Tax & Accounting Blog

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 8 – Exempt Individuals

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 8 – Exempt Individuals

Exempt Individuals are exempt from counting U.S. days for purposes of determining substantial presence in the U.S., nothing more. They are not exempt from tax because of their status as Exempt Individuals, although such Exempt Individuals are frequently exempt from income tax under a Code or tax treaty provision. To avoid this confusion, the IRS … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 7 – Substantial Presence Test

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 7 – Substantial Presence Test

Foreign nationals who are not green card holders (also called nonimmigrants) who are substantially present in the U.S. over a period of years are also resident aliens. Nonimmigrants are substantially present if their countable U.S. days (including partial days) over three calendar years equal or exceed 183 days based on a formula. The 183-day formula … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 6 – Green Card Test

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 6 – Green Card Test

Foreign nationals who are green card holders are residents for income tax purposes unless they have never actually been physically present in the U.S. in that status. Green card holders are resident aliens from their first day of physical presence in the U.S. in that status or earlier if they became resident aliens under the … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 5 – Resident or Nonresident Alien

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 5 – Resident or Nonresident Alien

Foreign nationals are nonresident aliens for U.S. income tax purposes unless they meet one of two tests: 1) the U.S. lawful permanent resident test (also called the green card test) or 2) the substantial presence test. Foreign nationals who change immigration status during the calendar year, or who first enter the U.S. after January 1, … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 4 – Tax Impact of Loss of Immigration Status

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 4 – Tax Impact of Loss of Immigration Status

U.S. lawful permanent residents, also called immigrants or green card holders, who are long-term residents and who have lost their U.S. green card status by revocation or abandonment (whether intentionally or inadvertently) might be subject to a departure tax and/or special tax and reporting rules depending on the date that they lost their U.S. status … Read More

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 3 – U.S. Tax Return Obligations for Nonresident Aliens

Foreign Nationals: Resident Alien or Nonresident Alien and Why It Matters: Part 3 – U.S. Tax Return Obligations for Nonresident Aliens

Tax return filing obligations for nonresident aliens depend on the type of income that they have during the tax year – ECI, FDAP income, or both.  Nonresidents with No ECI. Nonresident aliens whose only U.S.-source income is FDAP income on which the correct amount of tax has been withheld (including applicable tax treaty reductions or … Read More