Foreign Nationals

We cover specific foreign national assignment questions from corporate human resource, tax, and legal departments.

Tax Residence

I do not have a Permanent Resident visa (Green Card). How can I be a resident of the US?

Residence for tax purposes is determined differently for tax than for immigration purposes. It is possible to be an illegal alien in the US and still be subject tax as a resident.

I do have a Green Card. When did my tax residence begin?

Your tax residence begins at the earlier of the date that you enter the US as a permanent resident (or application for such has been approved) or meet the definitions applicable to other visa holders. A Permanent Resident is always a tax resident by definition. See Pemanent Resident for more information.

How is tax residence determined?

Tax residence is typically determined based on the number of days that you spend in the US during the current and 2 previous years. This is called the substantial presence test and explained in more detail at Substantial Presence Test. Exceptions apply to these rules for certain students, trainees and foreign government employees. Some tax treaties define residence in a different manner.

When does my tax residence start?

Your tax residence starts on the first day you were in the US. Up to 10 days may be disregarded for de minimus travel.

You moved to the US on May 1, 2011, and stayed through the end of the year. Your only visit prior to the move was from February 1 to February 7, 2011. Your residence would start on May 1, 2011. The 7 days in February would be disregarded for this purpose. (If you worked during the February trip, then you will need to pay tax on the income earned - even if it was paid outisde the US by a foreign employer.

Same facts as above except your first trip to the US was from February 1 to February 14, 2011. Your tax residence would begin on February 1 and continue through the end of the calendar year. You would be subject to tax on your worldwide income from February 1 onwards.

When does my tax residence end?

Your tax residence ends no earlier than the last day you were in the states that year. Up to 10 days may be disregarded in the same manner as discussed in residence start date.

You were a resident of the US for all of 2010. You left the US on April 1, 2011, and have not returned. You will be a tax resident through April 1, 2011, and a nonresident for the remainder of the year.

Same facts as above except that you returned to the states for vacation from December 1 to December 15, 2011. You would be taxable on your worldwide income through December 15th.

I am also a tax resident in a country that has a tax treaty with the US. Will I be taxable as a resident in both countries?

Most US tax treaties contain a provision that defines tax residence. The typical treaty uses a "tie-breaker" provision so that only one country considers you a resident. Often, the treaty will use your location of permanent residence, job location, family location, and other factors to determine the country of residence during that period. Form 8833 may need to be attached to your US tax return showing that you are claiming a treaty position.