Tax
Substantial Presence Test
The day-count test that makes a non-citizen a U.S. tax resident: at least 31 days in the current year and at least 183 weighted days over three years, counting all of this year's days, one-third of last year's, and one-sixth of the year before.
U.S. tax residency for anyone without a green card turns on physical presence. You are a resident alien for the year if you were in the U.S. at least 31 days during the year and the weighted total of days over the current and two preceding years reaches 183. Days are weighted at one for the current year, one-third for the prior year, and one-sixth for the year before that. A green card holder is a resident regardless of days.
Certain days do not count. Students on F, J, M, or Q visas are exempt individuals for their first five calendar years and teachers or trainees on J or Q visas for two of the last six, provided Form 8843 is filed. Days you could not leave because of a medical condition that arose in the U.S., transit days under 24 hours, and days commuting from Canada or Mexico are excluded. Someone who meets the test but was present fewer than 183 days in the current year can still claim nonresident status by showing a closer connection to a foreign tax home on Form 8840, unless a green card application is pending.
The arrival year and the departure year are usually dual-status: nonresident for part of the year, resident for the rest. Dual-status filers cannot use the standard deduction or file jointly, which is why the first-year choice and the election to treat a nonresident spouse as a resident are often used to file as full-year residents, at the cost of reporting a full year of worldwide income. The day residency begins is also the day the foreign reporting stack (FBAR, Form 8938, Form 8621, Form 3520, Form 5471) switches on.
Common pitfalls
- Counting student years without having filed Form 8843; the exemption has to be claimed
- Assuming immigration status and tax residency match; an H-1B holder is typically a tax resident while remaining a nonimmigrant
- Electing full-year residency in the arrival year without measuring the foreign income it pulls into the U.S. return
- Letting departure-year residency run to December 31 by default, which can tax a full year of post-move foreign income
Related service
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Federal, state, and local returns prepared and reviewed by a licensed CPA, with the planning done before year-end rather than after it.