REFERENCE
Nonresident alien: what the status means and how to keep it
"Nonresident alien" sounds like immigration jargon, but it is a tax status, and usually the one worth keeping: the US taxes a nonresident alien only on US-source income, while residents are taxed on everything worldwide. Whether you are one comes down to two tests, and for anyone without a green card, the deciding test is a day count.
Who is a nonresident alien
Any non-citizen who fails both residency tests: no green card (the green card test) and not enough US days to meet the Substantial Presence Test (at least 31 days this year and a weighted three-year total of 183). Visa type does not decide it, days do, though students and certain exchange visitors on F, J, M, or Q visas exclude "exempt individual" days for a limited number of years by filing Form 8843. The full comparison lives at resident alien vs. nonresident alien.
How nonresident aliens are taxed
- Effectively connected income (ECI): income from a US trade or business, including wages for work physically performed in the US, taxed at the same graduated rates residents pay, reported on Form 1040-NR with deductions allowed against it.
- US-source passive income (FDAP): dividends, certain interest, rents, royalties: a flat 30% tax, or a lower treaty rate, usually collected entirely by withholding, with no deductions.
- Foreign income: outside the US net. This is the entire point of the status: your non-US salary, business, and investments are not US-taxable while you remain a nonresident.
Withholding: how the tax actually gets collected
US payers are required to withhold on payments to NRAs: 30% (or the treaty rate you claim on Form W-8BEN) on FDAP income, and wage withholding with special NRA rules on US employment income. For many nonresidents with only US investment income, the withholding is the tax, and no return is due. Where withholding over- or under-shoots, Form 1040-NR settles the difference.
Keeping the status: the day-count problem
Nonresident status is lost by accumulating days: the weighted test reaches back three years, any part of a day generally counts, and the fallback protections, the Form 8840 closer connection exception and treaty tie-breakers, have their own day conditions (8840 requires under 183 actual days in the current year). Every route through this rests on knowing your US days precisely, per year. SpyglassBeacon counts them automatically, keeps the multi-year history the weighted formula needs, and exports a timestamped day-by-day record.
Frequently asked questions
What does nonresident alien mean in one sentence?
A non-citizen with no green card and not enough US days to meet the Substantial Presence Test, taxed by the US only on US-source income.
Do nonresident aliens file US tax returns?
Only when they have effectively connected income or tax not settled by withholding: Form 1040-NR. Exempt-day claimants file Form 8843 regardless.
What is the withholding rate for nonresident aliens?
Generally 30% on US-source passive income, reduced by treaty via Form W-8BEN; wages use graduated withholding with NRA adjustments.
How many US days can I spend and stay nonresident?
A steady ~120 days a year stays under the weighted test indefinitely; up to 182 actual days in a year can work with the Form 8840 closer-connection filing. Run your numbers on the SPT calculator.
Not tax advice. Treaties, ECI characterization, and exempt-day categories are fact-specific. Confirm your situation with a qualified adviser.
Sources: IRS, taxation of nonresident aliens; IRS, nonresident aliens.
Related: Resident vs. nonresident alien · The Substantial Presence Test · SPT calculator · Form 8840 calculator
The status runs on your day count
Beacon counts your US days automatically, across the three years the test reaches back.
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