Nigeria has no comprehensive income tax treaty with the United States. All US-source income is subject to standard withholding rates. An ITIN ensures your payments are processed correctly.
With the naira losing significant value, every dollar earned from US platforms matters. An ITIN unlocks full access to US payment platforms and protects your earnings.
What Is Form 1040-NR?
Form 1040-NR (US Nonresident Alien Income Tax Return) is the US federal tax return filed by non-US persons who earned US-source income. For Nigerian freelancers, consultants, and business owners, this is the tax return that lets you reconcile what was withheld versus what you actually owe — and potentially get a refund.
Filing Form 1040-NR is not optional if you had US-source income and US taxes were withheld. It is your mechanism for proper tax compliance and potential tax recovery.
When Do Nigerians Need to File Form 1040-NR?
- You received a 1099-NEC, 1099-MISC, 1099-K, or 1042-S showing US income and withholding
- You sold US real property (FIRPTA withholding applies)
- You received US rental income with taxes withheld
- You earned US royalties, interest, or dividends with backup withholding
- Your Upwork, Fiverr, or other platform withheld taxes and you want to file for a refund
The ITIN Requirement for Form 1040-NR
You cannot file Form 1040-NR without a US tax identification number. For Nigerian non-residents, this means you must first obtain an ITIN from the IRS before filing your 1040-NR. This creates an important sequence:
- Withholding occurs — your US payer withholds taxes from your payment.
- Get ITIN first — apply through ITIN Plus (IRS CAA), $99, 8–14 weeks. Your W-7 can be submitted with your 1040-NR attached.
- Prepare Form 1040-NR — report your US-source income, calculate the tax owed, and claim credit for taxes already withheld.
- File and wait — the IRS processes the return and issues a refund if over-withheld.
What Income to Report on 1040-NR for Nigerians
Effectively Connected Income (ECI): Income from a US trade or business (freelance services, consulting). Taxed at regular graduated rates (10–37%).
Fixed, Determinable, Annual, Periodical (FDAP) Income: Passive US income — royalties, dividends, interest, rents. Taxed at 30% (or treaty rate — Nigeria has no treaty, so 30% applies).
Can I Get a Refund on Form 1040-NR?
Yes. If more tax was withheld than you owe, the IRS will issue a refund. For Nigerians with ECI (services income), the graduated rate (often 10–22%) is frequently lower than the 30% backup withholding rate — resulting in a meaningful refund.