International Corner

Am I a resident alien or nonresident alien while I am working in the United States?

Resident Alien

• Definition: A resident alien is a non-U.S. citizen who meets either the Green Card Test or the Substantial Presence Test, qualifying them as a resident for tax purposes.

• Green Card Test: The person holds a lawful permanent resident status (a green card) at any time during the tax year.

• Substantial Presence Test: The person has been physically present in the U.S. for:

• At least 31 days during the current tax year, and

• A total of 183 days during the current and previous two years (calculated using a specific formula).

• Tax Responsibilities:

• Treated similarly to U.S. citizens for tax purposes.

• Required to report worldwide income on their U.S. tax return.

• Eligible for tax benefits such as standard deductions and credits.

• Form to File: Typically, resident aliens file a Form 1040.

Nonresident Alien

• Definition: A nonresident alien is a non-U.S. citizen who does not meet either the Green Card Test or the Substantial Presence Test.

• Tax Responsibilities:

• Only taxed on income from U.S. sources or income effectively connected with a U.S. trade or business.

• Not required to report income earned outside the U.S., unless connected to U.S. activities.

• May not be eligible for standard deductions and certain tax credits.

• Form to File: Typically, nonresident aliens file a Form 1040-NR.

If I am filing with the tax treaty benefit, am I a resident alien or nonresident alien?

If filing using a tax treaty, you are considered a nonresident alien for tax purposes even though you pass the substantial presence test. For everything else, you are considered a resident alien. 

I am on an H1B Visa. What type of tax return do I file?

If you pass the substantial presence test, then you will file a Form 1040 for your taxes. If you do not pass the substantial presence test, then you will file Form 1040NR for nonresident aliens.

I am a resident alien and I have income sources in my home country. Do I have to declare the income on my US tax return?

As a resident alien, you are required to disclose your worldwide income on your US tax return and possibly pay taxes on the income. However, you may be eligible for the Foreign Earned Income Exclusion.

What is the Foreign Earned Income Exclusion?

The Foreign Earned Income Exclusion allows a U.S. Citizen and qualifying resident aliens who have sourced income, or live and work abroad to exclude up to $126,500 of their foreign-earned income from U.S. taxation for 2024.

Nonresident 2025