IRS Instruction 1040-NR – IRS Forms, Instructions, Pubs 2026 – If you’re a nonresident alien with income connected to the United States, navigating tax obligations can feel overwhelming. The IRS Form 1040-NR is specifically designed for nonresident aliens to report U.S.-sourced income and claim applicable deductions, credits, and treaty benefits. This comprehensive guide breaks down the key elements of the IRS Instructions for Form 1040-NR for tax year 2025, helping you understand who must file, how to complete the form, filing deadlines, and more. Whether you’re an international student, foreign worker, or investor, staying compliant is crucial to avoid penalties.
We’ll cover the latest updates based on official IRS guidance, ensuring you have accurate, up-to-date information for your 2025 tax return, which is due in 2026. For the full details, you can download the official IRS Instructions for Form 1040-NR PDF directly from the IRS website: https://www.irs.gov/pub/irs-pdf/i1040nr.pdf.
What’s New in the 2025 IRS Form 1040-NR Instructions?
The IRS regularly updates Form 1040-NR to reflect new legislation and tax changes. For tax year 2025, several notable updates include:
- Filing Deadlines: If your wages are subject to U.S. withholding, your return is due April 15, 2026. Otherwise, it’s June 15, 2026.
- New Deductions and Credits: Introduction of Schedule 1-A for deductions like no tax on tips, overtime pay, and an enhanced deduction for seniors. The state and local tax (SALT) deduction limit increases to $40,000 ($20,000 for married filing separately), with phase-outs starting at $500,000 adjusted gross income (AGI).
- Child Tax Credit (CTC) Enhancements: Permanently increased to $2,200 per qualifying child, with up to $1,700 as the additional child tax credit (ACTC). A valid Social Security Number (SSN) is required.
- Digital Assets Reporting: Brokers now report sales via Form 1099-DA. You must answer the digital asset question on the form, even if no transactions occurred.
- Higher Contribution Limits: Catch-up contributions for deferred compensation plans rise to $11,250 for those aged 60-63.
- Other Changes: New “Trump accounts” for children born between 2025-2029 with pilot contributions. Increased adoption credit up to $5,000 (refundable). Higher thresholds for Form 1099-K reporting ($20,000 and 200 transactions).
- Legislative Impact: Updates from the One Big Beautiful Bill Act (P.L. 119-21), enacted July 4, 2025. Check IRS.gov/OBBB for details.
These changes aim to simplify filing for nonresidents while incorporating recent tax reforms.
Who Must File Form 1040-NR?
Not every nonresident alien needs to file, but if you have U.S.-connected income, you’re likely required to. According to the instructions, you must file if:
- You were engaged in a U.S. trade or business during 2025, even if you had no income or if it’s treaty-exempt.
- You have U.S.-sourced income reported on Schedule NEC (Tax on Income Not Effectively Connected With a U.S. Trade or Business) where tax wasn’t fully withheld.
- You owe special taxes, such as alternative minimum tax (AMT), household employment taxes, or self-employment tax under a totalization agreement.
- You received distributions from a Health Savings Account (HSA) or Medical Savings Account (MSA).
- You need to reconcile advance premium tax credit (PTC) payments.
- You’re filing on behalf of a deceased nonresident, estate, or trust.
- You held investments in qualified opportunity funds or are a dual-resident electing nonresident status.
- You had income from U.S. real property dispositions treated as effectively connected.
Exceptions apply: For example, nonresident students or trainees under F, J, M, or Q visas with no taxable income don’t need to file. Similarly, if your only U.S. income is from a partnership fully withheld on Schedule NEC, filing may not be required. However, file if you’re eligible for a refund due to over-withholding or credits like the ACTC.
Eligibility for benefits like the CTC or credit for other dependents is limited to U.S. nationals or residents of Canada, Mexico, South Korea, or eligible Indian students under treaty provisions.
Filing Requirements and Status Options
Form 1040-NR is for calendar-year filers (ending December 31, 2025). Key requirements include:
- Identification: Provide a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Estates and trusts use an Employer Identification Number (EIN).
- Filing Status: Options are single, married filing separately (with limited exceptions for separated spouses or certain treaty residents), qualifying surviving spouse (restricted to specific countries), estate, or trust. Joint filing isn’t allowed.
