Non-resident tax return filing in US tax law for 2024

In the United States, non-resident aliens (i.e., individuals who are not U.S. citizens or green card holders and do not meet the "substantial presence test") may be required to file a U.S. tax return depending on their income and activities. The filing rules for non-residents in 2024 are largely similar to those in previous years, but there may be some updates or clarifications.

Here’s an overview of the filing requirements for non-resident aliens under U.S. tax law for 2024:

1. Who is Considered a Non-Resident Alien?

• A non-resident alien is someone who is not a U.S. citizen, not a green card holder, and does not pass the substantial presence test (which generally requires being in the U.S. for at least 183 days over the past three years, counting the days in a weighted manner).
• Individuals on student visas (F, J, M, or Q) may qualify as non-residents under certain conditions even if they are in the U.S. for extended periods.

2. Required Forms for Non-Resident Aliens:

• Form 1040-NR: This is the primary form used by non-resident aliens to file a U.S. tax return. Non-residents will file this form to report income earned in the U.S., claim deductions, and figure out any taxes owed or refunds due.

?? You are required to file Form 1040-NR if you have U.S.-source income that is taxable, or if you are engaged in a trade or business in the U.S.

?? If you are married to a U.S. citizen or resident and elect to file jointly, you may be eligible to use Form 1040 instead, but that depends on your specific situation.

• Form 8843: Certain non-resident aliens, especially students and scholars in the U.S. on F, J, M, or Q visas, must file Form 8843 even if they have no income. This form is used to explain their non-resident status.

3. Income That Must Be Reported:

Non-resident aliens are taxed on U.S.-source income. This may include:

1)????? Wages earned in the U.S.

2)????? Interest and dividends from U.S. sources

3)????? Rents or income from U.S. real property

4)????? U.S.-source business income

5)????? Certain scholarships and fellowships (if taxable)

Income from foreign sources generally is not subject to U.S. tax, unless it is effectively connected to a U.S. trade or business.

4. Tax Treaties:

The U.S. has tax treaties with many countries that may reduce or eliminate tax on certain types of income for non-resident aliens. These treaties may affect the income tax rate on wages, pensions, or investment income. Non-resident aliens must review the relevant treaty between the U.S. and their home country to understand their eligibility for any exemptions or reduced rates.

• If you are eligible for tax treaty benefits, you may need to file Form 8833 to claim them.

5. Filing Deadlines:

• The typical deadline for filing Form 1040-NR is April 15 of the following year (April 15, 2025, for tax year 2024), but it can be extended to June 15 for non-residents who live outside the U.S. on the filing deadline.
• If a non-resident is engaged in a U.S. trade or business, or has income subject to U.S. tax withholding (e.g., from a U.S. employer), they must file their return by April 15, unless they qualify for an extension.

Extensions to file can be requested using Form 4868, which extends the filing deadline by six months (until October 15), but this only extends the time to file, not to pay any taxes owed.

6. Tax Rates for Non-Resident Aliens:

• Non-resident aliens are subject to graduated income tax rates for income effectively connected with a U.S. trade or business. These rates range from 10% to 37% in 2024, depending on the level of taxable income.
• For non-effectively connected income (such as interest or dividends), non-resident aliens are usually taxed at a flat 30% rate unless a tax treaty provides for a reduced rate.

7. Tax Withholding for Non-Residents:

• Non-resident aliens with U.S.-source income may have taxes withheld at the source. This applies to wages (which will have federal income tax withheld) and other types of income such as interest or dividends.
• Non-residents can file a tax return to reclaim excess withholding if too much has been withheld, or if tax treaty benefits reduce their actual tax liability.

8. Social Security and Medicare Taxes:

• Non-resident aliens working in the U.S. generally do not pay Social Security and Medicare taxes on wages, but this may depend on their specific visa status and country of origin.

9. State Taxes:

• In addition to federal taxes, non-resident aliens may be subject to state taxes, depending on the state where they reside or work. State tax rules vary significantly, so it's important to check the specific rules for each state.

Key Steps for Filing a Non-Resident Tax Return in 2024:

ü? Determine your filing status (whether you are required to file Form 1040-NR or other forms like Form 8843).

ü? Collect your income information (W-2 forms, 1099 forms, or records of other income from U.S. sources).

ü? Check any tax treaties that might affect your tax liability.

ü? Complete Form 1040-NR (and any other forms that may apply, such as Form 8833 for tax treaties).

ü? Submit the forms by the filing deadline (April 15 or June 15, depending on your situation).

If you are uncertain about your specific tax obligations, we are here to help you with our tax professionals team who specializes in non-resident tax issues.