1099-INT from Robinhood taxable for NRA? Understanding tax obligations as nonresident alien

I recently received a 1099-INT from Robinhood for interest earned through their cash sweep program. As a nonresident alien (NRA) last year, I'm trying to figure out if this interest is taxable or not. I know that for NRAs, many types of interest income are exempt from U.S. taxation, but I'm confused about whether interest from Robinhood's cash sweep program falls into one of these exempt categories. Looking through the IRS guidelines about nontaxable types of interest income for nonresident aliens, I can't determine which category would apply to Robinhood's interest payments. Has anyone dealt with this specific situation before? I want to make sure I'm reporting correctly when I file, especially since I know the tax rules for NRAs are different than for U.S. citizens and residents.

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22 comments

Miguel Ramos

•8M

The question of whether your Robinhood 1099-INT is taxable as an NRA depends on the specific source of the interest. Generally, most U.S. bank deposit interest is exempt from U.S. tax for nonresident aliens under the "bank deposit exception" in the tax code. Robinhood's cash sweep program typically places uninvested funds into deposit accounts at partner banks, which would likely qualify for the bank deposit interest exemption. This exemption applies to deposits that are not effectively connected with a U.S. trade or business. To confirm this, you should check your Robinhood account statements or the footnotes on your 1099-INT to see if they specify that the interest comes from bank deposits. If that's the case, you'd report it on Form 1040-NR but list it as exempt income. You'll need to identify it as "exempt under bank deposit interest exception" or similar wording.

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Miguel Ramos

•8M

You should never ignore a 1099 form completely since the IRS receives a copy. You need to report it on your Form 1040-NR, but show it as exempt income. On Schedule NEC (Income Not Effectively Connected With a U.S. Trade or Business) of Form 1040-NR, report the interest in the appropriate column but then list it as exempt in the rightmost column, citing the bank deposit interest exception. This way, when the IRS matches your return against the 1099s they've received, they'll see you've acknowledged the income but properly classified it as exempt. If you don't report it at all, you might receive an automated notice from the IRS questioning the discrepancy.

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QuantumQuasar

•8M

After dealing with a similar situation, I started using taxr.ai https://taxr.ai for help understanding my NRA tax obligations. When I got my first 1099-INT from interactive brokers, I was totally lost trying to figure out what was taxable and what wasn't. I uploaded my Robinhood documents and 1099s to taxr.ai and it instantly clarified which interest income qualified for the bank deposit exception vs which was taxable. It also explained exactly how to report it on my 1040-NR so I wouldn't have issues with the IRS later. Their AI analyzed the exact language on my forms and even pointed out some portfolio interest exemptions I qualified for that my accountant missed. If you're dealing with NRA tax status, definitely worth checking it out.

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QuantumQuasar

•8M

Yes, it works with all major brokerages! I've used it with documents from TD Ameritrade, Robinhood, and Interactive Brokers. You just upload your forms and it identifies the different types of income and which exemptions apply to each. For international treaties, that's actually where it really shines. You tell it your country of residence and citizenship, and it applies the specific treaty provisions that affect your situation. I'm from Singapore but also have investments in Japan and the U.S., and it correctly applied the different withholding rates based on each applicable treaty. The system is actually designed specifically for cross-border tax situations like yours.

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Connor Gallagher

•8M

I was really skeptical about using taxr.ai at first, but after struggling for weeks with my complicated NRA tax situation, I finally gave it a try. The results were honestly impressive. I uploaded my Robinhood 1099-INT and some other investment documents, and it immediately categorized each type of income with the correct tax treatment. The system showed me exactly which interest payments qualified for the bank deposit exception versus which were taxable under my country's tax treaty. It even generated the exact text I needed to include on my Schedule NEC to properly document the exemptions. My tax preparer was shocked at how accurate the analysis was and said it saved her hours of research. For anyone dealing with NRA tax questions, it's definitely worth trying. I wish I'd found it sooner instead of spending hours digging through IRS publications.

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Yara Sayegh

•8M

Has anyone else tried calling the IRS directly about NRA tax questions? I've been trying for weeks to get clarification on my 1099-INT situation with absolutely no luck. Either can't get through or get transferred endlessly until someone hangs up on me. I finally used Claimyr https://claimyr.com after my accountant recommended it. They got me connected to an actual IRS agent in about 20 minutes when I'd been trying for days. The agent confirmed that my Robinhood interest was exempt under the bank deposit exception and explained exactly how to document it on my return. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you back when an agent is on the line. Saved me so much frustration and I finally got a definitive answer from the IRS directly.

