Form 1040NR-EZ must be filed by non-resident aliens currently engaged in any business or trade in the US, whose income are exempted from paying the federal tax because of a tax treaty or tax laws; or they do not earn any income from their transactions or sources in the United States. Additionally, this form can be used by nonresident aliens whose income does not reach $ 100,000, and they do not earn any income in the form of dividends or interests. The nonresident’s income must be in the form of salaries or wages, taxable refunds, tips, income from scholarship and fellowship grants as well as from local income taxes.
Only nonresident aliens without any dependent or who were not claimed as dependents on anybody’s tax return may file this form. For the purpose of taxation, it is imperative that these individuals are financially independent. Furthermore, nonresident aliens using this form and their spouses are not allowed to claim tax credits. These individuals must not also claim tax exemption for their spouses. However, itemized deductions could be claimed only with regards to the state tax as well as the local income tax.
It is imperative that the nonresident alien has no tax liability except for the taxes in the tax table. This also includes Medicare and social security taxes from tip income that the nonresident aliens failed to report to their employers.
Category: Tax Return. This form is also called, the U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents. Its primary purpose is to report income on tips, salaries and wages received by the nonresident aliens. It is often used by nonresident aliens who have received income from US sources in the preceding year.
Link to IRS website: http://www.irs.gov/pub/irs-pdf/f1040nre.pdf