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US NRIs

US NRI Income Tax Calculator

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Use the FY 2026-27 calculator for the current year, or open an earlier year for comparison and older returns.

FY 2026-27

FY 2025-26

FY 2024-25

NRIWallah team

Updated October 2026 · 3 min read

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US Income Tax for NRIs: What You Need to Know

The United States taxes its citizens and residents on income from anywhere in the world. If you are an NRI living in America, whether on an H-1B, L-1, or green card, you are likely subject to US tax on your worldwide income. That includes salary earned in the US, rental income from property in India, interest on your NRE or NRO accounts, and capital gains from Indian mutual funds or shares. Knowing how the system works helps you stay compliant and avoid penalties.

Worldwide Income Taxation

The US taxes residents on income earned anywhere in the world. This is fundamentally different from India’s system, which only taxes NRIs on income that originates in India. Once you meet the Substantial Presence Test or hold a green card, the IRS expects you to report every source of income globally, regardless of whether it has already been taxed in another country.

Key Compliance Requirements: FBAR and FATCA

Beyond filing your federal tax return (Form 1040 or 1040-NR for non-residents), NRIs in the US face additional reporting obligations that catch many people off guard.

FBAR (FinCEN Form 114) requires you to report all foreign financial accounts if their combined value exceeds USD 10,000 at any point during the year. This includes your Indian savings accounts, NRE/NRO accounts, fixed deposits, and even accounts where you have signatory authority.

FATCA (Form 8938) is a separate requirement under the Foreign Account Tax Compliance Act. If your foreign financial assets exceed USD 50,000 on the last day of the tax year (or USD 75,000 at any point), you must report them on your tax return. The thresholds are higher for married couples filing jointly.

Failing to file FBAR or FATCA forms carries steep penalties, even if you owe no additional tax. This is one area where getting it right from the start matters enormously.

The US-India DTAA and Foreign Tax Credit

The Double Taxation Avoidance Agreement between the US and India works primarily through the Foreign Tax Credit mechanism. If you pay tax on Indian income in India, you can claim a credit for that tax against your US tax liability using IRS Form 1116. This prevents genuine double taxation, though the process requires careful documentation. Use our DTAA estimator to see how treaty relief applies to your income.

Which Calculator Should You Use?

The 2026-27 calculator uses the 2026 federal brackets and standard deduction. For the return you file in 2026, use the 2025-26 calculator; the 2024-25 calculator covers older years. Both calculators include Indian income fields and DTAA credit calculations tailored for NRIs.

For broader guidance on living in the US as an NRI, including banking, Social Security, and visa-related topics, visit the NRI Hub US.

This is general information about tax rules, not tax advice for your situation. The outcome depends on your own facts and the rules change, so check with the tax authority or a qualified cross-border tax adviser before you act. NRIWallah publishes general information, not personal advice, and is not authorised or regulated by the Financial Conduct Authority or any other financial regulator.

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