Rate columns (a) to (d)
Each income line has columns for 10%, 15% and 30%, and column (d) for another rate that you specify.
1040-NR
Tax on Income Not Effectively Connected With a U.S. Trade or Business
- Agency
- IRS
- Revision
- 2025
- Fillable fields
- 137
- Pages
- 1
- Official source
- IRS form page
- Checked
- October 21, 2026
Schedule NEC (Form 1040-NR): Tax on Income Not Effectively Connected With a U.S. Business
Schedule NEC (Form 1040-NR) is the 2025 schedule for tax on income not effectively connected with a U.S. trade or business. The IRS says a Form 1040-NR filer uses it to figure the tax on that income and to figure capital gains and losses from sales or exchanges of property that is not effectively connected with a U.S. business.
Income is entered by type, such as dividends, interest, royalties, pensions, social security benefits and gambling winnings, in the column for its tax rate: 10%, 15%, 30% or another rate. The instructions say this income is taxed at 30% unless a treaty between the country of residence and the United States sets a lower rate. The total on line 15 is carried to Form 1040-NR, line 23a.
The schedule says to attach it to Form 1040-NR, and the instructions say not to use it with Form 1040 or 1040-SR. You can fill out Schedule NEC (Form 1040-NR) free in your browser on this page and download it without an account.
What's on Schedule NEC (Form 1040-NR)
Lines 1a to 2c: dividends and interest
Dividends paid by U.S. corporations, dividends paid by foreign corporations, dividend equivalent payments under section 871(m) transactions, and mortgage interest, interest paid by foreign corporations and other interest.
Lines 3 to 8: royalties, pensions and benefits
Industrial royalties, motion picture or TV copyright royalties, other royalties, real property income and natural resources royalties, pensions and annuities, and social security benefits.
Lines 9 to 12: gains, gambling and other
Capital gain from line 18, gambling for residents of Canada (winnings, losses and net), gambling for residents of other countries (winnings only), and other income you specify.
Lines 13 to 15: the tax
Add each column, multiply by the rate at the top of each column, and add the results. Line 15 is entered on Form 1040-NR, line 23a.
Lines 16 to 18: capital gains and losses
Property sales or exchanges from U.S. sources not effectively connected with a U.S. business: kind of property, dates acquired and sold, sales price, cost or other basis, loss or gain. Line 18 carries the net gain to line 9.
How to fill out Schedule NEC (Form 1040-NR)
- 1
Pick the row and the column
The instructions say to enter income in the row for its category and the column for the correct rate under a tax treaty or the general rules. Column (d) is for a 0% rate or a rate not in columns (a) to (c). Include income only to the extent it is U.S. source and not effectively connected.
- 2
Line 8: social security
The instructions say to enter 85% of the total from box 5 of all Forms SSA-1042S and RRB-1042S in the right column of line 8, and to attach a copy of each to the front of Form 1040-NR.
- 3
Lines 10 and 11: gambling
Residents of Canada enter winnings on line 10a, losses on line 10b and net income on line 10c, column (c). Residents of other countries enter winnings only on line 11. Winnings exempt by treaty go in column (d) at 0%.
- 4
Line 12: other income
The instructions list examples such as certain alimony received, prizes and awards, taxable distributions from an ABLE account and certain gains from the sale or exchange of personal property.
- 5
Lines 16 to 18: capital gains
The instructions say to include these gains and losses only if you were in the United States at least 183 days during 2025, not to use a capital loss carryover, and that losses in excess of gains aren't allowed. Gains or losses on U.S. real property interests go on Schedule D (Form 1040).
- 6
Lines 13 to 15: figure the tax
Add lines 1a through 12 in each column, multiply by each column's rate, and enter the total on line 15 and on Form 1040-NR, line 23a.
Why fill Form 1040-NR on indox
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- The official blank straight from the IRS, not a copy someone retyped
- Works on a phone, tablet or computer
Where it goes, deadlines and withholding
Attach to Form 1040-NR
The schedule says to attach it to Form 1040-NR. It carries Attachment Sequence No. 7B.
Due dates
The instructions say a 2025 calendar year Form 1040-NR is due by April 15, 2026, for an employee who received wages subject to U.S. income tax withholding, and by June 15, 2026, otherwise.
Where to mail
For individuals not enclosing a payment, the instructions give Department of the Treasury, Internal Revenue Service, Austin, TX 73301-0215, USA. With a payment: Internal Revenue Service, P.O. Box 1303, Charlotte, NC 28201-1303, USA.
E-file
The instructions say that if you e-file your return, there is no need to mail it.
Withholding at the source
The instructions say tax on this income is withheld at the source by the person who pays it, generally at a 30% rate, and that a treaty may set a lower rate or an exemption.
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Who uses Schedule NEC (Form 1040-NR)?
The schedule is attached to Form 1040-NR. The instructions list who needs it as part of that return.
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Questions about Form 1040-NR
Can Schedule NEC be used with Form 1040?
No. The instructions say not to use Schedule NEC (Form 1040-NR) with Form 1040 or Form 1040-SR, and to use it only with Form 1040-NR.
What tax rate applies to this income?
The instructions say it is taxed at 30% unless a treaty between the country of residence and the United States sets a lower rate. The schedule has columns for 10%, 15%, 30% and another rate.
How much of social security benefits goes on line 8?
The instructions say 85% of the total from box 5 of all Forms SSA-1042S and RRB-1042S.
Are capital gains on lines 16 to 18 always included?
The instructions say to include them only if you were in the United States at least 183 days during 2025.
Where does the total from line 15 go?
The schedule says to enter it on Form 1040-NR, line 23a.
Is interest from a U.S. bank subject to the 30% tax?
The instructions list interest from a U.S. bank, savings and loan association, or similar institution among items of interest generally exempt from the 30% tax. They point to Pub. 519 and Pub. 515 for other exceptions.