Form 1040 or Form 1040-NR: Which Return Do You File?

Tax Filing Last reviewed 2 September 2026 · 8 min read

Almost every other question about your US return depends on this one. Are you a resident or a non-resident for US tax purposes? The answer decides which form you file, which income the US can tax, and what deductions you are allowed.

The critical thing to understand up front: US tax residency is not the same as immigration status. You can be a tax resident on a temporary visa. You can be a non-resident while holding a valid visa. The tests are their own.

Test one: the green card test

This one is simple. If you are a lawful permanent resident of the United States at any time during the year — if you hold a green card — you are a US tax resident.

It applies wherever in the world you actually live. A green card holder who has been in Ahmedabad for five years and has not set foot in the United States is still a US tax resident, still taxed on worldwide income, and still required to file. This surprises people every year, and the missed filings accumulate quietly.

Test two: substantial presence

If you do not hold a green card, residency turns on how much time you have physically spent in the US. You meet the substantial presence test if both of the following are true:

• you were in the US for at least 31 days during the current year; and

• the weighted total across three years reaches 183 days.

The weighting is where people go wrong. It is not a simple three-year total. You count:

• all the days in the current year;

• one third of the days in the previous year;

• one sixth of the days in the year before that.

Someone spending four months a year in the US on business can cross the line in their third year without any single year looking remotely like residence. Nothing announces it.

Days that do not count

Certain people are treated as “exempt individuals”, meaning their days in the US are excluded from the count — exempt from the counting, not from tax. This commonly covers students on F, J, M or Q visas, and teachers and trainees on J or Q visas, each for a limited number of years.

There are also narrower exclusions, such as days you could not leave the US because of a medical condition that arose while you were there.

If you are relying on an exclusion, it generally has to be claimed on a form filed with your return — it is not applied automatically because your visa says so.

Two ways out even if you meet the test

Meeting substantial presence is not always the end of the analysis:

• The closer connection exception. If you were in the US for fewer than 183 days in the current year, maintained a tax home in another country, and had a closer connection to that country, you may be able to be treated as a non-resident. It is claimed on a form, and it is not available if you have taken steps toward permanent residence.

• The treaty tie-breaker. Where you are a resident of both the US and India under each country's own rules, the India–US tax treaty has tie-breaker rules — permanent home, centre of vital interests, habitual abode, nationality — applied in order. A treaty position must be disclosed on your return, not simply adopted.

Why the answer matters so much

The two returns are not variations on a theme. They tax different things:

That third row is the one that reaches furthest. A US tax resident living in India has to report Indian bank accounts, Indian mutual funds and Indian income to the IRS. A non-resident with the same accounts does not.

Dual-status years

In the year you arrive in or leave the US, you may be a non-resident for part of the year and a resident for the rest. That is a dual-status year, and it has its own rules and its own restrictions — including limits on deductions and filing status.

Dual-status returns are the ones we most often see prepared incorrectly, usually by software that was never designed to handle them.

Note: This guide is general information about US tax residency, not advice on your circumstances. Residency determinations turn on specific facts and treaty positions must be properly disclosed. Please confirm your position before filing.