Tax Determination for Resident and Nonresident Aliens

Many aliens live in the United States. You may be wondering how the income tax laws apply to them.

The answer depends on the classification of the alien. The following provides an overview of how to determine which tax laws apply to aliens.

What is an alien?

An alien is an individual who is not a citizen of the United States. Aliens can be either resident or nonresident aliens.

Resident aliens must pay income tax on their income regardless of where they earn it in the world. This requirement is the same for resident aliens as it is for United States citizens.

Nonresident aliens must pay income tax only on certain income earned in the United States.

How can I determine if I am a resident or a nonresident alien?

There are two tests to determine if you are a resident or a nonresident alien. If you pass either of the tests, you are a resident alien.

Green Card Test

You are considered a resident alien if you are a lawful permanent resident of the United States anytime during the calendar year. A lawful permanent resident is one who has, by following the immigration laws, been given the privilege of residing in the United States permanently as an immigrant. Immigrants are typically recognized as having permanent residency by receiving from the United States Citizenship and Immigration Services an alien registration card. An alien registration card is more commonly referred to as a green card.

Resident aliens generally continue to hold this status unless the status is taken away by a judicial order or they file to abandon their residency status.

Substantial Presence Test

You are considered a resident alien if you are physically present in the United States on at least:

  • 31 days during the calendar year, or
  • 183 days during the 3-year period ending in the current calendar year, with a day including any day during the current calendar year when you were physically present; one-third of the days in the previous calendar year when you were physically present; and one-sixth of the days in the calendar year two years previous when you were physically present.

Those who commute to work in the United States from Canada or Mexico are not considered to be physically present in the United States, so long as they make such a commute on at least 75% of the workdays during the period.

You can be both a resident and a nonresident alien in the same tax year. Such individuals are known as dual-status aliens. Aliens are typically a dual-status alien in the year they arrive in or the year they depart from the United States. There are special tax rules that apply to dual-status aliens.

How is the spouse of a nonresident alien treated for income tax purposes?

If a United Status citizen or resident alien is married to a nonresident alien at the end of a tax year, you can elect to treat the nonresident alien as a United States resident. By making such an election, your worldwide income is taxable in the United States and you must file a joint tax return.

Where can I get specific guidance on taxes as a nonresident alien?

If you have additional tax questions concerning preparation of your income tax return as a nonresident alien, you can get help from a tax attorney. A tax attorney has the specialized training necessary to answer tax questions related to a nonresident alien status and will be able to help with your situation.

You can get help today by calling the telephone number located at the top of this web site or by completing the form below. The initial consultation with a tax attorney is free of charge and does not obligate you to anything further. Therefore, you have every reason to get the help you need today.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.