How Your Immigration Status Will Affect Your Taxes

Even if you don’t consider Uncle Sam to be your uncle, you still owe him taxes every April 15. It’s part of living in the United States. As the old saying goes, all you really have to do is die … and pay taxes. However, how much will you owe? Of course that depends on your income, but it also depends on your IRS-deemed immigration status. Lean how your immigration status will affect your taxes this year.

There are two types of “aliens” according to the Internal Revenue Service. (NOTE – The IRS doesn’t go by the same “rules” as the USCIS in this regard. They classify immigrants differently.) There are “resident aliens” and “nonresident aliens.” So, which type are you? The IRS default answer is “nonresident alien.” In order to be considered a “resident alien,” you must pass a test – either the “substantial presence test” or the “green card test.” And you thought you were done with school!

Substantial Presence Test

In order to qualify as a resident alien, you need to have been present in the United States:

* A minimum of 31 days during the current year; and

* At least 183 days during the 3-year period that includes the current year and the 2 preceding years.

To get to 183 days, the IRS counts each day you were present of the current year, only one-third of the days you were present the year before and one-sixth of the days you were actually present the year before that. So it’s possible that you could be in the U.S. 120 days this tax year, last year and the year before and still not qualify as a resident alien.

Green Card Test

This one is pretty simple: if you are a Green Card holder at any time during the calendar year, you are a resident alien for tax purposes. There are a few exceptions if your status changes, but for most people with a Green Card means residency status as far as the IRS is concerned.

Resident aliens have basically the same tax expectations as citizens. What does this mean? It means that even if you’re in the country without a Green Card you owe taxes. And, what’s more, if you don’t pay taxes, you could have trouble getting a Green Card or becoming a citizen in the future.

If you’re concerned about what this could mean for you and your status, contact us today. We’ll be happy to answer any questions.