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.
Arjun Mehta
April 12, 2026 · 11 min read
Tax season in your first year is where most NRIs feel genuinely lost. The vocabulary is new, the stakes feel high, and bad advice is everywhere. Let's make it boring and clear.
First question: are you a resident for tax purposes?
This has nothing to do with your green card. The IRS uses the Substantial Presence Test. Broadly, if you were physically in the US for at least 31 days this year and 183 days across a weighted three-year window, you are a resident alien for tax purposes.
Residents are taxed on worldwide income. Non-residents are taxed only on US income. Many first-year H-1B holders are "dual-status," which is exactly as fun as it sounds.
Worldwide income means India too
If you are a resident alien, your Indian salary (before you moved), rental income, savings interest, and mutual fund gains are all reportable. The India–US tax 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.
FBAR and FATCA
If your foreign accounts (Indian bank accounts, PPF, etc.) together crossed $10,000 at any point in the year, you must file an FBAR (FinCEN Form 114). It's separate from your tax return and the penalties for ignoring it are severe. FATCA (Form 8938) is a similar disclosure that kicks in at higher thresholds.
The forms checklist
- 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
Should you DIY or hire a pro?
If you're single, W-2 only, and have no India income after moving — software like the major filers handles it fine. The moment you have India income, dual-status, or RSUs, pay a CPA who specifically does NRI returns. It's a few hundred dollars that prevents five-figure mistakes.
File on time, disclose everything, keep your documents for seven years, and the IRS becomes a non-event.