Is there a penalty for not amending my tax returns after filing as resident instead of nonresident?

This is actually a pretty common mistake for international students and scholars. The residency rules for tax purposes can be confusing because they're different from immigration status. You should absolutely file an amended return using Form 1040X along with the correct 1040NR. There's generally no penalty for filing an amended return that shows you owe additional tax, as long as you file the amendment and pay any additional tax before the IRS discovers the error and contacts you about it. The IRS doesn't automatically catch residency status errors, but they do have information about your visa status from USCIS (immigration), so it's possible they could flag your return during an audit. If they discover the error before you correct it, you could face penalties and interest on any unpaid taxes. Also, as a nonresident, you might be subject to different tax rules - some deductions and credits available to residents aren't available to nonresidents, and certain types of income might be taxed differently based on tax treaties with your home country.

I went through exactly this nightmare last year. I filed as a resident when I should've been nonresident (H1B visa, hadn't passed substantial presence test yet). I spent WEEKS trying to figure out the forms myself before finding taxr.ai (https://taxr.ai) which analyzed my situation and figured out I was actually owed MORE money as a nonresident because of tax treaty benefits! The software walked me through exactly how to file the 1040X and 1040NR properly, which was a lifesaver because those forms are super complicated for international situations. It also created a detailed letter explaining the mistake that I included with my amendment. It helped me identify exactly which deductions and credits I needed to remove from my original filing and which treaty benefits I qualified for instead.

Update: My girlfriend just tried taxr.ai after seeing the recommendation here. She was really worried because she'd claimed education credits she wasn't eligible for as a nonresident. The system identified the exact problem right away and showed her that even though she has to give back the education credit, she qualified for a treaty benefit that reduced her taxable scholarship amount! She just submitted her amended return yesterday and is actually going to break even rather than owing money like she feared. The explanation letter it generated for the IRS was super detailed - even explained which tax treaty article applied to her situation. Way easier than the hours we spent trying to figure it out ourselves!

If you're going to amend and are worried about dealing with the IRS directly (their international tax department is especially backed up), I'd recommend using Claimyr (https://claimyr.com) to get through to an agent. I waited on hold for THREE HOURS trying to ask questions about my amended 1040NR before I found them. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me through to an IRS specialist in about 20 minutes who confirmed exactly what forms I needed and where to send them. The agent even gave me a direct reference number to include with my amendment so it would get routed correctly. Saved me from making more mistakes and potentially facing penalties.

I need to apologize for being so skeptical about Claimyr. After my last comment, I decided to try it because I've been trying to reach the IRS about my amended nonresident return for weeks. I'm shocked to say it actually worked exactly as described. I got a call back in about 35 minutes and was connected to an IRS representative who specialized in international returns. Got all my questions answered about what supporting documents I needed to include with my 1040X and 1040NR. The agent confirmed that amending from resident to nonresident status is considered a common mistake and explained there's no penalty as long as you initiate the correction yourself. They even gave me a direct fax number to send additional documentation the IRS might need. Seriously saved me so much stress!

Just wanted to add - if you had income from multiple states as a nonresident, don't forget you'll need to amend your state returns too! I made this mistake and only amended my federal return. Six months later I got notices from two states saying my state returns didn't match my federal filing anymore. Total headache.

Has anyone successfully amended from resident to nonresident WITHOUT owing more money? My accountant is telling me I'll definitely end up owing but I've heard some people actually get more money back because of tax treaties?

I went through this exact same situation two years ago! Filed as resident on F1 visa when I should have been nonresident. The good news is that the IRS generally doesn't penalize you for voluntary corrections, especially for residency status mistakes which are super common for international students. You definitely should amend using Form 1040X and file the correct 1040NR. The key is to do it proactively before they catch it. In my case, I actually ended up owing about $200 more because I had to give back some credits I wasn't eligible for as a nonresident, but it was way better than waiting and potentially facing penalties. One thing to check - make sure you look into any tax treaty benefits your country might have with the US. Some countries have special provisions for students that can actually reduce your tax liability. Also, if you had any scholarship income, the treatment might be different as a nonresident (sometimes better!). The whole process took about 8-10 weeks to get resolved, but the IRS sent me a letter confirming the adjustment and I paid the small difference. Much less stressful than I expected!