Non-resident aliens with US-source income
You're not a US person, but you have US-source income — rental property, royalties, business income, or a US-tax-withholding problem. A 1040NR may be required, and the treaty can help.
US-source income without US residency is a different return — and the treaty does most of the work.
If you're not a US person but you have US-source income — rental property, dividends, royalties, business income, a one-off K-1 from a US partnership — you're potentially in scope for a 1040NR. The good news: the US-UK treaty (or whichever treaty applies) typically reduces or eliminates US withholding on most income types if the right form is filed in time. The bad news: getting the W-8BEN, W-8BEN-E, and treaty disclosure right requires more knowledge of US tax than most non-residents have. Done well, you keep the income and pay nothing extra. Done badly, US payers withhold 30% and getting it back means filing anyway.
- 1040NR prepared with treaty positions correctly claimed
- W-8BEN / W-8BEN-E filed with US payers to reduce withholding upfront
- FIRPTA on US real estate handled at sale, not after
- Effectively-connected income vs. FDAP analysis on every income stream
- 30%default US withholding rate on FDAP without treaty
- 0–15%treaty-reduced rate on most income types
- Apr 151040NR deadline (Jun 15 for some non-residents)
- FIRPTAthe regime that taxes US real estate disposals
What we look at first.
- Effectively-connected income vs. FDAP withholding
- Treaty benefit claims
- US real estate income (FIRPTA on disposal)
- W-8BEN documentation
The forms we’ll likely prepare.
- Form 1040NR
- Form 8833 for treaty positions
- W-8BEN / W-8BEN-E guidance
Four steps from intake to filed return.
- 01
Income mapping
Catalogue every US-source income stream — rental, dividends, royalties, partnership K-1s — and classify as FDAP vs. effectively connected.
- 02
Treaty analysis
Identify which treaty articles apply and what disclosure is needed to claim the reduced rate.
- 03
Documentation
Prepare W-8BEN / W-8BEN-E for US payers and any treaty disclosure forms (Form 8833) for the return itself.
- 04
Annual filing
Prepare 1040NR with the right schedules and treaty positions, e-file where available, and reconcile US withholding to the final liability.
I have one US rental property and a small partnership share. TaxStone files the 1040NR every year for less than what I'd lose to default withholding in a single month.
Common mistakes we see — and fix.
These are the four positions that most often get filed wrong before clients come to us. Sometimes it’s a prior preparer’s call we’d disagree with; sometimes it’s a default election that compounded for years. Either way, we work backwards through them before drafting your return.
- Letting US payers withhold 30% on income that's treaty-eligible at 15%
- Missing the W-8BEN refresh — it expires every 3 years
- Selling US real estate without FIRPTA withholding planning
- Failing to file 1040NR when the only US income is treaty-exempt (often still required)
Three snapshots from our practice.
Anonymised, paraphrased, but representative — three of the shapes the work tends to take for non-resident aliens with us-source income.
US rentalUK-resident with one US rental property. Annual 1040NR + state, depreciation strategy, FIRPTA planning ahead of the eventual sale, W-8BEN refresh on the property manager's withholding.
K-1 partnerLimited partner in a US PE fund with annual K-1 distributions. Effectively-connected income test, treaty-rate withholding setup, 1040NR with the right schedules and Form 8833 disclosure.
RoyaltiesUK author with a US publisher paying royalties. W-8BEN-E filed at the publisher, treaty-reduced withholding from 30% to 0% on book royalties, annual 1040NR to reconcile.
See if non-resident aliens with us-source income describes your situation.
We'll confirm what you need to file — and just as importantly, what you don't.