Chapter 2. What is my residency status for federal income tax purposes?

The most crucial step in filing your taxes is to determine your residency status for federal income tax purposes. You should be considered as either a non-resident alien or a resident alien for U.S. tax purposes. To find out which one you are, you need to decide if you are 'exempt' or if you meet the 'substantial presence test'.

 

How to

As a rule of thumb, you are "Exempt" from counting days of presence in the U.S.A if you are a student or a scholar entering the USA temporarily on a visa type, (F, J, M, or Q). You do NOT count your days of presence in the USA for specified periods of time.

  • F-1 and J-1 students maintaining status are exempt from the substantial presence test for 5 years. You can start using the substantial presence test in your 6th year to determine if you qualify to file your tax as a resident alien instead of a non-resident alien for tax purposes.  
  • Teachers and trainees on J1 or Q visas are exempt from the substantial presence test for up to 2 years. Those in their 3rd year can use the substantial presence test to determine residency for tax purposes. 

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

  1. 31 days during the current year, and
  2. 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.

This is only for tax purposes! Having a substantial presence in the U.S. means a non-resident alien will be considered a resident alien for tax purposes only.

 

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It is advisable you check out Publication 519 - US Tax Guide for Aliens, issued by the US Department of Treasury, Internal Revenue Service https://www.irs.gov/uac/about-publication-519 Links to an external site. to fully understand your fiscal obligation under the US Tax Laws. 

 

Practice

Now that you might feel more at ease with your status, think of paying it forward and discuss your residency status for tax purposes with a friend or a family member.

 

Congratulations! You can move on to Chapter 3. Which documents am I most likely to receive as a non-resident alien?

To review the full module on Federal Tax for Internationals, click here.