively Connected Income

Wages, salaries, and business profits earned while performing services in the United States are effectively connected income (ECI). ECI is taxed at the same graduated rates that apply to U.S. citizens and residents, ranging from 10% to 37%.¹² You calculate the tax the same way a resident would: gross income, minus allowable deductions, run through the tax tables. Most students and workers filing 1040-NR fall here.

Fixed or Determinable Income (FDAP)

Passive income from U.S. sources, such as interest, dividends, rents, and annuities, is generally taxed at a flat 30%, with no deductions allowed against it.¹² A tax treaty between the United States and your home country often reduces or eliminates that rate. Bank deposit interest and portfolio interest are exempt from U.S. tax for nonresident aliens even without a treaty.¹³

Capital Gains

Capital gains not connected to a U.S. trade or business are generally not taxed for nonresident aliens. The exception matters: if you were physically present in the United States for 183 days or more during the tax year, your net U.S.-source capital gains are taxed at a flat 30%.¹⁴ Gains that are effectively connected with a U.S. business are taxed at the regular graduated rates instead.

Deductions and Credits Are Limited

The single biggest disadvantage compared with residents: you cannot claim the standard deduction on Form 1040-NR.¹⁵ A narrow exception exists for students and business apprentices from India under a specific treaty provision. Everyone else must itemize or take nothing.

Available itemized deductions are limited to expenses connected with your effectively connected income:¹⁶

State and local income taxes, capped at $10,000 combined ($5,000 if married filing separately) and only on taxes paid on effectively connected income.¹⁵
Charitable contributions to U.S.-based qualified organizations only; donations to foreign charities are not deductible.
Casualty and theft losses from a federally declared disaster involving property located in the United States.
Ordinary and necessary business expenses tied to your U.S. trade or business, fully deductible against that income.

Credits are also restricted. The child tax credit and credit for other dependents are available only to residents of Canada and Mexico, with limited availability for residents of India and South Korea.¹⁷ From any other country, those credits are off the table regardless of how many qualifying children you have.

Schedule OI and Treaty Claims

Schedule OI is a required attachment. It reports your visa type, days present over the past three years, whether you’ve applied for a green card, and whether your residency status changed during the year.³ The IRS uses it to verify that you actually qualify as a nonresident, so any inaccuracy invites scrutiny.

Line L on Schedule OI is where you list income exempt under a tax treaty. Enter the treaty country, the specific article, the number of months you claimed the benefit in prior years, and the amount of exempt income for the current year.¹⁸ The exempt amount on Line L must match what you report elsewhere on the return.

When a treaty provision overrides or modifies a section of the Internal Revenue Code, attach Form 8833.¹⁹ The form asks for a summary of the facts supporting your claim, the nature and amount of the income, and a citation to the specific treaty article you’re relying on. Missing Form 8833 when it’s required carries a $1,000 penalty per failure, even if you were entitled to the treaty benefit. IRS Publication 901 summarizes treaty provisions by country; check it before choosing an article number.

FICA Withheld in Error and How to Get It Back

Nonresident alien students on F-1, J-1, or M-1 visas who have been in the United States fewer than five calendar years are generally exempt from Social Security and Medicare taxes on wages from qualifying employment.²⁰ Qualifying employment includes on-campus work (up to 20 hours per week during the academic term, 40 hours during summer), USCIS-authorized off-campus employment, and practical training. The exemption does not extend to spouses or children on dependent visas, or to students who have become resident aliens.

If your employer withheld FICA in error, ask the employer for a refund first. Many campus payroll offices will correct the mistake directly. If you can’t get a full refund from the employer, file Form 843 (Claim for Refund and Request for Abatement) with Form 8316, along with your W-2 showing the withholding, a copy of your visa, and your I-20 or DS-2019.²⁰

If Your Residency Status Changed Mid-Year

A dual-status year applies when you were a nonresident for part of the year and a resident for the rest, such as when a green card comes through mid-year or arrival and departure split the year. During the nonresident portion you’re taxed only on U.S.-source income; during the resident portion, on worldwide income.²¹

Dual-status filers cannot claim the standard deduction for the year, even for the resident portion, but may itemize allowable deductions.²¹ The mechanics are more complex than a straight 1040-NR: you file one form as the main return and attach a statement covering the other period. Publication 519’s chapter on dual-status returns walks through the details, and professional help is often worth the cost here.

