Alien Residency Examples

 

The following are examples of the application of the tax residency rules to various situations involving nonresident alien visitors to the United States and aliens temporarily present in the United States as students, trainees, scholars, teachers, researchers, exchange visitors, and cultural exchange visitors.

Example 1

W was a citizen and resident of a foreign country immediately prior to his entry into the United States. He is temporarily present in the United States as a graduate student at a university on an F-1 visa (student visa). He had never been in the United States before his arrival on 08-15-2015. Assuming W substantially complies with the requirements of his visa, does not change his immigration status, and remains in the United States throughout 2020, determine his residency starting date.

Solution:

Date of entry into United States: 08-15-2015
Student F-1 visa
Exempt individual for 5 calendar years (2015 through 2019)
To determine whether W meets the substantial presence test (183 days), begin counting days on 01-01-2020.
Number of nonexempt days in United States during 2020: 366 days

Count days as follows:

Current year (2020) days in United States (366) × 1 = 366 days
Prior year (2019) days in United States (0) × 1/3 = 0 days
Year before that (2018) days in United States (0) × 1/6 = 0 days
Total = 366 days

W meets the substantial presence test on 07-01-2020 (the 183rd day of 2020). W's residency starting date under IRC § 7701(b) is 01-01-2020 (the first day he was present in United States during the calendar year in which he met the substantial presence test).

Example 2

W's wife L, who had also never been to the United States before, arrived on the same day as W on an F-2 visa (spouse or dependent of a student on an F-1 visa). However, on 06-15-2017 she changed nonimmigrant status from F-2 to a Temporary Protected Status pursuant to an official announcement of the U.S. Citizenship and Immigration Services (USCIS). She received an Employment Authorization Document (EAD) from USCIS and went to work for a United States employer, who then petitioned USCIS on her behalf to secure her lawful permanent resident status. On 09-15-2018, USCIS approved her status as a lawful permanent resident of the United States and later issued her a green card under the routine procedures of the USCIS. Determine L’s residency starting date.

Solution:

Date of entry into United States: 08-15-2015
Date of change in status out of F-2: 06-15-2017
Exempt individual from 08-15-2015 through 06-14-2017
Begin counting days on 06-15-2017
Number of nonexempt days in United States during 2017: 200 days

Count days as follows:

Current year (2017) days in United States (200) × 1 = 200 days
Prior year (2016) days in United States (0) × 1/3 = 0 days
Year before that (2015) days in United States (0) × 1/6 = 0 days
Total = 200 days

L met the substantial presence test on 12-14-2017 (the 183rd day after 06-14-2017). L's residency starting date under IRC § 7701(b) is 06-15-2017 (the first day she was counted as being present in United States during the calendar year in which she met the substantial presence test). An "exempt individual" is never counted as being physically present in the United States for purposes of the substantial presence test. For tax purposes it does not matter that she later became a Lawful Permanent Resident on 09-15-2018 because she had already become a resident alien under the substantial presence test on 12-14-2017.

Example 3

Assuming the same facts as in Examples 1 and 2 above. What kind of federal income tax returns will both taxpayers file for 2019 and 2020?

Solution:

2019:
Option #1: W will file Form 1040NR as a nonresident alien, married filing separately. L will file Form 1040 as a resident alien, married filing separately.

Option #2: W and L may take advantage of the option allowed by IRC § 6013(g), Election to Treat Nonresident Alien Individual as Resident of the United States, to file a joint Form1040 for 2019 because L is a resident alien at the end of 2019. See Nonresident Alien Spouse Treated as a Resident Alien for more information on the election to treat a nonresident alien as a resident and file a joint return..

2020:
W and L may file a joint Form 1040 because both spouses are resident aliens for 2020, or each spouse may file Form 1040 as married filing separately.

Example 4

A was a citizen and resident of a foreign country just prior to his arrival in the United States. He is a research scholar at a university. He arrived in the United States for the very first time ever on 08-29-2018 on a J-1 visa. He has substantially complied with the requirements of his visa and has remained in the United States ever since. Assuming he has not changed to another immigration status, determine his residency starting date.

