IRS Publication 519: U.S. Tax Guide for Aliens

IRS Publication 519 explains U.S. federal tax rules for noncitizens. The publication defines tax residency, explains how different types of income are taxed, and identifies filing requirements and options that affect aliens (noncitizens) in the United States.

Key points

• Tax treatment depends on whether you are a resident alien, nonresident alien, or dual-status alien.
• Resident aliens are taxed like U.S. citizens on worldwide income.
• Nonresident aliens are taxed only on certain U.S.-source income; taxation varies by income type.
• Nonresident aliens generally file Form 1040-NR.
• Tax treaties may change U.S. tax obligations.

Determining tax status

Tax rules, withholding, deductions, and filing depend on your tax residency, determined mainly by two tests:

Substantial presence test

You are a resident for tax purposes if you meet both:
* At least 31 days physically present in the current year, and
* 183 days total using the weighted three-year formula:
* all days present in the current year, plus
* one-third of days present in the year before, plus
* one-sixth of days present in the second year before.

Certain days may be excluded (for example, some days for students, teachers, or medical conditions) — consult IRS guidance for exceptions.

Green card test

You are a resident for tax purposes if you are a Lawful Permanent Resident (hold a green card) at any time during the calendar year.

Dual-status and spouse election

• Dual-status: If you qualify as both resident and nonresident in the same year, you have dual-status for that year with special filing rules.
• Married couples may be able to elect to treat a nonresident spouse as a resident for the entire year, which can affect filing status and tax treatment.

Taxation of resident vs nonresident aliens

• Resident aliens: taxed on worldwide income and file like U.S. citizens (use Form 1040 series).
• Nonresident aliens: taxed only on U.S.-source income and certain effectively connected income.

Types of U.S. income for nonresident aliens

Nonresident income generally falls into two categories:

• Effectively Connected Income (ECI)
• Income connected with a U.S. trade or business (wages, business income, etc.).
• Taxed at the graduated U.S. individual income tax rates (same brackets as residents for that income).
• Fixed or Determinable Annual or Periodic (FDAP) Income
• Passive income such as interest, dividends, rents, royalties, and certain pensions.
• Generally subject to a flat 30% withholding tax (may be reduced by tax treaties or statutory exceptions).

Filing

• Nonresident aliens typically file Form 1040-NR (U.S. Nonresident Alien Income Tax Return).
• Required supporting forms and schedules depend on income types, deductions, and elections (e.g., treaty claims).

Tax treaties and relief

Tax treaties between the U.S. and other countries can reduce or eliminate U.S. tax on certain types of income (personal services, pensions, interest, dividends, royalties, capital gains). Treaty benefits often require a claim on the tax return and sometimes withholding documents provided to payers.

Practical takeaways

• First determine your tax residency using the substantial presence test and green card test.
• If resident, report worldwide income and follow resident filing rules.
• If nonresident, identify which income is ECI versus FDAP to determine tax rates and withholding.
• Check for tax treaty provisions that may reduce U.S. tax.
• Use Form 1040-NR if you are a nonresident alien unless another form or election applies.

For specific situations, exceptions, exclusions, and procedures (exempt days, filing deadlines, claiming treaty benefits, and dual-status filing rules), consult the official IRS guidance on Publication 519 and related IRS forms and instructions.