IRS & Nonresident Tax Filing
A nonresident alien may be required to file a U.S. federal income tax return. It's important to establish his status as either a resident or nonresident alien, and to understand under what conditions he must file a U.S. tax return. Nonresident aliens file either form 1040NR or 1040NR-EZ.
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Nonresident Alien Status
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A nonresident alien is neither a U.S. citizen nor a resident alien. A resident alien passes either the green card test or the substantial presence test for the current year. Resident aliens and U.S. citizens are taxed on income earned abroad. Nonresident aliens are only taxed on income earned in the United States, as well as some types of income associated with business conducted there.
Green Card Test
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A resident alien is someone who has been approved as a Lawful Permanent Resident of the United States, meaning he may reside in the U.S. on a permanent basis as an immigrant. A resident alien is granted this permission via Form I-551, the alien registration card, also known as a green card. For tax purposes, a person is considered a resident alien if he is considered a Lawful Permanent Resident for any part of the year.
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Substantial Presence Test
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To be considered a resident alien, a person is required to have been present in the U.S. for at least 31 days in the current year. Additionally, he must have been physically present in the U.S. for 183 days during the period of time including the current year and the two preceding years. All of the days a person spent in the U.S. during the current year count toward the total. Only one-third of the days in the previous year and one-sixth of the days in the year before are included.
Nonresident Filing
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A nonresident is required by the IRS to file a return if he engaged in business in the U.S. for that tax year, regardless of whether any of his income came from U.S. sources, or even if his income is considered tax-exempt. Even if he didn't operate a business in the U.S., a nonresident alien must file a return claiming any income derived from a U.S. source. He must also file if he is an agent accountable for filing taxes for an individual meeting the above conditions, or is a fiduciary for the trust or estate of a nonresident alien.
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