Determining U.S. Residency to file taxes in the U.S

            Individuals who are not US citizens are considered ‘aliens’ further there are resident aliens and non-resident aliens. For the purpose of 2013 filing if you are considered as a ‘Non-resident alien’. You will be taxed in the U.S only on your US income and not your World income. And you will have to file a tax return for 2013. Tax payers’ status on the last day of the year (and not the day he/she files his tax return) determines whether he is a resident alien or a non-resident alien for the tax year.


            An alien taxpayer (US Non-citizen) is considered as Resident taxpayer if he/she qualifies the substantial presence test. 

            He/she has a Green Card 

            or 

            he/she is physically present in the US for 31 days in the current year and at least 183 days during the last 3 years including the current year. 


            If are not a U.S Citizen and you do not fulfill any of the above stated 2 conditions then you will considered a Non Resident Alien.


            If the non-resident alien is married to a US Citizen or resident alien he/she qualifies to file as a resident alien even if he/she does not meet the substantial presence test. Most international students and their family members are considered as non-resident aliens for the purpose of tax filing as they are on a temporary education related visa.


            Non-resident aliens are taxed only on their U.S income. Active income such as wages or business income of non-resident alien is taxed at the same rate as resident alien whereas the passive income such as interests, dividends, rents is taxed at flat 30% for non-resident aliens. They also have to use a slightly modified filing form.


            F-1 and J-1 visa holders (mostly students) are exempt from counting days toward Substantial Presence for their first 5 calendar years in the U.S. and J-1 postdoctoral scholars are exempt for their first 2 calendar years in the U.S; this means they are considered as Non-Resident Aliens for 5 and 2 calendar years respectively.

            Updated: 23 Dec 2014 05:46 PM
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