US Tax: Considerations For Non-Residents and Those with US Income

The US tax season is here, and April 15, 2026, is the deadline to file and pay taxes for the 2025 tax year. And if you are not prepared with all documents, you may be able to apply for an extension, making your tax filing deadline October 15, 2026. Note that the extension only gives you extra time to file returns. You still have to pay any taxes owed by April 15 or face penalties and interest for late payments.

There are three ways to apply for an extension:

• Request an extension using IRS Free File on IRS.gov.
• Pay your tax online and select the reason for the payment as “extension”. You will receive a confirmation number for the extension.
• Mail Form 4868, Application for Automatic Extension of Time To File a US Individual Income Tax Return.

Note that in all three methods, you have to pay your tax. The extension is for filing returns, not for tax payments.

But why are we discussing the US tax deadline?

If you are not a US resident but are earning taxable income from the United States in the form of trade, business, investment, property, pension, or any other form, you have to file returns in the US and pay taxes on the US income.

In this article, we will discuss the tax considerations for individuals who are non-residents of the US for income tax purposes.

The Importance of Residency Status for Income Tax Purposes

The first and most complex consideration is to determine your residency status for income tax purposes. It will lay the foundation for which tax rules and reporting requirements will apply to you.

Individuals who are not US citizens or US nationals are considered alien – resident and non-resident. Resident aliens abide by the same tax rules as US citizens and report their worldwide income in their US tax filings. The graduated tax rate applies to them. However, tax rules for non-resident aliens change.

It is best to consult a professional tax advisor well-versed in the US tax laws to determine your residency status.

Which Income Should Non-Residents Report in Their US Tax Returns?

The IRS has the authority to impose tax on the income of non-residents earned or sourced from the US. It has no authority over your income earned or sourced from another country. Hence, as a non-resident, you only report US income, which can be of two types:

• Income “effectively connected” with a US trade or business: This can include salary, wages, tips, scholarship, and fellowship grants. This income is taxed at graduated rates.
• Fixed, determinable, annual, or periodical (FDAP) income: This includes passive income like dividends or interest, pension, social security benefits, royalties, income, or capital gain from property. If you have a US income, you have to file tax returns. You can file it directly or through a representative or agent.

Which Tax Form Should Non-Residents File and When?

The IRS requires non-residents to file Form 1040-NR, U.S. Nonresident Alien Income Tax Return, only if you have US income that is subject to tax. You must file returns and pay tax on income by April 15. The tax filing deadline is June 15 if you do not have an office or place of business in the US, nor are you an employee or self-employed person who received wage or non-employee compensation that was subject to withholding tax.

Contact DNTW Toronto LLP in North York to Help You File US Tax Returns

Having income in the US subjects you to different tax laws. A professional tax advisor can help you navigate these laws and stay compliant. At DNTW Toronto LLP, our accountants and tax advisors can provide services such as tax return filing. To learn more about how DNTW Toronto LLP can provide you with the best accounting and taxation services, reach out to us here.