If you’re a non-U.S. individual earning U.S.-sourced income, you may need to file Form 1040-NR with the IRS. This form is specifically designed for foreign persons with U.S. income and differs in key ways from the standard Form 1040 used by U.S. citizens and residents.
What Is Form 1040-NR?
Form 1040-NR is the "U.S. Nonresident Alien Income Tax Return." It is used to report income that is effectively connected with a U.S. trade or business, as well as certain types of fixed or passive income from U.S. sources.
What Information Does Form 1040-NR Include?
- Personal identification and address (foreign and U.S., if any)
- U.S. income and expenses
- Treaty benefits (if applicable)
- Withheld taxes and refundable credits
Who Needs to File Form 1040-NR?
You must file Form 1040-NR if you are a nonresident alien and:
- You had U.S.-sourced income during the year that was not fully exempt by a tax treaty
- You were engaged in a U.S. trade or business
- You are a partner in a U.S. partnership
- You received U.S. rental income or sold U.S. real estate
Even if you had no income, you may still be required to file in some partnership or investment scenarios.
What Counts as Effectively Connected Income (ECI)?
ECI includes income derived from active business or trade within the United States. Examples:
- Services performed while physically in the U.S.
- U.S. rental or real estate income
- Partnership income from a U.S. business
Note: Simply selling to U.S. customers does not always mean your income is ECI. You must have a fixed place of business, agents, or employees operating in the U.S. for income to be considered effectively connected.
Can I File Jointly with My Spouse on a 1040-NR?
Form 1040-NR is an individual return. Joint filing is generally not allowed for nonresident aliens. However, if one spouse is a U.S. person or elects to be treated as a resident, limited exceptions may apply.
Dependents such as children can be listed, but deductions and credits are limited compared to Form 1040.
What Is an ITIN and Why Do I Need One?
An Individual Taxpayer Identification Number (ITIN) is required for any nonresident who must file a U.S. tax return but is not eligible for a Social Security Number (SSN).
Why You Need an ITIN:
- To file Form 1040-NR
- To claim treaty benefits or refunds
- To file forms like W-8BEN or Form 8805
How to Get an ITIN:
You can apply for an ITIN by submitting IRS Form W-7 along with your 1040-NR. To simplify the process, you can use a Certified Acceptance Agent (CAA). We recommend our trusted partner for fast and reliable ITIN service: Apply for an ITIN Here
1040-NR vs. 1040: What’s the Difference?
- Form 1040 is for U.S. citizens and residents
- Form 1040-NR is for nonresident aliens
Form 1040 allows full standard deductions and joint filing. Form 1040-NR has more limited deductions, does not allow joint filing (except in rare cases), and is stricter on what income must be reported.
Due Date
The 1040-NR is due April 15 if you earned wages in the U.S., or June 15 if you had no wages but other types of income. You can request an extension using Form 4868.
Common Mistakes
- Using Form 1040 instead of 1040-NR
- Not reporting all ECI correctly
- Ignoring tax treaty benefits
- Filing late or not at all
When Form 1040-NR is Often Paired With Other Filings
- Form 8805 (foreign partner reporting)
- Form W-8BEN (to claim treaty benefits and avoid withholding)
- Form 8843 (for certain visa holders, like students and researchers)
Why You Should Work With a Tax Professional
U.S. tax rules for nonresidents can be complex. At Bookmate, we help global founders and freelancers stay compliant and maximize their tax treaty benefits.
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Every tax situation is different. Talk to a Bookmate expert to make sure you file the right form the right way.
