US Tax Residency (Non-Citizens)

Core rule

• Resident alien determination — For non-US-citizens, US tax residency (as a "resident alien") is determined by two tests. Meet either test → resident alien (taxed on worldwide income like a US citizen). Meet neither → non-resident alien (taxed only on US-source income).
• Citizens and green-card holders always residents — US citizens and green-card holders are ALWAYS US tax residents regardless of where they live. This skill covers non-citizens on temporary visas only.

Test 1: Green Card Test

• Green Card Test — A person who holds a lawful permanent resident (LPR) / green card is a US resident alien for tax purposes for the entire year, regardless of days present.
• Residency end via green card revocation/abandonment — Residency ends when the green card is revoked or abandoned (USCIS Form I-407). Abandonment may trigger the expatriation exit tax — see us-expatriation-exit-tax.

Test 2: Substantial Presence Test (SPT)

• Substantial Presence Test 3-year weighted formula — Days this year × 1 + Days last year × 1/3 + Days 2 years ago × 1/6 ≥ 183
• SPT threshold — 183 days (3-year weighted formula total)
• Minimum current-year presence — 31 days (Must also be present at least 31 days during the current year)
• Days that do NOT count — Days as an exempt individual (certain F, J, M, Q visa holders; diplomats; commuters from Canada/Mexico); Days unable to leave due to medical condition that arose in the US

Closer Connection Exception

• Closer Connection Exception conditions — Even if SPT is met, the person is not a resident alien if: Present in the US for fewer than 183 days in the current year, AND Has a tax home in a foreign country, AND Has a closer connection to that country (family, bank accounts, driving licence, social memberships, etc.)
• Filing requirement for Closer Connection Exception — Filed on Form 8840 (due 15 June for prior year).

First-Year Election

• First-Year Election eligibility — A non-resident alien who does not meet SPT in the current year but meets SPT in the following year can elect to be treated as a US resident from a qualifying date in the current year.
• First-Year Election conditions and filing — Conditions: present at least 31 consecutive days and 75% of days from qualifying date to 31 December. Filed with Form 1040 + statement.

Treaty Tie-Breaker

• Treaty tie-breaker test order — If a person is a resident of both the US and a treaty country under each country's domestic rules, the treaty tie-breaker (Article 4 of most DTAs) determines residence: 1. Permanent home 2. Centre of vital interests 3. Habitual abode 4. Nationality 5. Competent authority
• Treaty-based position filing — File Form 8833 to claim treaty-based position.

Dual-Status Returns

• Dual-status return structure — In the year of arrival or departure, a person may be a resident for part of the year and a non-resident for the rest. A dual-status return covers both periods: Resident period: worldwide income taxed; Non-resident period: only US-source income taxed
• Restrictions on dual-status returns — Cannot use standard deduction; cannot file jointly (unless making election to be treated as full-year resident).

When US residency ends

• Residency termination date — Residency terminates on the last day of the year the person was present in the US as a resident, unless a closer connection exception applies.
• Year of departure analysis — Important: The year of departure requires careful analysis — if SPT is met for the year, the person may be a US resident for the full year even after physically leaving mid-year.

Sources

• IRC §7701(b) — definition of resident alien
• IRS Publication 519 (US Tax Guide for Aliens)
• Form 8840 (closer connection), Form 8833 (treaty-based position)
• Form 1040-NR (non-resident alien return)

Working paper only. Immigration status and tax status are separate; holding a US work visa does not automatically make you a tax resident. Have a qualified US CPA or tax attorney review the specific visa category and day count.