I am not a US person for tax purposes. I do however own stocks in the US and therefore am subject to a dividend tax rate of 30% (1).

If the total amount of my dividends (my total taxable income) was below my standard deduction, am I exempt from filing a US tax return?

My standard deduction would have been $12,400 in 2020 (2) as I'd be classified as a single taxpayer. The total amount earned from all dividends (every item in my 1099-DIV) is less than $3,000.

I am not subject to capital gains taxes or any other US taxes (according to my research) because I am a non US person. Just dividends.

1 Answer 1


As a nonresident alien for US tax, you don't get the standard deduction that applies to citzens and residents, unless you're a student or apprentice from India; see pub 519 (IRS's guide to US taxes on aliens, meaning people who aren't US citizens; it covers both resident aliens -- those who are in the US according to the green-card or substantial-presence test, and are subject to almost the same taxes as citizens but not exactly, and nonresident aliens, who are subject to substantially different taxes).

As the investopedia link says, 30% is the default rate on dividends for nonresidents but the tax treaty for your country may alter that rate. If that is the correct rate for your country and your broker is withholding at 30% -- which they are required to if you truthfully informed them you are a (tax) nonresident and did not claim a lower treaty rate on an appropriate W-8 -- then that exactly covers your tax, so you are not required to file a return. See again pub 519; since you are a nonresident alien not engaged in a trade or business in US, item 2 applies: you are required to file if you have "US income on which the tax liability was not satisified by ... withholding at source". If your liability was satisified by withholding at source, you are not required to file a turn.

BUT: if the broker knows you're nonresident, they are required to issue you 1042-S, not 1099-DIV (or any other 1099). This suggests you gave them a signed W-9 which said, in part II, "Under penalties of perjury, I certify that: ... 3. I am a U.S. citizen or other U.S. person (defined below) ..." which was false -- and actually a crime although for a few hundred dollars it's not worth their while to prosecute. In this case you did NOT have correct withholding and you definitely are required to file 1040NR, and may be subject to penalties.

Also, if you are physically present in the US but are taxed as nonresident because you are a student, teacher or researcher on F-1, J-1, or M-1 visa (for a certain number of years), then you may still be subject to capital gains tax on investements. That uses a different test, not the same as the normal test for 1040NR vs 1040; see again pub 519. (And, probably not applicable, capital gains on US real property are subject to US tax whether you are resident or nonresident.)

Do you notice a pattern in my references to pub 519? I suggest you look at it to make sure no other provisions (that you didn't mention in your Q) affect you, rather than depending on 'research'.

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