![]() See Conditions for a Closer Connection to a Foreign Country. income tax purposes by satisfying the “closer connection” exception to the Substantial Presence Test. For details on the 3-year look-back formula refer to Substantial Presence Test.Īn H-1B alien who otherwise meets the Substantial Presence Test can nevertheless be treated as a nonresident for U.S. Generally, an H-1B alien who spends 122 days in the United States in each year of the 3-year period will meet the Substantial Presence Test for the current calendar year and be considered a U.S. Unless some other exception applies, an H-1B alien must count every day of physical presence in the United States for purposes of the Substantial Presence Test. days of presence do not apply to H-1B aliens. There are exceptions to this rule where certain days of physical presence in the United States do not count, including days a nonimmigrant is an “exempt individual.” However, the rules allowing an “exempt individual” to exclude U.S. For purposes of this 183-day test, any part of a day that a nonimmigrant alien is physically present in the United States is counted as a day of presence. The Substantial Presence Test is a mechanical test based on counting a nonimmigrant alien’s days of physical presence in the United States under a 3-year “look-back” formula. For more information on this choice, refer to the discussions on “First-Year Choice” and “Nonresident Spouse Treated as a Resident” in Publication 519, U.S. Under certain circumstances, an H-1B alien who fails to meet the Substantial Presence Test may be able to choose to be treated as a U.S. The test is applied on a calendar year-by-calendar year basis (January 1 – December 31). resident for federal income tax purposes if he or she meets the Substantial Presence Test. Generally, an alien in H-1B status (hereafter referred to as “H-1B alien”) will be treated as a U.S. citizens on their worldwide income, and nonresident aliens (with certain narrowly defined exceptions) are taxed only on income which is derived from sources within the United States and/or income that is effectively connected with a U.S. Resident aliens are taxed in the same manner as U.S. For tax purposes, there are two types of aliens: resident and nonresident aliens. ![]() ![]() Tax Residency StatusĪlthough the tax residency rules are based on the immigration laws concerning immigrant and nonimmigrant aliens, the tax rules define residency for tax purposes in a way that is very different from U.S. Citizenship and Immigration Services (“USCIS”) website ( I. It is important to distinguish between H-1B status and J-1 status because the tax consequences under each status are significantly different.įor more information about the H-1B immigration status, visit the U.S. Note, however, aliens may reside in the United States for purposes of teaching under several different immigration status classifications, including H-1B status and J-1 status. The H-1B status permits a qualified nonimmigrant alien, i.e., an alien who is not a lawful permanent resident (also known as a “green card holder”), to reside in the United States to perform services in a specialty occupation (including teaching), services of exceptional merit and ability relating to a Department of Defense cooperative research and development project, or services as a fashion model of distinguished merit or ability. H-1B Status (Specialty Occupations and Fashion Models)
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