Non-resident alien, what is your filing status?

  • by admin
  • December 14, 2020

You are not a Canadian resident, but some income from the sources in the United States and still wondering if you need to file an income tax return in the United States? Let’s try and understand your tax obligations in the United States.

 

Non-resident alien filing US tax return 1040NR

One thing is clear that if if you are a U.S. citizen then your filing status is “resident” for tax purposes, no matter where you live in this world. If you are not a U.S. citizen, then your filing status will be determined based on the substantial presence test in the United States or Green Card test and certain other factors. Please visit the “non-resident alien test” to determine your residency status. If both of these situations do not apply to you then you will be considered as a “non-resident” alien. Non-resident filing staus in a tax year only apply to a person who is not a citizen of the United States and he/she is not considered a resident for tax purposes in the year of filing.

You are a non-resident alien then you need not file an income tax return in the United States. That’s not always true. What if you have income effectively connected with a trade or business in the United States. You may need to file a US tax return if you have income from the sources in the United States, where you were engaged in a trade or business in the United States, or You invested in a qualified opportunity fund. For example, you as a Canadian Citizen went on vacation in Florida for a week and bought a vacation house there which later you rented out. Since you were present in the U.S. only 7 days in the tax year, assuming other test does not apply to you, you will be considered as a non-resident alien for tax purposes in the United States. But now you have rental income that is effectively connected with a property in Florida, you need to file an income tax return in the USA.

Your income taxes payable also depends on your filing status. If you are a non-resident alien filing Form 1040-NR, you may be able to use one of the filing statuses discussed below.

Single

If you are single, your filing status should be “single”.

Married Filing Jointly

Generally, this filing status depends on your residency status. If you or your spouse both are considered non-resident then you cannot file as a married filing jointly. This also applies when only one spouse is considered a non-resident alien. If either you or your spouse was a non-resident alien at any time during the tax year, you cannot file under the status as married filing jointly. However, the spouse of a U.S. citizen or a resident alien has a choice. A spouse who is a non-resident alien but married to a U.S. citizen or a resident alien can choose to be treated as U.S. residents and file joint returns under the status of married filing jointly. While choosing this status you need to attach a statement with your tax return. Looking into this scenario carefully, you need to note that a non-resident alien spouse of a U.S. citizen or resident alien need not file a tax return in the United States.

Married Non-resident Aliens Filing Separately

If you are a married nonresident alien, and your spouse is not a U.S. citizen or resident, you will file your U.S. tax return under the status of married filing separate return. The tax rate that applies to you. is the Tax Rate Schedule for married filing separate returns. These tax rates will be used to determine the income tax on your income effectively connected with a U.S. trade or business. You normally cannot use the Tax Table column or the Tax Rate Schedule for single individuals.

Qualifying Widow(er)

Eligibility to file as a qualifying widow(er) and can use income tax rate for the joint return if:

  • You were a resident of Mexico, Canada, South Korea, or were a U.S. national,
  • Your spouse died during one of the two prior tax years, and you have not remarried before the end of the current year, and
  • You have a dependent child living with you.

Head of Household

You cannot file as head of household if you are a non-resident alien at any time during the tax year.

Disclaimer: Information in the blog/post/article has been presented for a broad and simple understanding. This is not legal advice. RKB Accounting & Tax Services does not accept any liability for its application in any real situations. You need to contact your accountant or us for further information.

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