What Is a Non-Resident Alien?
A Non-Resident Alien is a US tax classification for a non-citizen meeting neither the green card test nor the substantial presence test under federal law.
Also known as: NRA, Nonresident Alien Individual.
How Non-Resident Alien works
A Non-Resident Alien (NRA) is a non-US citizen who has passed neither the green card test nor the substantial presence test for a given year, and NRA status limits US federal taxation to income from US sources and income effectively connected with a US trade or business. Effectively connected income is taxed after allowable deductions at the graduated rates which apply to US citizens and residents. Fixed or periodical US-source income, such as dividends or royalties, is taxed at a flat 30 percent without deductions unless a treaty provides a lower rate. Status is tested year by year, and an arrival or departure year may produce dual status.
Non-Resident Alien vs Resident Alien
Unlike a Resident Alien, who is generally taxed by the United States on worldwide income like a citizen, a Non-Resident Alien is taxed only on US-source and effectively connected income.
Example
Illustrative example: A designer from Country A makes short US trips, stays below the substantial presence threshold and holds no green card. US dividends paid to the designer are generally subject to withholding at the flat statutory rate or a lower treaty rate, while fees for design work performed in Country A are generally foreign-source and outside US tax.
Common misconception
Myth: Any income paid by a US company or client is taxable in the United States for a non-resident alien.
Reality: Service income is generally sourced where the work is physically performed, so a Non-Resident Alien working entirely outside the United States generally earns foreign-source service income, subject to specific rules.
Frequently asked questions
Who is considered a nonresident alien?
A Non-Resident Alien is a person who is not a US citizen and who, for the tax year, has passed neither the green card test nor the substantial presence test, according to the IRS.
How is a nonresident alien taxed?
A Non-Resident Alien pays US tax on effectively connected income at graduated rates after deductions, and on fixed or periodical US-source income at a flat 30 percent, which a tax treaty may reduce.
Related terms
- Resident Alien — Opposite US status taxed on worldwide income
- Substantial Presence Test — Day-count test which can end NRA status
- Dual Status Alien — Split status in arrival or departure years
- Form W-8BEN — Form certifying foreign status to withholding agents
Related guides
- Global tax reform and US digital nomads — US international tax context for nomads
- Incorporation options for location-independent entrepreneurs — Entity choices involving US companies and foreign owners
Sources
Last verified: 2026-10-08. This entry is general information, not tax or legal advice; rules vary by country and change over time.
