Do Visa Holders Have to File US Taxes

“Do visa holders really have to file US taxes?” It’s a common question, and it tends to surface right after visa paperwork, sponsor letters, and consulate appointments.

The short answer is yes. Once a visa holder earns income in the US, the IRS has expectations.

Visa holders and their sponsors must comply with a different set of tax rules in a system that already feels unfamiliar. And to complicate matters, the IRS doesn’t treat all visa holders the same. Tax obligations depend on the length of stay in the country, the type of income, and the visa category held.

At Deel, we understand US immigration laws and maintain an approval rate above 98%. But our support doesn’t end at visa processing. We offer tailored guidance on US tax compliance for both visa holders and the organizations that sponsor them.

Our platform combines automated US tax form workflows with in-house tax experts, helping you file the right forms and minimize the costly risk of noncompliance.

In this guide, we explain what matters in US taxes for visa holders. You’ll learn which forms are required, the rules that apply, and the consequences of noncompliance.

Which visa holders need to file taxes in the US?

Most visa holders must file taxes if they earn income in the US. The IRS classifies individuals into two categories for tax purposes:

• Resident aliens: Lawful permanent residents (green card holders) or individuals who meet the Substantial Presence Test (SPT). They are taxed like US citizens and must report worldwide income. Resident aliens are also subject to Medicare and Social Security taxes
• Nonresident aliens: Individuals who don’t have a green card and don’t meet the SPT. Nonresident aliens are taxed only on US-sourced income and are generally exempt from Social Security and Medicare taxes

See also: US Permanent Residency Options for International Master's and Doctoral Candidates

What is the substantial presence test?

The IRS uses the Substantial Presence Test to determine whether a non-green card holder should be treated as a resident for tax purposes.

To meet the test, you must be physically present in the US for:

• 31 days in the current year, and
• A total of 183 days over the current year and the two years before it, calculated as:
  • All days present in the current year, plus
  • 1/3 of the days present in the previous year, plus
  • 1/6 of the days present in the year before that

Some days do not count toward this total, including:

• When commuting to work from Canada or Mexico
• Days you are in the US for less than 24 hours, when in transit between two foreign countries
• Time spent as a crew member of a foreign vessel
• When unable to leave due to a medical condition that developed while in the country
• Days you qualify as an exempt individual, such as:
  • Foreign government-related individuals
  • Teachers or trainees on J or Q visas (can be exempt for up to 2 calendar years out of the last 6)
  • Students on F, J, M, or Q visas (can be exempt for up to 5 calendar years in a lifetime)
  • Professional athletes competing in a charitable US sports event (remains exempt while the event is ongoing)

If you qualify as exempt, you may still need to file Form 8843 to explain your exemption.

For a comprehensive breakdown of how the IRS classifies resident and nonresident aliens, refer to Publication 519, US Tax Guide for Aliens.

See also: How to Work Internationally with Employer Support

How resident aliens pay taxes

If you’re classified as a resident alien, you are subject to taxes in the same manner as US citizens. You must report all income, whether earned in the United States or abroad, on Form 1040.

Your income is taxed using the standard IRS tax brackets. The current tax rates for single filers are:

However, certain exclusions may apply. For instance, you may qualify for the Foreign Earned Income Exclusion (FEIE) if:

• You have foreign-earned income, and
• Your tax home is in a foreign country, and
• You meet one of the following:
  • You are a citizen of a country that has a US tax treaty and a bona fide resident of a foreign country for an uninterrupted period that includes a full tax year, or
  • You are physically present in a foreign country for at least 330 full days in any 12-month period

If eligible, you can exclude up to USD 130,000 of foreign earned income by filing Form 2555.

If you paid foreign taxes on the same income, you may also qualify for the Foreign Tax Credit by filing Form 1116.

How nonresident aliens pay taxes

If your status falls under nonresident aliens, you must complete Form W‑4 using special rules for withholding and later file tax returns using Form 1040‑NR.

IRS taxes nonresident aliens only on US-source income, which falls into two categories.

1. Effectively connected income (ECI)

This is income tied to the conduct of a trade or business in the US. It includes wages for services performed in the country, income from a US business, and gains from the sale of US real property.

ECI is taxed at graduated rates using the same tax brackets that apply to US residents. However, deductions are limited. As a nonresident alien, you cannot claim the standard deduction unless a tax treaty or specific rule allows it.

2. Fixed or determinable, annual or periodical (FDAP) income

FDAP income is passive US-source income that is predictable and regular, such as dividends, royalties, interest, or real property income.

FDAP is taxed on the gross amount at a flat 30% rate, unless a tax treaty reduces it. No deductions are allowed against FDAP.

Whether you are a resident or nonresident alien, you can file the required forms right from the Deel dashboard. When you create a contract on Deel, the platform generates and auto-populates the required US tax forms based on the information provided.

You’ll find all required tax forms in one centralized tab, with your documents securely organized and easy to access whenever you need them.

See also: A Guide to International Taxes When Working Remotely

What are the tax responsibilities of independent contractors and freelancers?

Your tax responsibilities as an independent contractor depend on your residency classification:

For resident aliens:

You’re taxed like a US citizen and must report all business income and pay self-employment taxes.

• File Form 1040 and report your income on Schedule C
• Use Schedule SE to calculate self-employment taxes
• Provide clients with Form W-9, so they can issue Form 1099-NEC if they pay you USD 600 or more

For nonresident aliens:

You’re taxed only on US-sourced income for services performed physically in the US. Nonresident aliens are generally not subject to self-employment tax under US law.

