When You Should Use Form 1040NR-EZ

You should use Form 1040NR-EZ if you are a single nonresident alien or married nonresident alien and the following conditions apply to you:

• You cannot be claimed as a dependent on someone else's return;
• Your Only U.S. income is from wages, salaries, and tips, refunds of state and local income taxes, and/or scholarship or fellowship grants and nontaxable interest or dividends.
• Your taxable income is less than $100,000
• You cannot claim:
• Dependents
• Exemption for a spouse
• Tax credits
• Itemized deductions other than for a state and local income taxes
• Adjustments to income other than exclusions for scholarship and fellowship grants
• The only exclusion you can take is the exclusion for scholarship and fellowship grants, and the only adjustment to income you can take is the student loan interest deduction.
• The only taxes you owe are:
• The tax from the Tax Table; or
• unreported social security and Medicare tax from Forms 4137 or Form 8919

 

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Are You a Nonresident Alien?

If you are a nonresident alien at any time during the tax year, you cannot file as head of household. The only filing status available for nonresidents from most countries (except Canada, Mexico and South Korea) is:

• Single - The rate schedule for single filers is more favorable than for married filing separately.
• Married Nonresident Aliens Filing Separately - A married nonresident aliens who is not married to a US citizen or resident generally must use the tax rate schedule for married filing separate returns when determining the tax on income effectively connected with a US trade or business. You normally cannot use the tax rate schedule for single individuals.

Nonresidents aliens generally can claim only one personal exemption for themselves on their tax return. A nonresident alien may be able to claim an exemption for a spouse and a dependent if they are residents of Mexico or Canada or U.S. nationals and if a spouse had no gross income for U.S. tax purposes and cannot be claimed as the dependent on another U.S. taxpayer's return. 

Nonresidents aliens (other than those covered by the United States - India Income Tax Treaty) cannot claim the standard deduction. A nonresident alien generally cannot claim deductions related to income that is not connected with his U.S. business activities.  A nonresident alien can deduct certain itemized deductions if he receives income effectively connected with his U.S. trade or business. These deductions include state and local income taxes, charitable contributions to U.S. organizations, casualty and theft losses, and miscellaneous deductions. Use schedule A of Form 1040NR to claim itemized deductions.

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Who Must File Form 1040NR

Generally, a nonresident alien who receives U.S. source income must file a return on Form 1040NR if additional taxes are due or if conducting a business in the United States. A nonresident alien who is married to a U.S. citizen or resident at the end of the year can choose tax treatment as a U.S. resident.

You must file Form 1040NR if any of the following conditions apply:

• A nonresident alien engaged in a trade or business in the United States during 2015 must file even if he does not receive income from the trade or business, has no U.S. source income, or receives income exempt from U.S. tax. However, a nonresident alien taxpayer with no gross income does not complete the schedules for Form 1040NR. Instead, he should attach a list of the kinds of exclusions claimed and the amount of each.
• A nonresident alien not engaged  in a trade or business in the United States during 2015 who received income from U.S. sources reportable on Schedule NEC, Tax on Income Not Effectively Connected with a U.S. Trade or Business and not all of the U.S. tax owed was withheld from that income.
• You represent a deceased person who would have had to file Form 1040NR
• You represent an estate or trust that has to file Form 1040NR

A nonresident alien must also file a return if owing any special taxes, including any of the following:

• Alternative minimum tax
• Additional tax on a qualified plan, including an Individual Retirement Arrangement (IRA), or other tax-favored account. However, if this is the only tax owed, you can file Form 5329 by itself.
• Household employment taxes. However, if this is the only tax owed, you can file Schedule H by itself.
• Social security and Medicare tax on tips not reported to the employer or on wages received from an employer who did not withhold these taxes.
• Recapture of first-time homebuyer credit.
• Write-in taxes or recapture taxes, including uncollected social security and Medicare or RRTA tax on tips reported to an employer or group-term life insurance and additional taxes on HSAs.
• You have net earnings from self-employment of at least $400 and is a resident of a country with whom the United States has an international social security agreement.

A nonresident alien does not need to file Form 1040NR if:

• The only U.S. trade or business was the performance of personal services; and
• Wages were less than $4,000; and
• You have no other need to file a return to claim a refund of over withheld taxes, to satisfy additional withholding at source, or to claim income exempt or partly exempt by treaty
• You are a nonresident alien student, teacher, or trainee temporarily present in the United States under an "F", "J", "M" or "Q" visa, and have no income that is subject to tax under section 871.
• You are a partner in a U.S. partnership that was not engaged in a trade o business in the United States during the tax year and Schedule K-1 (Form 1065) includes only income from U.S sources that is reportable on Schedule NEC

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Are you a Resident or Nonresident Alien for Tax Purposes?

If you are not a U.S citizen, it is important to know if you are a resident or nonresident alien because this affect your tax return. Most U.S. source income a nonresident alien receives is subject to withholding with a tax rate of 30%. Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return or Form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents. A nonresident alien who is married to a U.S. citizen or resident at the end of the year can choose tax treatment as a U.S resident.

Generally, the IRS considers a person a resident alien if he or she meets either the green card test or the substantial presence test.

To meet the substantial presence test, the nonresident alien must be physically present in the United States (U.S.) on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
   • All the days you were present in the current year, and
   • 1/3 of the days you were present in the first year before the current year, and
   • 1/6 of the days you were present in the second year before the current year.

For purposes of the substantial presence test, the term "United States" includes all 50 states and the District of Columbia, territorial waters, and the seabed and subsoil of those submarine areas that are adjacent to U.S. territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources. The term does not include U.S. possessions and territories or U.S. airspace.

If one spouse is a nonresident alien and the other is a resident alien or a U.S. citizen, the nonresident alien can choose to be treated as U.S. resident alien. and file joint return. A nonresident alien can elect taxation as a U.S. resident for the whole year if all of the following apply:

• He or she is married;
• His or her spouse is a U.S. citizen or a resident alien on the last day of the tax year;
• He or she files a joint return for the year of the election using form 1040, 1040A or 1040EZ.

If you become a U.S. resident, you stay a resident until you leave the United States,

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