Form 1040NR: the US non-resident return, explained
If you are not a US resident for tax purposes but earned US-source income, this is usually the form you file instead of the standard 1040.
Who files it
Non-resident aliens with US-source income, including wages from a US employer, US rental income, or US investment income, generally file Form 1040NR instead of the standard 1040. Your residency status is determined by the Substantial Presence Test, not your citizenship.
What it changes
1040NR taxes only your US-source income, not your worldwide income, and it removes access to some credits and the standard deduction that resident filers get by default. Getting this determination wrong in either direction either overpays your US tax or creates a compliance problem.
Where it interacts with your Canadian return
Whatever US tax you pay on this return typically becomes the basis for a foreign tax credit on your Canadian T1, which is why the two returns need to be prepared together rather than separately.
Not sure how this applies to your situation?
This guide is general information, not individualized advice. Book a consultation to see how 1040NR fits your actual filing.
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