Residency Status

Why Residency Status Is Important

The first thing you must know in order to file your tax return is whether you are a resident or nonresident for U.S.tax purposes. The designation of resident for tax purposes is completely separate from your immigration status. You might qualify as a resident for tax purposes and remain a nonimmigrant alien for immigration purposes. If you find that you are both a resident and nonresident in the same year, you are a dual status alien for which special rules apply.

If you are a nonresident, you will file a special tax form, pay tax only on U.S.source income, be subject to special rates, and may qualify for treaty exemptions. If you are a resident for U.S.tax purposes, you are under the same rules and file the same forms as a U.S.citizen. That means you pay tax on your worldwide income rather than just U.S. source income.

Determining Your Residency Status

IRS Publication 519, U.S. Tax Guide for Aliens, will be extremely helpful in determining your resident status.  The first few pages explain the two tests for determining whether you are a resident or nonresident alien: The green card test and the substantial presence test. There are several other determinations to be considered, and below are links to the various residency status classifications.