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Official form guide
Form 1040-NRN: 1040-NR (Schedule NEC)
IRS Form 1040-NR is used to report tax on income not effectively connected with a U.S. Trade or Business for filers who attach it to Form 1040-NR. The form allows reporting income taxed at rates of 10%, 15%, 30%, or Other. OMB No. 1545-0074.
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IRS Form 1040-NRN - 1040-NR (Schedule NEC)
IRS Form 1040-NR is used to report tax on income not effectively connected with a U.S. Trade or Business for filers who attach it to Form 1040-NR. The form allows reporting income taxed at rates of 10%, 15%, 30%, or Other. OMB No. 1545-0074.
Risk Radar
Scan points- 1Do not include a gain or loss on disposing of a U.S. real property interest on this form; report it on Schedule D (Form 1040).
- 2Failing to specify the rate of tax (a, b, c, or d) when reporting income on line 13.
- 3Reporting dividends paid by foreign corporations under line 1a instead of line 1b.
- 4Forgetting to enter the net capital gain/loss amount from line 17 onto line 9.
- 5Including a gain/loss from disposing of U.S. real property interest on line 16 without referring to Schedule D.
Plain English
This form helps individuals report money earned from sources outside the United States that are not tied to a U.S. business operation. By completing Form 1040-NR, filers calculate how much tax they owe on this foreign-sourced income. It also allows reporting specific capital gains and losses from property sales.
Submission Date
- Filing date: 2026-01-06 13:10:39
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when reporting income not effectively connected with a U.S. Trade or Business that attaches to Form 1040-NR.
- Do not use it when reporting gains or losses from property sales or exchanges that are effectively connected with a U.S. business, because those should be reported on Schedule D (Form 1040) or Form 4797.
- Check Schedule NEC (Form 1040-NR) instead when detailing the specific income types taxed at rates of 10%, 15%, 30%, or Other.
Form selector
Use this form or another form?
Filing income taxed at 10%, 15%, or 30%
This form attaches to Form 1040-NR and calculates the tax on income not effectively connected with a U.S. Trade or Business.
✓ Confirm that your income type matches one of the listed categories.
Reporting capital gains/losses from US property sales
Line 15 specifically covers capital gains and losses from property sales or exchanges sourced within the United States but not effectively connected with a U.S. business.
✓ Verify that you are reporting income *not* effectively connected, as those go on Schedule D.
Reporting dividends paid by foreign corporations
Itemized under Line 1b, this allows reporting dividends received from foreign corporations.
✓ Ensure the dividend was paid by a foreign corporation to use line 1b instead of 1a.
Filing as a Resident of Canada for gambling income
For Canadian residents, net income must be entered on Line 10c.
✓ Check if you are a resident of Canada before using the instructions for Line 11.
Reporting interest paid by foreign corporations
Interest payments from foreign corporations are reported under Line 2b.
✓ Confirm that the payer is a foreign corporation when selecting line 2b.
Deadline or filing window
The filing trigger is the income earned during the tax year, and the deadline follows that period. The official source does not state a specific calendar due date for Form 1040-NR itself, but the form must be attached to it.
Checklist
What you need before filling it out
Income Amount
The specific dollar amount of income under a chosen rate of tax · Line 1 (Schedule NEC)
Dividends paid by U.S. corporations
The amount of dividends paid by U.S. corporations · Line 1a (Schedule NEC)
Capital Gain/Loss
Net gain or loss from property sales, after calculating line 17 total · Line 18 (Schedule NEC)
Property Sale Detail
Kind of property and description (if necessary) · Line 16(a) (Schedule NEC)
Tax Rate Applied
The specific percentage tax rate used for calculation (e.g., 10%, 30%) · Top columns (Schedule NEC)
Total Taxable Income
Sum of all amounts from lines 1a through 12 across columns (a) through (d) · Line 13 (Schedule NEC)
Before you submit
- 1Ensure the Name shown on Form 1040-NR matches the name listed at the top of Schedule NEC.
- 2Verify that all income lines (1a through 12) have corresponding amounts entered in columns (a), (b), (c), or (d).
