Nonresident aliens who are required to file an income tax return must use: Form 1040-NR, U.S. Nonresident Alien Income Tax Return or, Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents, if qualified. Refer to the Instructions for Form 1040NR-EZ to determine if you qualify.

Do nonresident aliens tax differently from resident aliens?

The distinction matters, because resident aliens declare and pay taxes on worldwide income (similar to US Citizens), while nonresidents only have to report and pay taxes on income earned in the US.

What income is a resident alien required to report on his US income tax return?

If you are a U.S. resident alien, you must report all interest, dividends, wages, or other compensation for services, income from rental property or royalties, and other types of income on your U.S. tax return. You must report these amounts whether they are earned within or outside the United States.

What is nonresident alien tax status?

A nonresident alien is a person who is not a U.S. citizen and does not pass the green card or substantial presence tests used to determine tax status. Nonresident aliens must pay taxes on income they earn in the U.S.

How are nonresident aliens taxed in the US?

Nonresident aliens are normally taxed only on income derived from US sources. US-source income that is considered “effectively connected” with a US trade or business, such as salary and other forms of compensation, is taxed at graduated rates.

Do you have to file Form 1040NR for nonresident aliens?

You must file 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) only if you have income that is subject to tax, such as wages, tips, scholarship and fellowship grants, dividends, etc.

Do you have to pay income tax if you are a nonresident?

Nonresident aliens are required to pay income tax only on income that is earned in the U.S. or earned from a U.S. source.   They do not have to pay tax on foreign-earned income.

How are resident aliens different from nonresident aliens?

Unlike nonresident aliens, resident aliens are taxed on all forms of income received, whether foreign or domestic, including any payments received from a pension from a foreign government. 4  Resident aliens may claim the foreign earned income exclusion and/or the foreign tax credit if they qualify.