Last year I filed Form 1040 instead of Form 1040NR, now what?

By | March 10, 2014

What is a 1040NR?

I’m a foreigner who earned income on a J-1 visa that spanned over 2012 and 2013. Last year, as I had a US address, I filed a 1040 with TurboTax. However, now that I’m back home (in a foreign country), there were issues filing electronically with TurboTax again and TurboTax staff pointed out that as I was considered a non-resident alien the whole time (days spent on a J-1 do not count towards the substantial presence test), I should file Form 1040NR instead and TurboTax can’t do that.


Last year I filed Form 1040 instead of Form 1040NR, now what?

So that’s cool for this year, but what about last year? It took a while (I don’t remember the exact terminology but they sent me a letter saying my form was being investigated or something) but the IRS did end up sending me a return without complaining.

I should mention that I’m in the process of finding a CPA (which is kind of hard when you don’t live in the US), would it be only to help me do this year’s 1040NR, and that of course I’ll be asking him the same thing. However, for the time being, I’d like to have an idea of how big of a deal it is.


How to fill out 1040NR?

Technically you should have filed a Form 1040NR for 2012, as the Form 1040 is only for full-year U.S. residents and citizens. There will likely be a difference in the income tax liability because there are certain deductions that are allowed on the Form 1040 that are not allowed on the Form 1040NR (the most important being the standard deduction).

Who should file 1040NR?

Although the IRS processed the original 2012 return and issued a refund, that does not mean the return was filed correctly. You should technically file an amended 2012 return such that you file a Form 1040NR instead of a Form 1040. The amended return form is 1040X. In general I would expect there to be a balance due with the amended return, but in some cases there may be no difference if your income was relatively small and you worked in a state that assess a state income tax.


J-1 Visa and 1040NR

On a side note: in certain circumstances the employment income you earn on a J-1 VISA may be exempt from U.S. income tax. However, that generally requires you to have been paid out of a non-U.S. payroll and the associated payroll could not have been cross-charged to a U.S. entity. If you received a Form W-2 from your employer reporting your U.S. wages and withholdings then this exception likely does not apply.