- 3Confirm Line 13 is the accurate sum of all entries from Lines 1a-12 across columns (a)-(d).
- 4Check that Line 14 correctly multiplies Line 13 by the rate of tax listed above each column.
- 5Verify that Line 15 is the total sum of columns (a) through (d) from Line 14, which must also be entered on Form 1040-NR, line 23a.
- 6For capital gains/losses, ensure Line 18 reflects a net loss by entering -0-, not zero.
- 7Confirm that the property details in Line 16 include the Date acquired (mm/dd/yyyy) and Date sold (mm/dd/yyyy).
How to file this form
- 1Complete Lines 1 through 12 by entering income amounts under the appropriate tax rate column (a, b, c, or d), specifying the Nature of Income.
- 2Calculate Line 13 by adding all entries from Lines 1a through 12 across columns (a) through (d).
- 3Multiply Line 13 by the corresponding rate of tax listed at the top of each column to complete Line 14, then sum these values to get the total on Line 15.
- 4If reporting property sales/exchanges, fill out Lines 16 and 17, calculating the net gain or loss on Line 18.
- 5Enter the final Total Tax on Income (Line 15) and the Net Capital Gain/Loss (Line 18) onto Form 1040-NR as required.
- 6Sign and date the form before sending it to finalize the filing.
Known limitations
- 1Gambling income for residents of Canada must be entered as net income in column (c) of Schedule NEC (Form 1040-NR).
- 2For gambling residents of countries other than Canada, only winnings should be entered on Schedule NEC (Form 1040-NR), and losses are not allowed.
- 3A gain or loss from disposing of a U.S. real property interest must be reported on Schedule D (Form 1040) instead of directly on Schedule NEC (Form 1040-NR).
- 4Capital gains and losses that are effectively connected with a U.S. business should be reported on Schedule D (Form 1040), Form 4797, or both, not solely on Schedule NEC (Form 1040-NR).
Field map
Compact field-by-field guide
Personal Info
3 items
Enter your legal first and last name as shown on your Social Security card.
Your SSN must match IRS records exactly.
Current mailing address including street, city, state, and ZIP code.
Filing Status
1 items
Select: Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Surviving Spouse.
Income
1 items
Sum of all income sources — wages, interest, dividends, business income, capital gains, unemployment, retirement, and other income.
Adjustments
1 items
Total income minus above-the-line deductions such as IRA contributions, student loan interest, and HSA contributions.
Deductions
1 items
Choose the higher of the standard deduction for your filing status or total itemized deductions from Schedule A.
Tax
1 items
AGI minus deductions. This determines your tax bracket and the amount of tax owed.
Payments
1 items
Sum of federal tax withheld, estimated tax payments, and refundable credits like the Child Tax Credit.
Signatures
1 items
You must sign and date the return. Unsigned returns are invalid.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is 20/25, and the source directs users to www.irs.gov/Form1040NR for instructions and the latest information.
What changed or needs a fresh check
- Edition date — confirm the revision reads 20/25.
- Form Number — confirm the form is designated as Form 1040-NR (Schedule NEC).
- OMB No. — confirm the number listed is 1545-0074.
- Attachment Sequence — confirm the sequence number reads 7B.
- Creation Date — confirm the date reads 4/16/25.
Quick Facts
Downloads
After you file
- 1Keep a copy of the completed Schedule NEC (Form 1040-NR) for your records.
- 2Enter the total tax calculated on line 15 of Schedule NEC (Form 1040-NR) onto Form 1040-NR, line 23a.
- 3Confirm the revision date on the form reads 20/25.
- 4Go to www.irs.gov/Form1040NR for instructions and the latest information regarding filing.
Sources
- SRCSchedule NEC (Form 1040-NR) is an attachment to Form 1040-NR, and it covers tax on income not effectively connected with a U.S. Trade or Business (Instructions p.1).
- SRCThe form allows entry of income under four rates: 10%, 15%, 30%, or Other (specify) (Form p.1).
- SRCGambling residents of Canada must enter net income in column (c) on line 10 (Form p.1).
