Substantial Presence Test
What is the Substantial Presence Test?
The substantial presence test is a formula based on the number of days spent in the US to determine tax residence. If the sum of the number of days exceeds 183 days, you are presumed to be a tax resident. The formula is:
Current Year Days in the US X 1
Last Year's Days X 1/3
2nd Previous Year's Days X 1/6
You spent 120 days in the US during the year and 2 previous calendar years. The calculation under this test would be:
Current Year - 120 X 1 = 120
Last Year - 120 X 1/3 = 40
2nd Previous Year - 120 X 1/6 = 20
Total = 180
Because the total is less than 183, you are not a resident under the substantiall presence test.
I was in the US for less than 183 days in the current year but still meet the substantial presence test. Are there any exceptions?
The closer connection exception may provide relief for visitors who spend often travel to the US but spend less than 183 days each year in the country. The closer connection exception may provide relief if your "center of vital interests" is in another country. Form 8840 must be attached to your nonresident tax return to claim this exception.
I was in the US on an F-1 visa. Does the substantial presence test apply?
You can claim an exception to the substantial presence test if you were in the US as a student for not more than 5 out of the last 6 years. The student may ask the IRS to grant nonresident status for longer period if it is shown that you do not intend to permanently reside in the US. Form 8843 should be attached to your tax return to claim this exception. Before submitting this form, you should prepare your tax return as both a resident and a nonresident. The additional deductions and/or the married filing joint tax rates available only to a resident may provide a lower tax liability.
I could not leave the because I became sick. My illnes caused me to have more than 183 days under the sustantial presence test. Do any exceptions apply?
If you could not leave the US because you became ill, then the days from the start of the illness until you left the US doe not apply to the formular for the substantial presence test. The exception does not apply to the days before you became ill. If you came to the states for medical treatment, this exception does not apply. Form 8843 should be attached to your tax return to claim this exception.
I was government employee in the US on an A, G, NATO or similar visa. Does the substantial presence test apply? Do I need to file a tax return to claim this exception?
Employees of foreign governments on these visas are exempt from the residence tests and do not need to file a return or other form to claim an exception.
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