• File Form 1040-NR and only report US-source income
• Provide clients with Form W-8BEN to certify your nonresident status and claim income tax treaty benefits, if available
• If claiming a tax treaty exemption, submit Form 8233 to your clients before payment is made
• Clients may issue Form 1099-NEC if they paid you USD 600 or more

Example: You’re a graphic designer on an O-1 visa, sponsored by a US design firm for a full-time role. Your visa allows side projects through your agent, so you’ve also taken on freelance work. You arrived in the US in September and stayed for 100 days. That means you’re classified as a nonresident alien for tax purposes.

In such a case, you must file Form 1040-NR and report:

• Wages from your full-time job. Your employer will issue Form W-2, which shows how much tax was withheld
• Freelance income from US clients for work performed while you were in the country

For freelance work:

• Provide each client with a Form W-8BEN
• If eligible for tax treaty benefits, submit Form 8233
• If you don’t claim a treaty benefit, clients may withhold 30% and issue a Form 1099-NEC if they paid you USD 600 or more

To get comprehensive support with your US taxes, work with a local tax professional. Deel’s Tax Advice Marketplace connects you to licensed US tax advisors we’ve vetted. They can help you understand what credits and exemptions you're eligible for to reduce your tax burden.

For ongoing tax planning, use Deel’s built‑in expense-tracking and bookkeeping tools. You can log business expenses throughout the year to maximize deductions and make tax season easier.

See also: Best Digital Nomad Visas for Tax Relief in 2025

What are the tax responsibilities for employers sponsoring work visas?

As an employer sponsoring foreign workers, you have tax and reporting obligations based on each worker’s visa type and tax residency status.

You must determine whether an employee qualifies as a resident alien or nonresident alien for tax purposes and adjust withholding and reporting accordingly.

For example, employees on H-1B, O-1, or L-1 visas typically meet the substantial presence test and qualify as resident aliens. However, those who arrive partway through the year or spend significant time outside the US may still qualify as nonresident aliens during their initial tax year.

This classification impacts how you withhold taxes and report earnings.

For resident aliens:

• Withhold income taxes, Social Security, and Medicare taxes using the same rules that apply to US citizens
• Issue the employee with Form W‑2 to report the wages paid and all applicable withholdings

For nonresident aliens, these withholding rules apply:

• For income tax, apply the IRS’s special wage withholding rules. This means adjusting taxable wages before using the standard withholding tables. Nonresident aliens aren’t entitled to the standard deduction unless a tax treaty allows it
• Do not withhold Social Security or Medicare taxes for F, J, M, or Q visa holders
• If wages exceed USD 600, issue Form W-2 to report income and any withholding
• File Forms 1042 and 1042-S to report non-wage payments to nonresident aliens, such as royalties, interest, or contractor fees. These payments generally have a 30% withholding unless reduced by a tax treaty

Partner with a work visa and immigration service provider who understands how visa conditions intersect with US tax law. For example, an H-1B visa requires full-time employment with proper wages and payroll reporting.

With Deel’s stand-alone visa and immigration services, our in-house team works closely with employers to ensure visa choices match employment terms and comply with US tax laws. This alignment prevents conflicts between immigration status and tax obligations.

Discover how Deel helps FEMSA, a company operating in over 10 US states, hire and relocate international talent while staying compliant.

See also: How HR Can Streamline Visas & Immigration for Global Talent

When are the deadlines for filing US taxes?

For visa holders:

• Resident aliens: If employed, self-employed, or earning other income, file US taxes by 15 April of the year following the tax year
• Nonresident aliens: If you received US wages or were self-employed in the US during the last tax year, file by 15 April. If you had no US wages and were not engaged in a US trade or business, you have until 15 June to file

If you cannot file by the deadline, submit Form 4868 (Application for Automatic Extension of Time to File US Individual Income Tax Return) to request an extension. You must file this form by the original due date of your return.

For employers sponsoring foreign workers, the following deadlines apply:

• Form W-2: Must be issued to employees and filed with the Social Security Administration by 31 January of the year following the tax year
• Form 1099-NEC: Must be issued to qualifying contractors and filed with the IRS by 31 January
• Form 1042 and Form 1042-S: Must be sent to the payee and filed with the IRS by 15 March

Payroll tax due dates remain the same, regardless of the employee’s visa or tax residency status. See this step-by-step guide to the US payroll process for in-depth guidance.

See also: How Do State Payroll Taxes Vary in the US? (2025 Guide)

Why compliance with US taxes is important

Visa holders must file a timely return and pay any tax owed in full. Delays or underpayments can trigger penalties, interest, and potential visa complications.

Here’s a summary of the most common penalties:

Interest on unpaid taxes begins accruing the day after the payment deadline. It applies to both the unpaid tax and any penalties and compounds daily.

The IRS sets the interest rate quarterly based on the federal short-term rate plus three percentage points. For individuals and standard corporations, the current rate is 7%.

Stay compliant with US taxes with Deel

US tax compliance is mandatory for visa holders or their sponsors, and the rules aren’t always easy to interpret. Deel Immigration makes it simpler with expert support and tools built just for this.

Based on your visa type and the information you provide, Deel’s platform auto-generates the correct tax forms and assists with their timely submission through the correct channels. We send automated reminders when it’s time to file your return and pay.

Deel tracks visa expiration dates too, sending alerts and supporting renewal processes so you can maintain continuous compliance across both tax and immigration.

Book a free consultation with Deel’s immigration team to receive personalized visa and tax support.