Determining Tax Residency Status

Use these guidelines to determine the tax residency of a foreign individual present in the US: 

A nonresident alien for tax purposes (as defined by the IRS):

  • Does not have a green card (Permanent Residence card), and

  • Does not satisfy the substantial presence test

    • The substantial presence test is a calculation used by the Internal Revenue Service (IRS) to determine the tax residency of a foreign individual present in the United States. An individual will satisfy the test if he or she has used up their exempt years (5 calendar* years for F-1 and J-1 student/student intern visa holders, and 2 out of the prior 6 calendar years for all other J visa holders) and is physically present in the U.S. for a minimum of 31 days in the current year and at least 183 days during the current and the prior two years. In calculating the number of days present in the U.S., he or she must count all the days present in the current year, 1/3 of the days present in the prior year, and 1/6 of the days present in the second prior year. NOTE: Do not include days present in the U.S. as an exempt individual.

A resident alien for tax purposes (as defined by the IRS):

A resident alien is subject to the same tax withholding and reporting requirements as a U.S. citizen or Permanent Resident, including taxation of worldwide income.

 

*An individual should add a year to their tally of exempt years if they were in the U.S.on an F,J,M, or Q visa for any length of time during the year in question, although such a visit would not include time spent in transit.

 

Disclaimer

The information contained within this website is provided for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.  All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance and fitness for a particular purpose.