- Dependents: Limited to U.S. nationals or residents of Canada/Mexico. Requires SSN/ITIN for credits.
- Dual-Status Taxpayers: If you were both a resident and nonresident in 2025, file a dual-status return. Use Form 1040 for the resident period and attach a Form 1040-NR statement (or vice versa).
Always attach Schedule OI (Other Information) to report residency, visa status, treaty claims, and more.
When and Where to File Your 1040-NR?
- Deadlines: April 15, 2026, for those with withheld wages; June 15, 2026, otherwise. Extensions are available via Form 4868, but payment is still due by the original deadline to avoid penalties.
- Mailing Addresses:
- Individuals without payment: Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215.
- With payment: Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303.
- Estates/trusts: Similar addresses in Kansas City, MO, or Charlotte, NC.
- E-Filing: Encouraged for faster processing and refunds. Use IRS-approved software or a tax professional.
For foreign addresses, use certified mail. Combat zone extensions may apply per Publication 3.
Step-by-Step: How to Fill Out Form 1040-NR
Filling out the form involves reporting only U.S.-sourced or effectively connected income. Round to whole dollars and use the provided Tax Table or worksheets.
- Personal Information: Enter name, address (foreign format allowed), SSN/ITIN, and filing status.
- Income Section: Report effectively connected income (e.g., wages on Line 1a from Form W-2). Treaty-exempt amounts go on Line 1k. Non-connected income (like dividends or interest) is on Schedule NEC.
- Deductions: Use Schedule A for itemized (e.g., state taxes up to $40,000, charitable contributions with limits). Eligible Indian students can claim a standard deduction.
- Tax Calculation: Compute using the Tax Table. Add any additional taxes from Schedule 2 (e.g., AMT, self-employment tax).
- Credits and Payments: Claim foreign tax credit (limited), withholding from Forms W-2/1042-S, and estimated payments.
- Refunds or Amount Due: Direct deposit refunds to a U.S. bank. Pay electronically via IRS.gov/Payments.
Attach required schedules and forms like 8833 for treaty positions or 8958 for community property allocations.
Key Schedules for Form 1040-NR
| Schedule | Purpose |
|---|---|
| Schedule OI | Mandatory; details residency, treaties, and U.S. days present. |
| Schedule NEC | For non-connected income taxed at 30% or treaty rates (e.g., dividends, pensions). |
| Schedule A | Itemized deductions like taxes, gifts, and losses. |
| Schedule 1 | Additional income (e.g., business, scholarships) and adjustments. |
| Schedule 1-A | New for 2025 deductions (tips, overtime, seniors). |
| Schedule 2 | Additional taxes (AMT, self-employment). |
| Schedule 3 | Nonrefundable credits (foreign tax). |
Estimated Tax Payments and Penalties
If you expect to owe $1,000 or more after withholding, make quarterly estimated payments using Form 1040-ES (NR). Deadlines: April 15, June 15, September 15, and January 15, 2026. Underpayment penalties apply if payments are less than 90% of your 2025 tax or 100% of your 2024 tax (110% if AGI > $150,000).
Other penalties include late filing (up to 25% of unpaid tax), accuracy-related issues, and failure to disclose treaty benefits ($1,000 per instance). Use Form 2210 to compute underpayment penalties.
Tips for Nonresident Aliens Filing Form 1040-NR
- Treaty Benefits: Claim exemptions or reduced rates on Schedule OI, Item L. Attach Form 8833 if required.
- Digital Assets and Scholarships: Report gains/losses fully. Scholarships may be taxable unless treaty-exempt.
- Refunds: Allow up to 6 months for processing withheld amounts from Form 1042-S.
- Professional Help: Consider a tax advisor familiar with international tax treaties (e.g., U.S.-India Article 21 for students).
- Resources: Visit IRS.gov/Form1040NR for forms, publications like Pub. 519 (U.S. Tax Guide for Aliens), and free filing options.
By following these instructions, you can ensure accurate filing and potentially maximize refunds or minimize liabilities. Remember, this guide is for informational purposes—consult the official IRS documents or a professional for personalized advice.
For the most current version, download the IRS Instructions for Form 1040-NR PDF: https://www.irs.gov/pub/irs-pdf/i1040nr.pdf. Stay updated via IRS.gov for any future developments.