Your First US Tax Return on H-1B: A No-Panic Guide
Resident vs. non-resident, the substantial presence test, India income, and the forms that actually matter.
Reviewed by Deepak Middha, CA, Series 65
Updated April 12, 2026 · 3 min read
Reviewed by Deepak Middha, CA, Series 65
Deepak has experience in cross-border finance, tax-aware planning, and immigrant money decisions.
Tax season in your first year is where most NRIs feel genuinely lost — new vocabulary, high stakes, and bad advice everywhere. Let's make it boring and clear: who counts as a resident, what income is reportable, and which forms actually matter.
The test that decides everything
- Your tax residency is set by the Substantial Presence Test, not your green card
- Residents are taxed on worldwide income; non-residents only on US income
- Many first-year H-1B holders are dual-status — non-resident part of the year, resident the rest
Are you a resident for tax purposes?
The IRS uses the Substantial Presence Test, not your visa. Broadly, you're a resident alien if you were physically in the US for at least 31 days this year and 183 days across a weighted three-year window. Residents are taxed on worldwide income; non-residents only on US income.
Worldwide income means India too
If you're a resident alien, your Indian salary (before you moved), rental income, savings interest, and mutual-fund gains are all reportable. The India–US treaty and the Foreign Tax Credit (Form 1116) usually prevent true double taxation — you credit taxes paid in India against your US bill — but you still have to disclose. See how the DTAA protects your income.
Don't skip these disclosures
- If your foreign accounts together crossed $10,000 at any point, you must file an FBAR (FinCEN Form 114) — separate from your return, with severe penalties for ignoring it
- FATCA (Form 8938) is a similar disclosure that kicks in at higher thresholds
- Disclosure is required even when no extra tax is owed
The forms checklist
Key takeaways
- W-2 from your employer
- 1099s for any interest, dividends, or freelance income
- Form 1040 — the main return
- Form 1116 if claiming the Foreign Tax Credit
- FBAR if foreign accounts crossed $10,000
- Form 8938 if you cross FATCA thresholds
DIY or hire a pro?
Hire an NRI CPA if
- You have India income this year
- You're dual-status in year one
- You have RSUs or stock comp
DIY software is fine if
- You're single and W-2 only
- You have no India income after moving
- Your return is otherwise straightforward
A CPA who specifically does NRI returns costs a few hundred dollars and prevents five-figure mistakes.
Have Indian income to report?
See exactly how the India-US treaty and Form 1116 stop you being taxed twice.
The bottom line
File on time, disclose everything, and keep your documents for seven years. The one caveat: the moment India income, dual-status, or RSUs enter the picture, hire an NRI-focused CPA. Do that and the IRS becomes a non-event.
