Nonresident aliens are foreign nationals who do not live in the United States but have some connection to it, either through profession, investments, or other means. These individuals are subject to Internal Revenue Service (IRS) regulations, but typically only pay taxes on income generated in the US. Nonresident aliens and US citizens must both file taxes if they meet the qualifications set forth by the IRS and Internal Revenue Code, but the two are taxed differently.

Nonresident aliens have different tax filing requirements than resident aliens and US citizens. Generally, foreign nationals who do not qualify as resident aliens for tax purposes are classified as nonresident aliens. Nonresident aliens are taxed on all income from any US source, not just from US-based wages. This income can include investment income, real estate income, rent income, royalty income, and any other income generated within the US.

One of the primary differences between resident and nonresident aliens is that nonresident aliens do not pay taxes on income from foreign sources, unless it is effectively connected to trade or business activities in the US. In addition, while resident aliens are subject to graduated taxes, nonresident aliens typically only pay flat taxes on their US income.

Nonresident aliens must fill out a US tax return specifying their income received, expenses incurred, and income taxes already paid. It is important to note that there are numerous exceptions, deductions and credits available to nonresident aliens that US citizens and resident aliens may not qualify for. It is therefore important to consult a qualified tax expert when filing US taxes as a nonresident alien.

Overall, nonresident aliens are foreign nationals who pass the substantial presence tests or are exempt from a Green Card and do not reside in the United States but may have connections to it. Nonresident aliens are subject to US taxation, but must only pay federal taxes on income from US sources. It is important to consult a tax professional when filing taxes as a nonresident alien as there are various exceptions, deductions, and credits available.