Short answer: most non-resident LLC owners never file a Form 1040-NR. You file it when you personally have US-source income to report, which for an LLC owner means effectively connected income from a US trade or business, or US-source passive income not fully covered by withholding. If your LLC does not cross the ETBUS line, you have no 1040-NR obligation, and you still file Form 5472 every year regardless.
This is part of the US tax guide for non-resident LLC owners, which covers where the tax actually lands.
The two returns people conflate
Nothing in this area causes more confusion than the fact that a foreign-owned LLC can involve two completely unrelated filings, one of which is nearly always required and one of which usually is not.
| Form 5472 (+ pro-forma 1120) | Form 1040-NR | |
|---|---|---|
| Who files | The LLC | You, personally |
| What it is | An information return | An income tax return |
| Reports | Transactions between the LLC and its foreign owner | Your US-source income |
| Calculates tax? | No | Yes |
| When required | Every year, regardless of activity or income | Only when you have reportable US income |
| Penalty for missing it | $25,000, automatic | Interest, penalties, and a lost deduction rule |
They are not alternatives and they are not substitutes. Filing the 5472 does not discharge a 1040-NR obligation, and having no 1040-NR obligation does not excuse the 5472. We regularly meet founders who filed neither because they had been told “an LLC with no US tax doesn’t file anything”, which is wrong in the most expensive available direction.
When you actually have to file
You have effectively connected income. This is the main case. If your LLC is engaged in a trade or business in the United States, the income connected with that activity is taxable to you federally, at graduated rates, on a net basis after allowable deductions. Because a single-member LLC is disregarded, that income does not stop at the entity: it lands on you, and it lands on a 1040-NR.
Whether you cross into ETBUS is a facts question, not a revenue question. Remote services delivered from outside the US, with no office, no employees and no dependent agent inside the country, generally do not. US-held inventory, US staff, or someone in the United States with authority to conclude contracts on your behalf can. The ETBUS test works through the factors.
You have US-source passive income that withholding did not settle. Certain US-source income of a non-resident, dividends and some royalties and interest among them, is subject to a flat 30% tax on the gross amount, or a lower treaty rate. When a withholding agent applies the correct rate at source, that tax is generally final and no return is needed. When it does not, or when you are claiming a treaty rate or a refund of over-withheld tax, the 1040-NR is the mechanism.
You are claiming a refund. If more was withheld than was owed, the return is how you get it back. There is no other route.
When you do not
If your income is not effectively connected with a US trade or business and you have no US-source income of the kind that triggers reporting, there is no 1040-NR filing requirement. That describes the majority of remote-services founders operating a US LLC from abroad.
What it does not describe is a permanent state of affairs. The line moves when your business changes shape: you start holding inventory in a US warehouse, you hire someone in the United States, you take on a US-based partner who signs contracts. The question is worth re-asking each year rather than being answered once.
Which deadline applies
Two dates exist, and the wrong one is quoted constantly.
- 15 April. Applies if you received wages subject to US withholding, or if you have an office or place of business in the United States.
- 15 June. Applies if neither of those is true.
The trap is that founders hear “non-residents file in June” and stop reading. In practice, if you are filing at all because your LLC generates effectively connected income, the activity that created the ECI often means you are treated as having a US place of business, which puts you back on the April date. If you are filing, confirm which one applies to your facts rather than assuming the later one.
Form 4868, filed before the original due date, moves the filing deadline to 15 October. It does not move the payment date. Interest runs from the original due date on anything unpaid.
The rule that makes late filing expensive
There is a provision specific to non-residents that deserves more attention than it gets. Deductions and credits against effectively connected income are allowed only if a true and accurate return is filed, and there is a time limit attached. Miss it, and the IRS can assess tax on your gross effectively connected income, with no deductions for the costs of earning it.
The arithmetic on that is unpleasant. A business with $200,000 of ECI and $150,000 of costs expects to be taxed on $50,000. Under this rule it can be taxed on $200,000. That is not a penalty in the technical sense, which is precisely why people who read a penalty table do not see it coming.
Getting the ITIN in time
The return needs a personal taxpayer number, and as a non-resident that means an ITIN. Processing runs 7 to 11 weeks outside filing season and 9 to 11 weeks or longer between mid-January and the end of April, before international mail.
The practical approach is not to wait. Form W-7 can be submitted together with the return it supports, which is the ordinary route for a first-time filer. Our guide on the ITIN for non-resident LLC owners covers the three application routes and where they fail.
What we tell clients
Three questions, once a year, before anything else:
- Did anything about the business create US presence this year: inventory, people, an office, an agent with signing authority?
- Did any US-source passive income arrive that was not withheld on correctly?
- Is the 5472 filed, on time, regardless of the answers to the first two?
If the answer to the first two is no, there is no 1040-NR and there was never going to be one. If the answer to either is yes, the return is not optional and the ITIN timeline starts immediately.
Where this needs working through against your actual facts rather than a general rule, that is what our assessment is for.
Frequently asked questions
Does every non-resident LLC owner file a 1040-NR?
No. Form 1040-NR is required when you personally have US-source income to report: effectively connected income from a US trade or business, or US-source passive income that was not fully satisfied by withholding at source. A founder selling services remotely from outside the United States, with no US office, employees or dependent agent, typically has neither and therefore has no 1040-NR obligation. That same founder still files Form 5472 for the LLC every year.
What is the difference between Form 5472 and Form 1040-NR?
Form 5472 is an information return about the LLC, filed by the LLC with a pro-forma 1120, reporting transactions between the entity and its foreign owner. It reports no income and calculates no tax, and it is due every year regardless of activity. Form 1040-NR is your personal income tax return as a non-resident individual, due only when you have reportable US income. Filing one has no bearing on the other.
Which deadline applies to me, April or June?
15 April if you received wages subject to US withholding, or if your activity gives you an office or place of business in the United States. 15 June if neither applies. In practice, an owner whose LLC generates effectively connected income is usually treated as having a US place of business through that activity, so April is the more common answer for anyone actually filing because of ECI.
Can I extend the deadline?
Yes. Form 4868, filed before the original due date, extends the filing deadline to 15 October. It extends the time to file and not the time to pay: any tax owed is still due on the original date, and interest runs from there. An extension is a filing convenience, not a payment plan.
Do I need an ITIN to file a 1040-NR?
Yes. The return needs a taxpayer identification number for you personally, and as a non-resident who is not eligible for a Social Security Number, that means an ITIN. Since processing runs 7 to 11 weeks and longer in filing season, this is the item that has to start first. In practice you can submit the Form W-7 application together with the return rather than waiting for the number before filing.
What happens if I should have filed and did not?
Interest and penalties accrue on any unpaid tax, and the statute of limitations on assessment does not begin to run for a return that was never filed, which means the year stays open indefinitely. There is also a specific and expensive rule for non-residents: deductions and credits against effectively connected income can be denied if the return is not filed within a set period, which can turn a modest tax bill on net profit into a much larger one on gross receipts.