Nonresident Alien – Figuring Your Tax
If you are a nonresident alien (any temporary visa holder including F1 student) filing Form 1040NR, you may be able to use one of the filing statuses discussed below. If you are filing Form 1040NR-EZ, you can only claim “Single nonresident alien” or “Married nonresident alien” as your filing status.
** International Students can allow themselves to treat as Non Resident for 5 years (by passing the substantial presence test). If you filled your return electronically (i.e. not in printed paper) as F1 Student in previous years then you are not non-resident for Tax Purpose. This article will not be applicable for such visa holders and International Students.
Married Filing Jointly
Generally, you cannot file as married filing jointly if either spouse was a nonresident alien at any time during the tax year. However, nonresident aliens married to U.S. citizens or residents can choose to be treated as U.S. residents and file joint returns. For more information on these choices, refer to Nonresident Spouse Treated as a Resident.
You may be eligible to file as a qualifying widow(er) and use the joint return tax rates if:
- You were a resident of Canada, Mexico, South Korea, or were a U.S. national,
- Your spouse died in the prior tax year or the current tax year and you have not remarried, and
- You have a dependent child living with you
Note: See the Instructions for Form 1040NR for the rules for filing as a qualifying widow(er) with a dependent child.
Head of Household
You cannot file as head of household if you are a nonresident alien at any time during the tax year.
Married Nonresident Aliens Filing Separately
If you are married nonresident alien, but your spouse is not a U.S. citizen or residents, you must use the Tax Table column or the Tax Rate Schedule for married filing separate returns when determining the tax on income effectively connected with a U.S. trade or business. You normally cannot use the Tax Table column or the Tax Rate Schedule for single individuals.
If you are a nonresident alien, you cannot claim the standard deduction. However, students and business apprentices from India may be eligible to claim the standard deduction under Article 21 of the U.S.A.-India Income Tax Treaty. Refer to Publication 519, U.S. Tax Guide for Aliens and to Revenue Procedure 93-20 for more information.
You can claim deductions to figure your effectively connected taxable income (shown on page 1 of Form 1040NR). You generally cannot claim deductions related to income that is not connected with your U.S. business activities (shown on page 4 of Form 1040NR). Except for personal exemptions, and certain itemized deductions, you can claim deductions only to the extent they are connected with your effectively connected income.
Nonresident aliens can deduct certain itemized deductions if they receive income effectively connected with their U.S. trade or business. These deductions include:
- State and local income taxes,
- Charitable contributions to U.S. non-profit organizations,
- Casualty and theft losses,
- Miscellaneous itemized deductions, and
- The ordinary and necessary expenses related to a U.S. trade or business.
Use Schedule A of Form 1040NR to claim itemized deductions. If you are filing Form 1040NR-EZ, you can only claim a deduction for state or local income taxes. If you are claiming any other deduction, you must file Form 1040NR. For a discussion about certain itemized deductions refer to IRS Publication 519.
Generally, if you are a nonresident alien engaged in a trade or business in the United States, you can claim only one personal exemption. You may be able to claim an exemption for a spouse and a dependent if you are described in any of the following categories.
- If you are a resident of Mexico or Canada or a national of the United States, you can also claim a personal exemption for your spouse if your spouse had no gross income for U.S. tax purposes and was not the dependent of another taxpayer. In addition, you can claim exemptions for your dependents who meet certain tests. Residents of Mexico, Canada, or nationals of the United States must use the same rules as U.S. citizens to determine who is a dependent and for which dependents exemptions can be claimed. See Publication 501, Exemptions, Standard Deduction, and Filing Information, for these rules.
- Pursuant to tax treaties certain residents of South Korea and certain students and business apprentices from India may be able to claim exemptions for their spouse and dependents. Refer to IRS Publication 519 and to Revenue Procedure 93-20 for details.
For a further discussion refer also to Aliens–How Many Exemptions Can Be Claimed?
Adjustments to Gross Income
Nonresident aliens may claim the following adjustments to gross income if they meet the qualifications for each adjustment:
- IRA Deduction
- Archer MSA Deduction
- Health Savings Account Deduction (see the Instructions for Form 8889)
- Student Loan Interest Deduction
- Moving Expenses
- Self-Employed Health Insurance Deduction
- Self-Employed SEP, SIMPLE, and Qualified Plans
- Penalty for early withdrawal of Savings
- Scholarship and Fellowship Grants excluded from income
- Domestic Production Activities Deduction (see the Instructions for Form 8903)
Education and Earned Income Credits
If you are a nonresident alien for any part of the year, you generally cannot claim the Earned Income Tax Credit, the Hope Credit, or the Lifetime Learning Credit. However, you may claim an adjustment for the student loan interest deduction. Refer to IRS Publication 519 for details.
Nonresident aliens are not liable to pay self-employment tax.
(Content Credit – IRS.gov)