Nonresident Alien Tax in the US: Who Must File and What Gets Taxed
In this guide
Quick answer: Nonresident alien tax in the US works in two buckets. Income tied to a US trade or business is taxed at the same graduated rates as citizens and residents, after deductions. Other US-source income, such as certain passive payments, is taxed at a flat 30 percent (or a lower treaty rate) with no deductions. You must file if you ran a US trade or business, or if your US tax was not fully settled by withholding.
If you are a student, a short-term worker, or someone with a rental property or investment in the US, you may be a nonresident alien without knowing it. The word “alien” is just the IRS’s term for a non-citizen. Whether you fall on this side of the line depends on the residency tests, which we cover in our substantial presence test guide. This article explains what happens once you are a nonresident.
Who counts as a nonresident alien?
The IRS treats non-citizens as nonresidents unless they meet the green card test or the substantial presence test in the calendar year. Because the default is “nonresident”, most visitors and many new arrivals start here.
Who must file a US tax return as a nonresident alien?
According to the IRS, you must file if any of these apply:
- You were engaged, or are considered engaged, in a US trade or business during the year.
- You had US income whose tax was not fully satisfied by withholding at the source, even without a US business.
- You want to claim a refund of excess withholding, or claim deductions or credits. The IRS example is rental income you choose to treat as connected to a US trade or business.
What are the two kinds of income?
| Effectively connected income (ECI) | FDAP income | |
|---|---|---|
| What it is | Income tied to a US trade or business | US-source income that is fixed, determinable, annual or periodical and not effectively connected |
| How it is taxed | Graduated rates, after allowable deductions | Flat 30 percent, or a lower treaty rate |
| Deductions | Allowed | Not allowed |
| Where it is reported | Page one of Form 1040-NR | Schedule NEC (Form 1040-NR) |
You can have both types in the same year, and each is taxed under its own rules.
How does a tax treaty change this?
The 30 percent rate can drop if a treaty applies to you. We explain the mechanics in US tax treaty benefits explained. The IRS tax-treaty guidance says to read the specific treaty articles to see whether you qualify.
What is the spouse election?
If you are a nonresident alien at the end of the year and your spouse is a resident alien, your spouse can choose to treat you as a resident alien. You would then file Form 1040 as married filing jointly. This is a choice, so compare outcomes before you make it.
What if you arrive or leave mid-year?
A person can be both nonresident and resident in the same year, usually the year they arrive in or leave the US. That is a dual-status year, and the IRS says such a person must file a dual-status return.
Common mistakes
- Assuming no filing is needed because tax was withheld. Withholding only settles the tax if it fully covers what you owe.
- Treating all income the same. ECI and FDAP follow different rules.
- Skipping the residency tests and guessing your status.
- Not getting the right taxpayer number. See SSN vs ITIN.
Frequently asked questions
Is Form 1040-NR the nonresident return?
The IRS pages we checked refer to reporting ECI on page one of Form 1040-NR and FDAP on Schedule NEC of that form.
Can I deduct expenses against all my US income?
Not against FDAP income. Deductions are allowed against effectively connected income only.
Do students have different rules?
Students can have exempt-individual days and special payroll tax rules. Read FICA tax for international students.
Key takeaways
- Non-citizens are nonresidents by default unless they pass a residency test.
- ECI is taxed at graduated rates; FDAP at a flat 30 percent or a treaty rate.
- File if you ran a US business or if withholding did not settle your tax.
Related guides
- The substantial presence test
- US tax treaty benefits
- FICA tax for international students
- Foreign earned income exclusion
- SSN vs ITIN
This page is general information, not tax or legal advice. Confirm your position with the IRS or a qualified adviser. Last updated: October 2026.
Sources
- IRS: Nonresident Aliens
- IRS: Taxation of Nonresident Aliens
- IRS: Determining an Individual’s Tax Residency Status
- IRS: Dual-Status Aliens