Submitting the Return

Form 1040-NR can be e-filed, and the IRS encourages it. E-filing produces a confirmation receipt, reduces processing errors, and speeds refunds when you choose direct deposit.¹ IRS Free File, VITA (Volunteer Income Tax Assistance), and several commercial platforms support Form 1040-NR, though not every free option handles the nonresident form. Confirm 1040-NR support before committing.

If you file by mail, the address depends on whether you’re enclosing a payment:²²

Without payment: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215.
With payment: Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303.

Paper returns take significantly longer to process. Expect six to eight weeks or more for a refund compared with a few weeks for e-filing with direct deposit.

Penalties If You File or Pay Late

Missing the deadline without an extension triggers a failure-to-file penalty of 5% of the unpaid tax for each month or partial month the return is late, up to a maximum of 25%.²³ A separate failure-to-pay penalty of 0.5% per month applies to any balance due after the deadline. When both apply in the same month, the combined rate caps at 5% for that month.²⁴ File on time even if you can’t pay in full. The failure-to-file penalty is ten times steeper than the failure-to-pay penalty.

Getting a Departure Permit Before You Leave

Most nonresident aliens must obtain a departure permit (sometimes called a “sailing permit”) before leaving the United States, as proof they’ve settled their tax obligations. Get it by filing Form 1040-C or Form 2063 with your local IRS office and paying any tax due.²⁵ Apply at least two weeks before your planned departure, and no more than 30 days out. Appointments are required, so don’t leave it for the end.

Several categories are exempt. Students on F-1, F-2, J-1, J-2, or Q visas who received no U.S.-source income (with narrow exceptions) don’t need a permit. Certain B-1 business visitors who stayed fewer than 90 days and B-2 visitors for pleasure are also exempt, among other categories.²⁶ If you earned wages or other taxable income, plan around this requirement, because it involves an in-person visit to an IRS office that can’t be handled at the airport.

1
Internal Revenue Service. Instructions for Form 1040-NR (2025)
2
Internal Revenue Service. Taxation of Nonresident Aliens
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Internal Revenue Service. About Form 1040-NR, U.S. Nonresident Alien Income Tax Return
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eCFR. 26 CFR 301.7701(b)-1 – Resident Alien
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eCFR. 26 CFR 301.7701(b)-2 – Closer Connection Exception
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Internal Revenue Service. Substantial Presence Test
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Internal Revenue Service. Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition
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Internal Revenue Service. Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return
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Internal Revenue Service. About Form W-7, Application for IRS Individual Taxpayer Identification Number
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Internal Revenue Service. Instructions for Form W-7
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Internal Revenue Service. Instructions for Form 1042-S
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Office of the Law Revision Counsel. 26 U.S. Code 871 – Tax on Nonresident Alien Individuals
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Internal Revenue Service. Nontaxable Types of Interest Income for Nonresident Aliens
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Office of the Law Revision Counsel. 26 USC 871 – Tax on Nonresident Alien Individuals
15
Internal Revenue Service. Publication 519 (2025), U.S. Tax Guide for Aliens
16
Internal Revenue Service. Nonresident – Figuring Your Tax
17
Internal Revenue Service. Instructions for Form 1040-NR
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Internal Revenue Service. Schedule OI (Form 1040-NR)
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Internal Revenue Service. Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)
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Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes
21
Internal Revenue Service. Taxation of Dual-Status Individuals
22
Internal Revenue Service. Where to File – Forms Beginning With the Number 1
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Internal Revenue Service. Failure to File Penalty
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Internal Revenue Service. Late Filing and Late Payment Penalties
25
Internal Revenue Service. Departing Alien Clearance (Sailing Permit)
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Internal Revenue Service. Topic No. 858, Alien Tax Clearance