Nonresident alien

What is a nonresident alien?

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.

Deeper definition

The U.S. requires everyone who earns an income win the U.S. to pay taxes on that income, including foreign nationals. As such, the IRS classifies foreign nationals as resident or nonresident aliens.

To classify taxpayers as nonresident aliens, the IRS calculates how much time they spend in the U.S. Those who do not have or qualify for a green card, or who have been in the U.S. fewer than 31 days in the calendar year and 183 days during the last three years file tax returns as nonresident aliens.

An exception to this rule is a foreign national married to a U.S. citizen or permanent resident, who may file with a spouse as “married filing jointly.”

Unlike resident aliens, who follow the same tax rules as U.S. citizens, nonresident aliens only pay taxes on the income they earn in the U.S., as long as it exceeds the annual personal exemption amount. For the 2017 tax year, the personal exemption was $4,050, so nonresident aliens who earned less than that amount do not have to file a tax return, unless they want to claim an available refund.

Nonresident aliens use form 1040NR or 1040NR-EZ to file taxes, and can file under an individual taxpayer identification number instead of a Social Security number if they do not qualify for a Social Security number.

Nonresident alien example

One example of a nonresident alien is a visiting professor from another country who teaches a class at a university for a semester. If the professor arrives for the first time in the U.S. before the start of the term in August and leaves at the end of the term in December, the person does not meet the substantial presence test.

However, the tax status changes, if the professor decides to return each year to teach the class. After three years, this person accumulates more than 183 days in the U.S. and meets the criteria for a resident alien tax status.

Are you a nonresident alien and want to estimate your taxes for next year? Use Bankrate’s 1040 tax estimator calculator to see what you may owe the IRS.