If you are an Indian citizen living, studying, or working in the United States, tax season can feel confusing. Terms like nonresident alien, Form 1040‑NR, ECI, or FDAP income often create unnecessary panic during tax filing for NRIs in US.
US tax filing can indeed be one of the most confusing and stressful parts of living in the United States as an NRI. Rules change based on visa status, income type, and duration of stay.
Even a small mistake, like filing the wrong form or missing a deadline, can result in lost refunds, IRS notices, or future compliance issues. Many NRIs only realize something is wrong when it’s already too late, like during visa renewals, green card applications, or when penalties start adding up.
This blog by SBNRI is written in simple language, specifically for NRIs in the US.
It breaks down US tax filing for nonresidents in simple language, helps you understand whether you need to file taxes, which form applies to you, how your income is taxed, deadlines, and what mistakes to avoid.
So that you can decide confidently whether to file on your own or get expert help before it becomes costly.
Who Is an NRI (Nonresident Alien) for US Tax Purposes?
In US tax law, what Indians commonly call NRIs are usually treated as nonresident aliens.
You are considered a nonresident alien if all of the following apply:
- You are not a US citizen or US national
- You do not hold a Green Card, and
- You do not pass the Substantial Presence Test (based on days spent in the US over the last 3 years)
Most students, first‑time workers, interns, researchers, and professionals on temporary visas (F‑1, J‑1, H‑1B, L‑1, etc.) fall into this category.
Are NRIs Required to File Income Tax Return in the US?
Yes, many NRIs are required to file a US tax return, even if they:
- Earned income for only a few months
- Had tax already deducted from salary
- Are leaving or have already left the US
You must file if:
- You were engaged in a US trade or business at any time during the year (this includes employment)
- You earned US‑source income where tax was not fully withheld
- You are on F, J, M, or Q visa and earned taxable income such as wages, stipends, or scholarships
- You are filing on behalf of a nonresident individual or estate
Why Should You File Even If You Think You Don’t Have To?
Many NRIs skip filing because they think: “My employer already deducted tax”
That can be a costly mistake.
You should file to:
- Claim a tax refund (very common for students and first‑year workers)
- Claim deductions or treaty benefits
- Stay compliant for future visa, Green Card, or citizenship applications
Important: To claim deductions or credits, you must file a correct and complete return within 16 months of the original due date. Missing this window can permanently block refunds.
Types of Income for Nonresident Aliens (NRIs)
US tax law divides NRI income into two main categories:
1. Effectively Connected Income (ECI)
This is income connected to a US trade or business, such as:
- Salary or wages
- Internship or part‑time income
- Freelance or consulting income in the US
How it is taxed:
- Taxed at graduated tax rates (same slabs as US residents)
- Deductions are allowed
- Reported on Page 1 of Form 1040‑NR
2. FDAP Income (Fixed, Determinable, Annual, or Periodical)
This includes passive US‑source income, such as:
- Interest or dividends
- Rental income
- Royalties
How it is taxed:
- Flat 30% tax, unless reduced by a tax treaty
- No deductions allowed
- Reported on Schedule NEC of Form 1040‑NR
Which Tax Form Should NRIs Use?
Most NRIs in the US must file:
Form 1040‑NR
US Nonresident Alien Income Tax Return
This is different from the regular Form 1040 used by US citizens and residents.
If you are filing from India or outside the US, yes – you can still file US tax returns from India using approved e‑filing software or paper filing.
US Tax Filing Deadlines for NRIs
Deadlines depend on your employment status:
April 15
If you:
- Received wages subject to withholding, or
- Had a place of business in the US
June 15
If you:
- Did not receive wages subject to withholding, and
- Do not have a US office or business
Extensions
You can request an automatic extension using Form 4868, but remember:
- Extension is for filing, not payment
- Interest may still apply on unpaid tax
Special Situations NRIs Should Know About
Married NRIs
- Married nonresident aliens usually file separately
- Joint filing is allowed only if one spouse is a US citizen or resident alien
Leaving the US (Sailing Permit)
Before permanently leaving the US, many nonresident aliens must obtain a Sailing Permit by filing:
- Form 1040‑C or
- Form 2063
This does not replace your final annual tax return.
No SSN? You Need an ITIN
If you are not eligible for a Social Security Number, apply for an ITIN using Form W‑7.
Final Thoughts
US tax filing for NRIs does not have to be overwhelming. Once you understand your residency status, income type, and correct form, the process becomes much simpler.
Filing correctly and on time helps you:
- Get refunds you deserve
- Avoid penalties
- Stay compliant for future US immigration and financial processes
If you’re unsure, it’s always wise to consult a tax professional experienced in NRI and nonresident alien taxation.