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Yara Sayegh

•8M

They use a combination of automated systems and live representatives who know exactly when to call and which options to select in the phone tree. They basically call continuously during optimal times when wait times are shortest until they get through. You're right that not all IRS agents understand NRA taxation well. I specifically requested the International Taxpayer department when connected. The agent I spoke with was clearly knowledgeable about NRA rules and bank deposit exceptions. If you get someone who seems unsure, you can always politely ask to speak with a specialist in international taxation or NRA issues. The key is actually getting through to a person in the first place, which is what Claimyr helped with.

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Keisha Johnson

•8M

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it anyway out of desperation. I had been trying to reach the IRS International Tax department for weeks with no success. I used the service yesterday, and within 45 minutes I was talking to an actual IRS representative who specialized in nonresident alien taxation. She confirmed that interest from Robinhood's sweep program qualifies for the bank deposit exception and is not taxable for NRAs. She also walked me through exactly how to report it on Form 1040-NR and what supporting documentation to include. For anyone struggling with NRA tax questions, being able to actually speak with an IRS specialist makes all the difference. Instead of guessing based on confusing publications, I now have clear documentation of exactly how to handle my Robinhood 1099-INT.

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Paolo Longo

•8M

Just want to add my experience as an NRA who's been dealing with Robinhood interest for a few years now. Beyond the bank deposit exception, you should also check if your country has a tax treaty with the US, as this could affect the tax treatment. I'm from the UK, and under our tax treaty, even if certain interest doesn't qualify for the bank deposit exception, there's a reduced withholding rate. But in practice, I've found that Robinhood's sweep program interest has consistently qualified as exempt under the bank deposit rules. Make sure you're also tracking any potential changes to your residency status. The year I transitioned from nonresident to resident alien status was a nightmare for tax filing because different rules applied to different parts of the year!

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Paolo Longo

•8M

For reporting in your home country, you generally need to report worldwide income regardless of where it's earned or whether it's exempt in the US. In the UK, I report all my US interest income on my UK tax return, even the portions that were exempt from US tax. Germany likely follows a similar approach, but they may give you credit for any US taxes paid to avoid double taxation. Since the Robinhood interest is likely exempt from US tax under the bank deposit exception, you would just report it as income in Germany without claiming foreign tax credits. Check with a German tax advisor to be certain, as each country has slightly different rules for foreign income reporting.

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Oliver Schulz

•8M

The bank deposit interest exemption for NRAs doesn't have a dollar limit, so the amount shouldn't matter. However, there is an important exception: if the interest is "effectively connected" with a U.S. trade or business, it becomes taxable regardless of amount. If you're just holding investments and not actively trading as a business, you should be fine. But if you're doing day trading or other activities that might be considered a U.S. business, then it could potentially be taxable. With those amounts, might be worth consulting a tax pro who specializes in NRA taxation.

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Liam McConnell

•5M

One thing that hasn't been mentioned yet is the importance of keeping detailed records of your Robinhood cash sweep deposits. As an NRA, you'll want to maintain documentation showing that the interest truly comes from bank deposits rather than other investment activities. I'd recommend downloading your monthly statements from Robinhood that show the cash sweep transactions and which partner banks your funds were deposited into. This documentation will be helpful if the IRS ever questions the exempt status of your interest income. Also, be aware that if you have other types of interest income from Robinhood (like from bonds or other securities), those would be treated differently and might not qualify for the bank deposit exception. The 1099-INT should break down the different types of interest, so make sure you're only applying the exemption to the actual bank deposit interest from the cash sweep program.

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Sophia Russo

•3M

This is excellent advice about documentation! I learned this the hard way when I got an IRS notice a couple years ago questioning some exempt interest I had reported. Having those detailed Robinhood statements showing exactly which partner banks held my cash sweep deposits made all the difference in resolving the inquiry quickly. I'd also add that it's worth checking if your Robinhood account has any margin lending or other features that might complicate the tax treatment. Sometimes what looks like simple bank deposit interest can actually be mixed with other types of income that have different tax rules for NRAs. The monthly statements really help separate out these different income sources.

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PixelWarrior

•3M

As a fellow NRA dealing with similar tax questions, I want to emphasize something that helped me understand this better: the key distinction is between "portfolio interest" and "bank deposit interest" - both can be exempt for NRAs, but under different rules. For Robinhood's cash sweep program, you're almost certainly dealing with bank deposit interest since they explicitly state they sweep uninvested cash into FDIC-insured deposit accounts at partner banks. This falls squarely under the bank deposit interest exemption in IRC Section 871(i)(2)(A). However, I'd strongly recommend verifying this by looking at the specific language on your 1099-INT form. Box 1 should show the interest amount, and there might be additional codes or descriptions that clarify the source. If it says something like "cash sweep interest" or references partner banks, you're good to go with the exemption. One last tip: even though it's exempt from federal tax, don't forget to check if your state has any reporting requirements if you have any U.S. state tax obligations. Most states follow federal treatment for NRAs, but it's worth confirming.

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