Overview of Tax Residency Status
In the U.S. tax system, foreign nationals are considered either ‘non-residents for tax purposes‘ or ‘residents for tax purposes’. Your tax residency status depends on your current immigration status and/or how long you’ve been in the U.S. See below to determine whether or not you are considered a ‘resident for tax purposes’.
Determining Tax Residency Status
If you are not a U.S. citizen, you are considered a ‘non-resident for tax purposes’ unless you meet the criteria for one of the following tests:
- The “Green Card” Test You are a ‘resident for tax purposes’ if you were a legal permanent resident of the United States any time during the past calendar year.
- The Substantial Presence Test. You will be considered a ‘resident for tax purposes’ if you meet the Substantial Presence Test for the previous calendar year. To meet this test, you must be physically present in the United States for 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 that, counting:
- All the days you were present in the current year, and
- 1/3 of the days you were present in the first year before the current year, and
- 1/6 of the days you were present in the second year before the current year.
If total equals 183 days or more = Resident for Tax
If total equals 182 days or less = Nonresident for Tax
- Confused? Use the Substantial Presence Test Calculator to do the calculations for you. To use the calculator, you must know the number of days you were physically present in the U.S. over the last 3-4 years.
- EXCEPTIONS to the Substantial Presence Test:
- F or J students receive 5 “exempt”** years. Not exempt from tax, but of counting physical days of presence in the U.S. towards Substantial Presence Test.
- J Non-Students (including Non-Degree Visiting Students) receive 2 “exempt”** years (of the past 6 years).
- **“Exempt” years are CALENDAR years, not years from date of arrival (e.g. if you arrived 8/23/2016, 2016 would be counted one, total calendar year).
What now? Next Steps After Figuring Out Your Status
Once you’ve determined your tax residency status above, you can figure out how to file your tax documents:
- Tax Filing: Residents for Tax Purposes
- Tax Filing: Non-residents for Tax Purposes
What is a Dual-Status Alien?
In the year of transition between being a nonresident and a resident for tax purposes, you are generally considered a Dual-Status Taxpayer. A Dual-Status Taxpayer files two tax returns for the year—one return for the portion of the year when considered a nonresident, and another return for the portion of the year considered a resident. In some situations, a taxpayer can elect to be treated as a full-year resident in the transition year to avoid having to file two separate returns. If you think you may be a Dual Status Alien, you should visit the IRS website for more information. Dual-Status Alien income tax returns are “out of scope” (cannot be completed) by our UConn VITA program.
Are you an “immigrant” (Lawful Permanent Resident) of the United States under the immigration laws of the United States? Aliens who are Immigrants are Resident Aliens of the United States for tax purposes, under the condition that they spend at least one day in the United States. If you answered yes to the above question, you have passed the “Green Card Test.”