Solution:

Date of entry into United States: 08-29-2018
Research scholar J-1 visa
Exempt individual for 2 calendar years: 2018 and 2019
Begin counting days on 01-01-2020
Number of nonexempt days in United States during 2020: 366 days

Count days as follows:

Current year (2020) days in United States (366) × 1 = 366 days
Prior year (2019) days in United States (0) × 1/3 = 0 days
Year before that (2018) days in United States (0) × 1/6 = 0 days
Total = 366 days

A meets the substantial presence test on 07-01-2020 (the 183rd day of 2020). A's residency starting date under IRC § 7701(b) is 01-01-2020 (the first day he was present in United States during the calendar year in which he met the substantial presence test).

Which federal income tax returns will A file for 2018, 2019, and 2020?

2018:
Av will file Form 1040NR as a nonresident alien

2019:
A will file Form 1040NR as a nonresident alien.

2020:
A will file Form 1040 as a resident alien.

Example 5

G was a citizen and resident of a foreign country just prior to his arrival in the United States. He is an employee of a foreign corporation affiliated with a U.S. corporation. He arrived in the United States for the first time ever on 04-30-2018 on an L-1 visa to work for the affiliated U.S. corporation. He does not intend to leave the United States until 04-29-2021. Determine his residency starting date.

Solution:

Date of entry into United States: 04-30-2018
Nonexempt individual
Begin counting days on 04-30-2018 (date of arrival)
Number of days in United States during 2018: 246 days

Count days as follows:

Current year (2018) days in United States (246) × 1 = 246 days
Prior year (2017) days in United States (0) × 1/3 = 0 days
Year before that (2016) days in United States (0) × 1/6 = 0 days
Total = 246 days

G met the substantial presence test on 10-29-2018 (his 183rd day in the United States). G's residency starting date under IRC § 7701(b) is 04-30-2018 (the first day he was present in the United States during the calendar year in which he met the substantial presence test).

What kind of federal income tax returns will G file for 2018, 2019 and 2020?

2018:
G will file a dual-status tax return as a dual-status alien.

2019:
G will file Form 1040 as a resident alien.

2020:
G will file Form 1040 as a resident alien.

Example 6

R was a citizen and resident of a foreign country immediately prior to her arrival in the United States. She first arrived in the United States on 03-15-2018 as a tourist on a B-2 visa and remained continuously in the United States thereafter. In 2018 she enrolled as a student at a university, and, as a result, changed nonimmigrant status to F-1 (student) on 11-15-2018. Determine her residency status for 2018, 2019, and 2020.

Solution:
Analysis for 2018

Date of entry into United States: 03-15-2018
Nonexempt individual 03-15-2018 through 11-14-2018
Exempt individual 11-15-2018 through 12-31-2022
 (As a student on an F-1 visa, if she continues to substantially comply with the requirements of her visa, she will remain an “exempt individual” for 5 calendar years, 2018 through 2022.)
Begin counting days on 03-15-2018
Stop counting days on 11-14-2018

Number of nonexempt days in United States during 2018: 245 days
Number of exempt days in United States during 2018: 47 days

Count days as follows:

Current year (2018) days in United States (245) × 1 = 245 days
Prior year (2017) days in United States (0) × 1/3 = 0 days
Year before that (2016) days in United States (0) × 1/6 = 0 days
Total for 2018 = 245 days

R met the substantial presence test on 09-13-2018 (the 183rd day after her arrival in the United States). R's residency starting date under IRC § 7701(b) is 03-15-2018 (the first day she was present in the United States during the calendar year in which she met the substantial presence test).

Under the general rule, the residency ending date under the substantial presence test is December 31st of the year in which R ceases to be present in the United States. However, an exception is allowed for a residency ending date that is earlier than December 31 in an alien's last calendar year in the United States. Refer to Residency Starting and Ending Dates.

The exception would allow R's residency ending date to be the last day during the calendar year that she ceases to be present in the United States if, for the remainder of the calendar year:

  1. her tax home is in a foreign country (Rev. Rul. 93-86); and
  2. she maintains a closer connection to that foreign country than to the United States (Treas. Reg. § 301.7701(b)-2(d)).

If she had qualified for the exception, R's residency ending date under the exception to the general rule would have been 11-14-2018.

However, R does not qualify for the exception to the general rule for determining her residency ending date because, after 11-14-2018, she did not have a tax home in a foreign country, and she did not maintain a closer connection to a foreign country than to the United States.

Since R does not qualify for the exception to the residency ending date general rule, her residency ending date is 12-31-2018.

