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Foreign National Information
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U.S. Income Tax Obligation While Living in the U.S. as a Foreign
National
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Your tax obligation to the U.S. depends on which type of foreign
national you are considered to be. Resident aliens are required to
follow the same rules and fill out the same forms as U.S. citizens.
Nonresident aliens who receive wages or business income while in the
U.S. are required to file a tax return. Dual-status aliens must
file a separate return, cannot claim the standard deduction, and
generally cannot claim dependency exemptions.
Resident Alien
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A resident alien is an
individual that is not a citizen or national of the United States and
who meets either the green card test or the substantial presence test
for the calendar year. Generally, the days the resident alien is in the
United States as a teacher, researcher, student, trainee, exchange
visitor, or cultural exchange visitor on an "F", "J", "M", or "Q visa
are not counted. This exception is for a limited period of time.
Non-Resident Alien
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A nonresident alien is an individual who is not a U.S. citizen
or a resident alien. A resident of a foreign country under the
residence article of an income tax treaty is a nonresident alien
individual for purposes of withholding.
Nonresident alien individuals married to U.S. citizens or residents
may choose to be treated as resident aliens for certain income tax
purposes. However, these individuals are still subject to the NRA
withholding rules that apply to nonresident aliens for all income
except wages. Wages paid to these individuals are subject to the
withholding rules that apply to U.S. citizens and residents and not
the NRA withholding rules.
Dual Status Alien
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You are a dual–status alien if you are both a resident alien and a
nonresident alien during the same tax year. This usually occurs in
the year you arrive in or depart from the United States. In
determining your United States income tax liability for a year you
are a dual–status alien, different rules apply for the part of the
year you are a resident alien and the part of the year you are a
nonresident alien.
For your first year as a resident
alien, your residency starting date determines the period for which
you will be taxed as a resident alien and the period for which you
will be taxed as a nonresident alien. You may qualify as a resident
alien under either the substantial presence test or the green card
test. If you meet the substantial presence test, your residency
starting date is generally the first day you are present in the
United States during that calendar year. If you meet the green card
test at anytime during the calendar year, but do not meet the
substantial presence test for that year, your residency starting
date is the first day on which you are present in the United States
as a lawful permanent resident.
The Green Card Test
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You are a Lawful Permanent Resident of the United States, at any
time, if you have been given the privilege, according to the
immigration laws, of residing permanently in the United States as an
immigrant. You generally have this status if the U.S. Citizenship
and Immigration Service (USCIS) has issued you an alien registration
card, also known as a "green card." You continue to have resident
status, under this test, unless you voluntarily renounce and abandon
this status in writing to the USCIS, or your immigrant status is
administratively terminated by the USCIS, or your immigrant status
is judicially terminated by a U.S. federal court. If you meet the
green card test at anytime during the calendar year, but do not meet
the substantial presence test for that year, your residency starting
date is the first day on which you are present in the United States
as a Lawful Permanent Resident. However, an alien who has been
present in the United States at any time during a calendar year as a
Lawful Permanent Resident may choose to be treated as a resident
alien for the entire calendar year.
The Substantial Presence Test
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To meet the substantial presence test, you must be physically
present in the U.S. (during a period you do not hold an F, J, M or Q
visa) for at least:
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31
days during the current year, and
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183 days during the 3-year period
that includes the current year and the previous two years,
counting:
...all of the days you
were present in the current year, and
...1/3 of the days you
were present in the first preceding year, and
...1/6 of the days you
were present in the second preceding year.
Definition of Exempt Individual
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An exempt individual is someone whose days in the U.S. are not
counted toward the substantial presence test, not someone who is
exempt from tax. If you are an exempt individual, you are a
nonresident alien until you are no longer an exempt individual, or
until you receive permanent residency status.
Nonresident Spouse Treated as a
Resident
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If one spouse is a resident for tax purposes at the end of the year,
and the other spouse is a nonresident, you can elect to treat both
spouses as residents for the entire year. This rule applies even if
the spouse who is a resident at the end of the year is a dual-status
alien (a nonresident at the beginning of the year).
U.S. Social Security Taxes
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Immigrants will be subject to U.S. Social Security taxes if they
work while in the U.S. Blanket exemptions from social security tax
are generally available only to those on F, J, M or Q student or
faculty visas, and only if the work relates to their teaching or
learning program. The exemption extends only to the primary visa
holder; children and spouses of the primary visa holder are not
exempt from social security taxes. Also, persons with E, H and L
visas are generally subject to U.S. Social Security taxes. All of
these rules are subject to modification under the treaty (if one
exists) between the U.S. and the immigrant's country of citizenship.
Deadlines for Filing Returns
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If you worked and earned wages in the U.S., you must file your
federal and state tax returns (if required) by April 15 of the
following year. If you received only scholarship income, or received
no U.S. source income during the year, you must file your federal
tax return by June 15 of the following year.
Regardless of the fact that an extension is automatically given,
interest will be charged on any balance that is due to the IRS
starting on April 15th.
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