Tax Topic 851

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Tax Topic 851

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Topic 851 – Resident and Nonresident Aliens
Because residents and nonresident aliens are taxed differently, it’s important for you to determine your tax status.

Nonresident Aliens
You’re considered a nonresident alien for any period that you’re neither a U.S. citizen nor a resident alien for tax purposes.

Resident Aliens
You’re considered a resident alien if you met one of the following two tests for the calendar year:

The green card test – You’re considered to have met the green card test if at anytime during the calendar year you were a lawful permanent resident of the United States according to the immigration laws, and this status hasn’t been revoked or administratively or judicially determined to have been abandoned.
The substantial presence test – For the purposes of this test, the term United States doesn’t include U.S. possessions and territories or U.S. airspace. The United States includes the following areas:
All 50 states and the District of Columbia,
The territorial waters of the United States, and
The seabed and subsoil of those submarine areas that are adjacent to U.S. territorial waters and over which the United States has exclusive rights under international law to explore and exploit natural resources.
To meet the substantial presence test, you must have been physically present in the United States on at least:

31 days during the current year, and
183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count:
All of the days you were present in the current year, and
One-third of the days you were present in the first year before the current year, and
One-sixth of the days you were present in the second year before the current year.
Days of Presence in the United States – Don’t count the following days of presence in the United States for the substantial presence test:

Days you commute to work in the United States from a residence in Canada or Mexico if you regularly commute from Canada or Mexico. You commute regularly if you commute to work in the United States on more than 75% of the workdays during your working period in the current year.
Days you’re in the United States for less than 24 hours when you’re in transit between two places outside the United States.
Days you’re in the United States as a crew member of a foreign vessel engaged in transportation between the United States and a foreign country or a U.S. possession. However, this exception doesn’t apply if you otherwise engage in any trade or business in the United States on those days.
Days you intended to leave, but couldn’t leave the United States because of a medical condition or medical problem that arose while you were in the United States. Whether you intended to leave the United States on a particular day is determined based on all the facts and circumstances.
Days you’re an exempt individual.
Exempt Individuals – You’re an exempt individual if you fall into any of the following categories:

An individual temporarily present in the United States as a foreign government-related individual under an A or G visa. However, this category doesn’t include household staff of a foreign government-related individual present in the United States under an A-3 or G-5 visa.
A teacher or trainee temporarily present in the United States under a J or Q visa, who substantially complies with the requirements of the visa. You won’t be an exempt individual as a teacher or trainee if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. However, you’ll be an exempt individual if all of the following conditions are met:
You were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years,
A foreign employer paid all of your compensation during the current year, and
A foreign employer paid all of your compensation during each of the preceding 6 years you were present in the United States as a teacher or trainee.
A student temporarily present in the United States under an F, J, M, or Q visa, who substantially complies with the requirements of the visa. You won’t be an exempt individual as a student in the current year if you’ve been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless you meet both of the following requirements:
You establish that you don’t intend to reside permanently in the United States.
You have substantially complied with the requirements of your visa.
A professional athlete temporarily present in the United States to compete in a charitable sports event.
Even if you meet the substantial presence test, you may still be treated as a nonresident alien if you’re present in the United States for fewer than 183 days during the current calendar year, you maintain a tax home in a foreign country during the year, and you have a closer connection to that country than to the United States. You can’t claim a closer connection to a foreign country if you’ve applied for status as a lawful permanent resident of the United States, or you have an application pending for adjustment of status. Sometimes, a tax treaty between the United States and another country will provide special rules for determining residency for purposes of the treaty. See Publication 519, U.S. Tax Guide for Aliens, for more information about the substantial presence test.

Dual-Status Tax Year – If your status changes during the year from resident alien to nonresident alien or vice versa, you generally have a dual-status tax year. Your tax on the income for the two periods may differ under the provisions of the laws that apply to each period. See Publication 519, U.S. Tax Guide for Aliens, for more information about dual-status aliens.

Forms to File
If you’re a nonresident alien who is engaged in a trade or business in the United States, has any U.S. source income on which the amount of tax withheld didn’t fully satisfy the tax due, or seeks to claim a refund of overwithheld or overpaid tax, you must file a Form 1040NR (PDF) or Form 1040NR-EZ (PDF). See the Form 1040NR Instructions and the Form 1040NR-EZ Instructions for more information.

If you had wages subject to income tax withholding and file on a calendar-year basis, your return is due by April 15.
If you didn’t have wages subject to withholding and file on a calendar-year basis, your return is due by June 15.
Resident aliens must follow the same tax laws as U.S. citizens. If you’re a resident alien, you must report your worldwide income from all sources, that is, income from both within and outside the United States. You’ll file a Form 1040EZ (PDF), Form 1040A (PDF), or Form 1040 (PDF) depending on your tax situation; see What Is the Simplest Form to Use to File My Taxes?

If you’re a resident alien filing on a calendar-year basis, your return is due by April 15, and you should file it with the service center for your area.
For any due date that falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

Additional Information
For more information, refer to Publication 519, U.S. Tax Guide for Aliens, and U.S. Citizens and Resident Aliens Abroad.

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