Analysis for 2019

Date of entry into United States: 03-15-2018
Nonexempt individual: 03-15-2018 through 11-14-2018
Exempt individual: 11-15-2018 through 12-31-2022 (provided she substantially complies with the requirements of her F-1 student visa)
Begin counting days on 03-15-2018
Stop counting days on 11-14-2018

Number of nonexempt days in United States during 2019: 0 days
Number of exempt days in United States during 2019: 365 days

Count days as follows:

Current year (2019) days in United States (0) × 1 = 0 days
Prior year (2018) days in United States (245 nonexempt days) × 1/3 = 81 2/3 days
Year before that (2017) days in United States (0) × 1/6 = 0 days
Total for 2019 = 81 days

R did not meet the substantial presence test for 2019. Per the Analysis for 2018 above, R's residency beginning date was 03-15-2018 and her residency ending date, under the general rule, was 12-31-2018. Since the substantial presence test is applied on a year-to-year basis, R is a nonresident alien for calendar year 2019.

Analysis for 2020

Date of entry into United States: 03-15-2018
Nonexempt individual: 03-15-2018 through 11-14-2018
Exempt individual: 11-15-2018 through 12-31-2022 (provided she substantially complies with her F-1 student visa)
Begin counting days on 03-15-2018
Stop counting days on 11-14-2018

Number of nonexempt days in United States during 2020: 0 days
Number of exempt days in United States during 2020: 366 days

Count days as follows:

Current year (2020) days in United States (0) × 1 = 0 days
Prior year (2019) days in United States (0) × 1/3 = 0 days
Year before that (2018) days in United States (245) × 1/6 = 40 5/6 days
Total for 2020 = 40 days

R does not meet the substantial presence test for 2020.

What kind of federal income tax returns will R file for 2018, 2019, and 2020?

2018:
R will file a dual-status tax return as a dual-status alien, since she is a nonresident alien from 01-01-2018 through 03-14-2018 and a U.S. resident alien under the substantial presence test from 03-15-2018 through 12-31-2018.

2019:
R will file Form 1040NR as a nonresident alien.

2020:
R will file Form 1040NR as a nonresident alien.

Example 7

K was a citizen and resident of a foreign country just prior to her arrival in the United States. She had never been to the United States prior to her arrival on 08-25-2018 as a student on an F-1 visa. On 02-02-2019 she married a United States citizen. On 03-01-2019 she petitioned USCIS for a change in immigration status to that of lawful permanent resident based upon her marriage. On 05-15-2020 USCIS approved her petition to become a lawful permanent resident of the United States and issued her a green card later in the year under the routine procedures of the USCIS. Determine her residency starting date.

Solution:
Analysis for 2018

Date of entry into United States: 08-25-2018
Exempt individual: 08-25-2018 through 05-14-2020
Begin counting days on 05-15-2020
Number of nonexempt days in United States during 2018: 0 days
Number of exempt days in United States during 2018: 129 days (08-25-2018 through 12-31-2018)

Count days as follows:

Current year (2018) days in United States (0) × 1 = 0 days
Prior year (2017) days in United States (0) × 1/3 = 0 days
Year before that (2016) days in United States (0) × 1/6 = 0 days
Total for 2018 = 0 days

K does not satisfy the substantial presence test in 2018.

Analysis for 2019

Date of entry into United States: 08-25-2018
Exempt individual: 08-25-2018 through 05-14-2020
Begin counting days on 05-15-2020
Number of nonexempt days in United States during 2019: 0 days
Number of exempt days in United States during 2019: 365 days

Count days as follows:

Current year (2019) days in United States (0) × 1 = 0 days
Prior year (2018) days in United States (0) × 1/3 = 0 days
Year before that (2017) days in United States (0) × 1/6 = 0 days
Total for 2019 = 0 days

K does not meet the substantial presence test for 2019 and K does not meet the green card test for 2019. The filing of a petition with USCIS does not constitute a change of status under immigration law.

Analysis for 2020

Date of entry into United States: 08-25-2018
Exempt individual: 08-25-2018 through 05-14-2020
Begin counting days on 05-15-2020.
Number of nonexempt days in United States during 2020: 231 days (05-15-2020 through 12-31-2020)
Number of exempt days in United States during 2020: 135 days (01-01-2020 through 05-14-2020)

Count days as follows:

Current year (2020) days in United States (231) × 1 = 231 days
Prior year (2019) days in United States (0) × 1/3 = 0 days
Year before that (2018) days in United States (0) × 1/6 = 0 days
Total for 2020 = 231 days

K meets the substantial presence test on 11-13-2020 (the 183rd day after 05-14-2020). She meets the green card test on 05-15-2020.

