Best Tax Tips for Foreign Nationals in the U.S. (2026)

Updated September 2026

The most important tax step for a foreign national in the U.S. is working out whether you are a resident alien or a nonresident alien for tax purposes, because that decides which return you file, which income is taxed and which forms you owe. Your immigration status alone does not answer it; the green card test and the substantial presence test do. The tips below follow the order most people meet these rules, from arrival to departure, and each is drawn from current IRS guidance.

1. 1

   Work out your residency status first

   Per IRS.gov, a non-citizen is a nonresident alien unless they meet the green card test (holding lawful permanent resident status) or the substantial presence test. You meet the second test if you were physically present in the U.S. at least 31 days in the current year and 183 days over three years, counting all days this year, one-third of last year’s days and one-sixth of the days from the year before.

   Some days don’t count, including days commuting from Canada or Mexico and transit stops under 24 hours. Run the count every year; status can change as your stay lengthens.

2. 2

   Claim exempt-individual days with Form 8843

   Students on F, J, M or Q visas who substantially comply with their visa terms, and teachers and trainees on J or Q visas, can exclude their days of presence from the substantial presence test, per IRS.gov. To do so you file Form 8843. Per the 2025 Form 8843 instructions, attach it to Form 1040-NR if you file one; if you don’t have to file a return, mail it on its own by the 1040-NR due date.

   Skipping it is costly: the instructions warn that failing to exclude days could make you a U.S. resident under the test.

3. 3

   Check the closer connection exception

   If you pass the substantial presence test but were in the U.S. fewer than 183 days this year, kept your tax home in one foreign country all year and have a closer connection to that country, you may still be treated as a nonresident, per IRS.gov. You cannot have applied for, or taken steps toward, a green card.

   You claim it on Form 8840, attached to your return or filed separately by the return due date. IRS.gov says a late Form 8840 can cost you the exception unless you show clear and convincing evidence that you tried to comply.

4. 4

   File Form 1040-NR on time if you're a nonresident

   Nonresident aliens who must file use Form 1040-NR, per IRS.gov. The deadline is April 15 if you received wages subject to U.S. withholding or have a U.S. office; otherwise it is June 15. Income effectively connected with a U.S. business is taxed at the graduated rates, while most other U.S.-source investment income is taxed at a flat 30% or a lower treaty rate, with no deductions.

   File on time even if you can’t pay: IRS.gov warns that returns filed more than 16 months late can lose deductions and credits that would otherwise be allowed.

5. 5

   Get an ITIN if you can't get a Social Security number

   An ITIN is a 9-digit number for people who need a U.S. taxpayer ID but are not eligible for an SSN, per IRS.gov. You apply on Form W-7, generally attached to your tax return. IRS.gov says processing usually takes about 7 weeks, or 9 to 11 weeks in peak season or from abroad.

   • An ITIN does not authorize work or qualify you for Social Security benefits or the Earned Income Tax Credit.
   • It expires if it isn’t used on a federal return for three consecutive years, so renew before you file.
6. 6

   Read your country's tax treaty before you file

   The U.S. has income tax treaties with many countries that can reduce or eliminate U.S. tax on certain income for residents of those countries, per IRS.gov. The IRS Tax Treaty Tables summarize which income types qualify. If you are a resident of both countries under their laws and use the treaty to be treated as a nonresident, IRS.gov says to file Form 1040-NR and attach Form 8833, the treaty-based return position disclosure.

   Treaty benefits usually need to be claimed; they are rarely applied automatically.

7. 7

   Check whether you owe Social Security and Medicare tax

   Students in F-1, J-1 or M-1 status who have been in the U.S. fewer than five calendar years are generally nonresident aliens and, per IRS.gov, are generally exempt from Social Security and Medicare taxes on authorized work: on-campus jobs, USCIS-authorized off-campus work and practical training. The exemption doesn’t cover F-2, J-2 or M-2 dependents or unauthorized work.

   If these taxes were withheld in error, ask your employer to refund them first; if that fails, file Form 843 with Form 8316.

8. 8

   Handle a dual-status year correctly

   If you arrive or leave mid-year, you can be a nonresident for part of the year and a resident for the rest, per IRS.gov. That requires a dual-status return prepared under Publication 519, not a normal Form 1040.

   Two traps: the 2026 Form 1040-ES instructions note that your standard deduction is zero if you were a dual-status alien who does not elect to be taxed as a resident, and a joint return with a U.S. citizen or resident spouse is available only if you make the election the IRS describes.

9. 9

   Get a sailing permit before you leave

   Most departing aliens need a certificate of compliance, often called a sailing permit, showing their U.S. taxes are settled, per IRS.gov. You file Form 1040-C, or the shorter Form 2063 if you had no taxable income or your departure won’t hinder collection. Apply no earlier than 30 days before you leave and at least two weeks before.

   Some people are exempt, including certain F-1, J-1 and similar students whose only U.S. income is allowed items. Form 1040-C is not your annual return; you still file that later.

10. 10

    Plan for FIRPTA before you sell U.S. real estate

    When a foreign person sells U.S. real property, the buyer generally must withhold 15% of the amount realized and send it to the IRS on Form 8288, per IRS.gov. The buyer is the withholding agent and is liable if it doesn’t withhold.

    Withholding may not be required if the buyer will use the home as a residence and the price is $300,000 or less, and a reduced rate may apply up to $1 million. If your actual tax will be lower, you can apply for a withholding certificate on Form 8288-B before closing.

Don’t forget state residency

State income tax residency is decided under each state’s own law, not the federal tests above, and IRS.gov notes that states vary in whether they honor federal tax treaties. Check your state tax agency’s residency rules for the year you arrive and the year you leave.

If you already owe the IRS

A missed 1040-NR, a lapsed ITIN or an unexpected FIRPTA shortfall can turn into an IRS balance with penalties. Start by filing any unfiled returns, then look at payment options for the back taxes. Our comparison of tax relief companies for non-residents and expats lists firms that say they handle cross-border cases. Global Gate Tax Relief offers a free consultation on IRS collection problems at 1-877-800-8180.

Frequently asked questions

Related guides and services

• Unfiled tax returnsWhat happens when returns are missing and how to catch up.
• IRS penalty abatementWhen late-filing and late-payment penalties can be removed.
• Best tax relief companiesOur disclosed comparison of national firms and free alternatives.

This guide is general information, not tax or legal advice. Tax rules and IRS procedures change; check the linked IRS sources or speak with a licensed professional about your situation. Individual results vary.