- SRCFor gambling residents of countries other than Canada, only winnings are entered on line 11 of Schedule NEC (Form 1040-NR) (Form p.1).
- SRCCapital gains and losses from property sales or exchanges not effectively connected with a U.S. business are reported on lines 16 through 18 of Schedule NEC (Form 1040-NR) (Form p.1).
- SRCThe total tax calculated on line 15 must be entered on Form 1040-NR, line 23a (Form p.1).
Common confusion points
What do I report on Line 15?
This section requires reporting capital gains and losses specifically from property sales or exchanges sourced within the United States but which are *not* effectively connected with a U.S. business.
→ Check if you need to report it on Schedule D (Form 1040) or Form 4797 as well.
Should I use Line 1a, 1b, or 1c for dividends?
The choice depends on who paid the dividend: 1a is U.S. corporations, 1b is foreign corporations, and 1c is specific section 871(m) transactions.
→ Review the source to see which category your dividend payment fits.
How do I handle losses for gambling income?
If you are a resident of Canada, enter net income on Line 10c (allowing negative numbers). If you are from another country, only enter winnings on Line 11.
→ Verify your residency status to determine if you use Line 10c or Line 11.
What is the difference between capital gain/loss on Line 9 vs. Line 18?
Line 9 is the total net gain/loss from Line 17 (capital gains/losses); Line 18 is where you enter that same net amount for disclosure purposes.
→ Ensure the final calculated net figure from Line 17 matches what you put on both Line 9 and Line 18.
When do I use 'Other' (Line 12)?
Use Line 12 when your income type does not fit into categories 1 through 11. You must specify the nature of that income in column (d).
→ If you select Line 12, make sure to write a description next to it.
Do I report gains/losses from US real property?
Gains and losses from disposing of U.S. real property interest are *not* reported on Line 16; they must be reported on Schedule D (Form 1040).
→ If the property is US real estate, do not put it on Line 16 unless you are certain it is not effectively connected.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Form 4797 — This form may be used alongside Schedule NEC (Form 1040-NR) when reporting capital gains/losses that are effectively connected with a U.S. business.
Questions about IRS Form 1040-NRN
What is IRS Form 1040-NRN used for?
This form helps individuals report money earned from sources outside the United States that are not tied to a U.S. business operation. By completing Form 1040-NR, filers calculate how much tax they owe on this foreign-sourced income. It also allows reporting specific capital gains and losses from property sales.
Who must file IRS Form 1040-NRN?
Individuals who have income not effectively connected with a U.S. Trade or Business must file IRS Form 1040-NR (Schedule NEC). This form attaches to the main Form 1040-NR.
What information does IRS Form 1040-NRN require?
The form collects details about various types of income, such as dividends and interest, in lines 1 through 12. It also requires reporting capital gains and losses from property sales or exchanges on line 16 through 18.
Where do I file IRS Form 1040-NRN?
The form is filed by attaching it to Form 1040-NR. Instructions direct filers to www.irs.gov/Form1040NR for further information on submission methods.
How do I complete IRS Form 1040-NRN?
First, the filer enters personal information and the amount of income on line 13 before multiplying it by the appropriate rate of tax in lines 14a through 14d. Next, capital gains/losses are totaled on line 17 before entering the net amount on line 18. Finally, the total tax from lines 14 and 15 must be entered onto Form 1040-NR, line 23a.
What happens if IRS Form 1040-NRN is filed incorrectly?
If the income reported does not match the rates applied, or if capital gains/losses are misclassified (e.g., failing to report U.S. real property interest sales), tax liability will be incorrect.
What do I report on Line 15?
This section requires reporting capital gains and losses specifically from property sales or exchanges sourced within the United States but which are *not* effectively connected with a U.S. business. Check if you need to report it on Schedule D (Form 1040) or Form 4797 as well.
Should I use Line 1a, 1b, or 1c for dividends?
The choice depends on who paid the dividend: 1a is U.S. corporations, 1b is foreign corporations, and 1c is specific section 871(m) transactions. Review the source to see which category your dividend payment fits.
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