Federal Taxation of Aliens Working in the United States Page: 2 of 6
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governments, business visitors and tourists, aliens in transit through the United States,
crew members of ships and aircraft, and employees of international organizations. While
these individuals are usually admitted into the United States under certain visas (A-, B-1
and B-2, C-, D-, and G-visas, respectively), these individuals generally qualify for the
exceptions based on their employment, not visa category.
Resident or Nonresident Alien
For federal income and employment taxation purposes, alien individuals are
classified as resident or nonresident aliens.3 The classification has important
consequences for determining whether income is subject to U.S. taxation, the appropriate
tax rate, and whether an individual is covered by a tax treaty. In general, an individual is
a nonresident alien unless he or she meets the qualifications under either residency test:
" Green card test: the individual is a lawful permanent resident of the
United States at any time during the current year (i.e, has an alien
registration card), or
" Substantial presence test: the individual is present in the United States for
at least 31 days during the current year and at least 183 days during the
current year and previous two years. For computing the 183 days, a
formula is used that counts all the qualifying days in the current year, 1/3
of the qualifying days in the immediate preceding year, and 1/6 of the
qualifying days in the second preceding year.4
There are several situations in which an individual may be classified as a nonresident
alien even though he or she meets the substantial presence test. For example, an
individual will be treated as a nonresident alien if he or she has a closer connection to a
foreign country than to the United States, maintains a tax home in the foreign country, and
is in the United States for fewer than 183 days during the year.5 Another example is that
an individual in the United States under an F-, J-, M-, or Q-visa may be treated as a
nonresident alien if he or she has substantially complied with visa requirements.6 Other
RL31381, U.S. Immigration Policy on Temporary Admissions, by Ruth Ellen Wasem.
3 It is possible for an individual to be a resident alien and a nonresident alien during the same
year. For an explanation of the rules on determining residency starting and termination dates and
on dual-status filing, see IRS Publication 519: U.S. Tax Guide for Aliens.
4 IRC 7701(b)(1)(A) and (b)(3). A nonresident alien may qualify to be treated as a resident
alien if the substantial presence test is met in the year following the election. IRC 7701(b)(4).
A dual-status or nonresident alien married to a U.S. citizen or resident may qualify to be treated
as a resident alien for the entire year. IRC 6013(g) and (h).
s IRC 7701(b)(3)(B).
6 IRC 7701(b)(5). There are limits on how long an individual may be exempt from the
substantial presence test. Non-student J- or Q-visa holders are exempt for two or four years in
a six-year period, depending on their source of income. After five years, student F-, J-, M-, or
Q-visa holders must establish to the IRS that they do not intend to permanently reside in the
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Federal Taxation of Aliens Working in the United States, report, February 6, 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc817545/m1/2/: accessed October 15, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.