TurboTax / Tax Calculators & Tips / All Tax Guides / General Tax Tips / Video: Tax Guide for Resident and Non Resident Aliens

Video: Tax Guide for Resident and Non Resident Aliens

Updated for Tax Year 2015


OVERVIEW

Have you recently moved to the United States from a foreign country or just spend a lot of time there? If so, you may want to know about some of the federal income tax rules that you might be subject to.


Hello, I’m Tammy from TurboTax with some information about the income tax filing obligations of resident and non-resident aliens.

Have you recently moved to the United States from a foreign country or just spend a lot of time there? If so, you may want to know about some of the federal income tax rules that you might be subject to.

For federal income tax purposes, the IRS treats resident aliens in the same way it does citizens. This means that as a resident alien, you must file an annual tax return and report all income you receive—regardless of whether you earn it in the U.S. or abroad. The IRS will treat you as a resident if you are lawfully residing in the U.S.—meaning you have an alien registration card, which is more commonly known as the green card. However, even if you don’t possess a green card, you are still considered a resident if you are physically present in the U.S. for at least 31 days in the current year and for a total of 183 days over the last three years. The calculation for the 183 days requirement is tricky. We recommend visiting IRS.gov for the details.

If you don’t have a green card and aren’t physically present in the U.S. for a sufficient number of days, you are considered a nonresident alien—but this doesn’t mean you are exempt from U.S. tax. As a non-resident, you must prepare a U.S. tax return on Form 1040NR or 1040NR-EZ. But unlike resident aliens, you only report the income you earn that comes from the U.S. For example, if you are self-employed, in the U.S., and provide services to a U.S. company for a 30-day period, your earnings during those 30 days are subject to U.S. income tax. However, the money you earn in other countries during the other 335 days isn’t taxable. It is also possible to be both a non-resident and resident in the same year—which the IRS refers to as dual status. This occurs when you live in the U.S. for the entire year, but don’t receive your green card or become a resident based on the number of days in the U.S., until sometime after January 1st of the next year. In this case, you can file on a 1040 form, but for the period you are a non-resident, you only pay tax on the income you earn that relates to the U.S. Therefore, you need to provide the IRS with a document that shows how you are allocating your income between the two periods.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99*
Start for Free

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.


Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Filing Deadline: IRS filing deadline for tax year 2015 is April 18, 2016 (except for residents of Massachusetts or Maine, where the IRS filing deadline for tax year 2015 is April 19, 2016).
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $X.XX Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except the TurboTax Home & Business/QuickBooks Self-Employed bundle offers.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.