1. Non-Resident Test

An alien is any individuals who is not a US citizen or US national. A non-resident alien is an alien who has not passed the green card test or the substantial presence test.

Green Card Test:

You are a Lawful Permanent Resident of the United States at any time during the calender year.

Substanital Presence Test:

You are physically present in the United States on at least:
  1. 31 days during the current years, and
  2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that
    Current year All days
    Current year - 1 year 1/3 days
    Current year - 2 year 1/6 days
    183 < Total days

2. Who must file?

  • A nonresident alien individual engaged or considered to be engaged in a trade or business in the United state during the year
  • A nonresident alien individual who is not engaged in a trade or business in the United States and has US income on which the tax liability was not satisfied by the withholding of tax at the sources
  • a representative or agent responsible for filing the return of an individual described I or 2
  • a fiduciary for nonresident alien estate or trust, or
  • a resident or domestic fidicary or other person, charged with the care of the person or property of a nonresident individual may be required to file an income tax return for that individual and pay the tax

3. When to file?

Due Date Date to File Extension Extension Due Date
Employee or SE-Employed Person April 15 April 15 October 15
Not Employee or SE-Employed Person June 15 June 15 December 15

4. Which Income to Report?

  • Income that is Effectively Connected with a trade or business in the United State
  • US source income that is fixed, determinable, annual, or periodical (FDAP)
    • Tax at a 30% (or lwer treaty) rate applieds to FDAP income or gain from US sources, but only if they are not effectively connected with your US Trade or business.
    • Example of FDAP Income
      1. Compensation for personal services
      2. Pensions and Annuities
      3. Scholarships and fellowship grand
      4. Dividends
      5. Interest
      6. Alimony
      7. Real property tincome
      8. Orginal issue Discounts
      9. Royalties
      10. Other grants, prizes and awards
      11. A sales commission paid or credited monthly
      12. A commission paid for a single transaction
    • Reference:

5. Reporting Tax

  • Effectively Connected Income, after allowable deductions, is taxed at graduated rates. These are the same rates that apply to U.S. Citizens and residents. Reported on page 1 of Form 1040NR
  • Fixed, Determinable, Annual, or Periodical (FDAP) income is taxed at a flat 30% rate (or lower treaty rate, if qualify) and no deductions are allowed against such income. Reported on page 4 of 1040 NR

6. Apply ITIN

steps to apply for ITIN
ITIN image
  • What is an ITIN?

    An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the IRS.
  • Who needs an ITIN?

    • A nonresident alien required to file a U.S. tax return
    • A U.S. resident alien (based on days present in the United States) filing a U.S. tax return
    • A dependent or spouse of a U.S. citizen/resident alien
    • A dependent or spouse of a nonresident alien visa holder
  • How do I know if I need an ITIN?

    if you do not have a SSN and are not eligible to obtian a SSN, but you have a requirements to furnish a federal tax identification number or file a federal income tax returns, you must apply for an ITIN.
  • How do I apply for an ITIN?

    1. Mail out package
      • Application Form
      • Attached Deferal Income Tax Return
      • Original Proof of Identity or Copies Certified by Issuing Agency

      Mail above to:
      Internal Revenue Service
      Austin Service Center
      ITIN Operation
      P.O. Box 149342
      Austin, TX 78714-9342

    2. Apply through IRS authorized acceptance agent
    3. Taxpayer assistance centers (TACS) also provide in-person help with ITIN aplications on a walk-in or appointment basis
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