Defining Resident or Nonresident
Since resident and nonresident aliens are taxed differently, it is important to determine the residency status. One is considered a nonresident alien for any period that the person is neither a U.S. citizen nor a U.S. resident alien.
One is considered a resident alien if s/he meets one of two tests for the calendar year.
The first test is the green card test. If at any time during the calendar year the person was a lawful permanent resident of the United States, according to the immigration laws, and this status has not been rescinded, or administratively or judicially determined to have been abandoned, s/he is considered to have met the green card test.
The second test is the substantial presence test. To meet this test, one must have been physically present in the United States on at least 31 days during the current year, and 183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count all of the days s/he was present in the current year, and one-third of the days s/he was present in the first year before the current year, and one-sixth of the days s/he was present in the second year before the current year. Do not count any day s/he was present in the United States as an exempt individual. An exempt individual may be anyone in the following categories:
| A foreign government-related individual, |
| A teacher or trainee with a J or Q visa who substantially complies with the requirements of the visa, |
| A student, with an F, J, M, or Q visa who substantially complies with the requirements of the visa; or |
| A professional athlete temporarily present to compete in a charitable sports event. |
Also, do not count any day the person was present in the United States only because of a medical condition. Even if one meets the substantial presence test, one can be treated as a nonresident alien if one is present in the United States for fewer than 183 days during the current calendar year, and one maintains a tax home in a foreign country during the year, and one has a closer connection to that country than to the United States.
This does not apply if the person has applied for status as a lawful permanent resident of the United States, or the person has an application pending for adjustment of status. Sometimes, a tax treaty between the United States and another country will provide special rules for determining residency. An alien whose status changes during the year from resident to nonresident, or vice versa, generally has a dual status for that year, and is taxed on the income for the two periods under the provisions of the law that apply to each period.
If one is a nonresident alien, one must file Form 1040NRor Form 1040NR-EZ. if one is engaged in a trade or business in the United States, or has any other U.S. source income on which the tax was not fully paid by the amount withheld. If one has wages subject to income tax withholding, the return for 1999 is due by April 17, 2000, provided one files on a calendar-year basis. If one did not have wages subject to withholding and file on a calendar-year basis, one is required to file his or her 1999 return by June 15, 2000. File Form 1040NR or Form 1040NR-EZ with the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255-0002.
If one is a resident alien, one must follow the same tax laws as U.S. citizens. One is taxed on income from all sources, both within and outside the United States. One will file Form 1040EZ, 1040A, or 1040 depending on his or her tax situation. The return for 1999 is due by April 17, 2000, and should be filed with the service center for his or her area.