Tax Resources for Foreign Nationals

Are You a Resident Alien?

Your immigration status with the Internal Revenue Service and U.S. Citizenship and Immigration Services isn't necessarily the same.
Your immigration status with the Internal Revenue Service and U.S. Citizenship and Immigration Services isn't necessarily the same.
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Your tax status typically falls under two categories: resident alien or nonresident alien. A third category, dual-status alien, results when you fit the other categories within the same year -- that is, you were a nonresident alien from, say, January to June, then became a resident alien from July to December.

How can you tell if you're a resident alien? There are two standards that determine this status, and meeting either of them is sufficient to qualify you as a resident alien. The first standard is easy. You're a resident alien if you are a lawful permanent resident (LPR) under U.S. Citizenship and Immigration Services (USCIS) regulations. Or, to put it more simply, you have a green card. Anyone who has LPR status and possesses a green card is considered a resident alien by the IRS, no matter where you live during the year.

The second way you can be considered a resident alien is if you pass the substantial presence test. This depends entirely on how long you were in the U.S. It doesn't matter why you were in the U.S., what job you had or what your immigration status with USCIS is. You pass the substantial presence test if you were present in the U.S. for at least 31 days during the year, and if the sum of the days you were in the U.S. this year, plus one-third of the days you were in the U.S. last year, plus one-sixth of the days you were in the U.S. the year before that equals 183 or more.

There's some math involved in calculating the substantial presence test, but it's pretty straightforward. But we're not done yet. There are two exceptions, and any day you qualify for an exception doesn't count toward your substantial presence total. The first exception is the exempt individual exception. If you are a teacher, trainee or student with a specific type of visa (J or Q for teachers and trainees, F, J, Q or M for students), you're exempt from the current year. This is limited by the number of times you've used this exemption, up to twice in the last six years for teachers and trainees, and a limit of five years for students, although both of these limits can be extended. Professional athletes engaged in a charitable sporting event are exempt the day of the event, and anyone working for a foreign government is also exempt. Note that any family members with visas derived from yours also will be considered exempt if you are.

The other exception is called the closer-connection-to-a-foreign-country exception. This one is a bit fuzzy, as it requires convincing the IRS that your contacts in your home country are more significant than your contacts in the U.S. You only qualify for this exception if you were in the U.S. fewer than 183 days in the current year, and you have a tax home in your home country. Because there's no guarantee that the IRS will accept this exception, it's considered a last resort for anyone who wants to preserve nonresident alien status.

What about nonresident aliens? And what happens if your status changes halfway through the year? We'll explain dual-status aliens in the next section.