A non-resident alien isn’t a U.S. citizen or national and doesn’t qualify as a resident alien. They usually have stronger ties to another country and are in the U.S. temporarily—for work, school, or travel.
They don’t meet the green card test or substantial presence test, which determine tax residency. That means different tax rules apply compared to U.S. citizens and residents.
Resident alien vs. Non-resident alien
The main differences come down to tax status and residency. Here’s a quick breakdown:
Resident Aliens | Nonresident Aliens | |
Residency Criteria | Meet either the green card test (hold a U.S. green card) or the substantial presence test (physically present in the U.S. for a significant period, generally 183 days or more over three years). | Do not meet the green card test or substantial presence test. Typically, they have a closer connection to another country and are in the U.S. temporarily. |
Taxation | Taxed similarly to U.S. citizens, meaning they must report and pay taxes on their worldwide income. | Only taxed on their U.S.-sourced income and must file different tax forms, such as Form 1040-NR. |
Tax Forms | File the same tax forms as U.S. citizens, such as Form 1040. | File specific forms like Form 1040-NR and may have different withholding requirements. |
Tax Deductions and Credits | Generally eligible for the same deductions and credits as U.S. citizens. | Have limited access to deductions and credits, often restricted to certain treaty benefits and specific conditions. |
Tax rules for non-resident aliens
Non-resident aliens only pay taxes on U.S.-sourced income—anything earned within the country. They file taxes using Form 1040-NR and typically pay a flat 30% tax on certain income (interest, dividends, rents, and royalties). Some tax treaties may lower this rate.
They can’t claim the standard deduction and have fewer tax credit options than residents. Withholding and reporting rules are also different, so understanding these guidelines helps avoid compliance issues and penalties.
What work documents do non-resident aliens need?
Non-resident aliens working in the U.S. need either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) for tax purposes.
They also need to:
- Fill out Form W-4 for tax withholding.
- Provide valid work authorization, like an Employment Authorization Document (EAD) or a visa that permits employment.
- Submit Form W-8BEN to certify foreign status for tax withholding (if applicable).
Do non-resident aliens get social security numbers?
It depends. If they’re eligible to work in the U.S., they can apply for an SSN. If not, they’ll need an ITIN instead, which is only used for tax reporting.
SSNs are usually issued to those authorized to work, including some non-resident aliens with employment-based visas. ITINs, on the other hand, don’t grant work authorization but allow non-resident aliens to fulfill tax obligations.
Why hire a non-resident alien?
Hiring non-resident aliens can benefit businesses in several ways:
- Access to Global Talent: Expands the hiring pool beyond U.S. candidates.
- Filling Skill Gaps: Some industries struggle to find qualified professionals locally.
- Cultural Diversity: A diverse team brings fresh ideas and perspectives.
- Language Skills: Useful for businesses with international clients or diverse customer bases.
- Global Market Insights: Employees from other countries can provide valuable business insights.
- Potential Cost Savings: Some non-resident aliens may have different salary expectations or benefits.
- Workforce Flexibility: Many are open to temporary, contract, or project-based roles.
Non-resident aliens bring unique value to businesses, but employers must follow tax and immigration laws to stay compliant.