Everything Non-Residents Need to Know About Filing US Taxes
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As an immigrant or non-resident of the United States, it’s normal to have many questions about filing your taxes. Why should you file? What forms do you need? How could this affect me? The list goes on and on.
Americans love to complain about filing their taxes — often with good reason. But the process isn’t nearly as complicated as it might seem, even for non-citizens.
Let’s go over some questions you might have about filing your federal income taxes and how it could impact your residency status (in a good way!). Below, we’ve included a list of common questions and answers, as well as some valuable resources to help you get started.
Do I need to file or e-file an income tax return if I’m not a US citizen?
Yes, you are legally obligated to pay federal taxes on any type of income earned in the United States, regardless of your resident status. This includes your regular salary, capital gains or losses, and any other U.S. source income.
You’ll also need to pay any state income tax on income earned in your state, if applicable.
Sometimes it’s easier to avoid paying taxes, like in instances where you’re being paid “under the table” in cash. But if your goal is to become a U.S. citizen eventually, a history of filing tax returns with the IRS could prove very beneficial for you. Paying taxes is one way immigrants can prove they have “good moral character,” one of the criteria for becoming a U.S. citizen.
Will filing taxes as a non-resident or undocumented worker negatively affect me?
Giving the IRS your personal information can be a scary thing, no matter what your residency status is. Thankfully, you have the right to privacy, and the IRS must legally adhere to strict data protection rules.
As a U.S. taxpayer, you are protected under the Right to Confidentiality, meaning the personal information in your tax return is entirely confidential. While there are a few exceptions, the IRS generally can’t share your personal information with a third party without your express permission, whether that be an individual or government entity.
And if you’re paying taxes as an undocumented worker, you’re not alone! According to a New American Economy study, over 10 million undocumented immigrants paid over $30 billion in federal, state, and local taxes in tax year 2019.
What tax forms do I need to fill out?
To figure out how to file your taxes as a non-resident individual, you first need to determine your tax status. The IRS groups non-U.S. citizens into two different categories with their own filing requirements:
- Resident alien: This means you either have a green card or you have resided in the U.S. long enough to pass the substantial presence test. Resident aliens are taxed just like U.S. citizens and use the same tax form (Form 1040). You still need to report any foreign source income you earned outside the country.
- Non-resident alien: This applies to temporary visa holders or undocumented workers who do not have a green card and don’t meet the substantial presence requirements. Non-resident filers should file a non-resident return using Form 1040-NR and are only required to report U.S. earned income.
What are the benefits of filing a tax return if I’m not a US resident?
While non-residents cannot claim Social Security benefits, there are still plenty of reasons why it can still be beneficial to file a tax return.
1. You could get a tax refund.
If you are an employee who has taxes withheld from your paycheck, you might have paid more taxes than what you owe, especially if you qualify for any tax credits (which we’ll get to in a minute). When you file your federal tax return, you’ll be able to reclaim any overpaid taxes as a tax refund.
2. You could qualify for the Child Tax Credit (CTC) or other tax credits.
If you have any children, you might be eligible to claim the Child Tax Credit, a very valuable tax break. This tax credit is even more valuable in 2021 — due to the pandemic, the maximum credit amount increased last year to $3,000 per child ages 6-17 and up to $3,600 for children ages 5 and under. The credit is also fully refundable for 2021, meaning you can claim the credit as a tax refund even if you don’t owe any tax for that calendar year.
Your child must have a Social Security number (SSN) to claim the Child Tax Credit. You, the taxpayer, don’t need a Social Security number to claim the credit, as long as you have an Individual Taxpayer Identification Number (if you don’t have one, we’ll talk about how to get one in the next section).
3. Filing a return shows you are willing to comply with federal tax laws and could help you when applying for citizenship.
As we noted earlier, filing your taxes can help you prove “good moral character” when applying for a green card or naturalization. Avoiding taxes can have the opposite effect and cause your application to be denied. If you plan on applying for a green card or citizenship in the future, it’s critical that you report any taxable income to the IRS.
How do I file my taxes if I don’t have a Social Security number?
If you don’t have a Social Security number or aren’t eligible to get one, the IRS can issue you an Individual Tax Identification Number (ITIN). To request an ITIN, you must fill out Form W-7 (en Español). You can also use this form to renew an expired ITIN. Allow up to 10 weeks for the IRS to process your form and assign you a number.
Don’t worry if you’re trying to file your tax return for the first time and don’t have an ITIN yet — you can file your Form W-7 application with your federal income tax return. Read more about how to apply for an ITIN.
I need help filing my taxes. What should I do?
If you can’t afford tax preparation, need a translator, or just need help filing your tax return, the IRS Volunteer Income Tax Assistance (VITA) program can assist you. To find a provider near you and check if you qualify, start by entering your zip code here.