Since she was already in the United States when she became a lawful permanent resident (green card test), K’s residency starting date under IRC § 7701(b) is 05-15-2020, per both the green card test (the date USCIS changed her status to lawful permanent resident) and the substantial presence test (the first day she was present in the United States during the calendar year in which she met the substantial presence test). An "exempt individual" is never counted as being physically present in the United States for purposes of the substantial presence test.

What kind of federal income tax returns will K file for 2018, 2019, and 2020?

2018:
K will file Form 1040NR as a nonresident alien.

2019:
Option # 1. K will file Form 1040NR as a nonresident alien, married filing separately.

Option # 2. K will file a joint 1040 with her United Sates citizen spouse, whom she married on 02-02-2019, making an election under IRC § 6013(g), Election to Treat Nonresident Alien Individual as Resident of the United States. If she does so, she must file as a resident alien in subsequent years.

2020:
Option # 1. If K did not file jointly for 2019 (Option 2, above) she can file as a dual-status alien (Form 1040 with Form 1040NR attached as a schedule), married filing separately, as she became a lawful permanent resident on 05-15-2020.

Option # 2. K can file Form 1040, either separately or jointly with her U.S. citizen spouse.

Example 8

S was a citizen and resident of a foreign country who had never been to the United States prior to his arrival 08-15-2019 as a professor on an H-1b visa. He intends to remain in the United States for two academic years and does not intend to change his immigration status before returning home. Determine his residency starting date.

Solution:
Analysis for 2019

Nonexempt individual (individuals in H-1b status are never exempt individuals)
Date of entry into United States: 08-15-2019
Begin counting days on 08-15-2019
Number of nonexempt days in United States during 2019: 139 days (08-15-2019 through 12-31-2019)

Count days as follows:

Current year (2019) days in United States (139) × 1 = 139 days
Prior year (2018) days in United States (0) × 1/3 = 0 days
Year before that (2017) days in United States (0) × 1/6 = 0 days
Total = 139 days

S does not meet the substantial presence test during 2019.

As another option, S could make the First-Year Choice under IRC § 7701(b)(2)(A) and qualify for a residency starting date of 08-15-2019.  He did not meet either the green card or substantial presence test in the prior year (2018), was present in the United States for at least 31 days in a row in 2019, was present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period (08-15-2019) and ending with the last day of 2019, and met the substantial presence test in the subsequent year (2020). Refer to the Residency Starting Date Under the First-Year Choice section in Residency Starting and Ending Dates.

Analysis for 2020

Nonexempt individual (individuals in H-1b status are never exempt individuals)
Date of entry into United States: 08-15-2019
Begin counting days on 08-15-2019
Number of nonexempt days in United States during 2020: 366 days

Count days as follows:

Current year (2020) days in United States (366) × 1 = 366 days
Prior year (2019) days in United States (139) × 1/3 = 46 1/3 days
Year before that (2018) days in United States (0) × 1/6 = 0 days
Total = 412 days

S meets the substantial presence test on 05-16-2020.  From 2019, 46 days, plus 137 days from 2020 (01-01-2020 through 05-16-2020) = 183 days.

S's residency starting date is 01-01-2020 (the first day he was present in United States during the calendar year in which he met the substantial presence test).

What kind of federal income tax returns will S file for 2019 and 2020?

2019:
Option #1. S will file Form 1040NR as a nonresident alien.

Option #2. S will file a dual-status tax return as a dual-status alien, making the First-Year Choice under IRC § 7701(b)(2)(A) and a residency starting date of 08-15-2019.

2020:
S will file Form 1040 as a resident alien.

Example 9

D was a citizen and resident of a foreign country just prior to her arrival in the United States. She arrived in the United States for the first time ever on 08-15-2013 as a student on an F-1 visa. She remained in F-1 status until she graduated in June 2018. She left the United States on 06-30-2018 and returned home. On 08-01-2019 she returned to the United States as a researcher on a J-1 visa. Determine her residency starting date for her most recent visit.

Solution:
Analysis for 2019

Date of (second) entry into United States: 08-01-2019
Exempt individual: 08-15-2013 through 12-31-2017
Nonexempt individual: 01-01-2018 through 06-30-2018 and 08-01-2019 through 12-31-2019

Begin counting days of presence in the United States on 08-01-2019. Because D is currently a J-1 non-student, apply the 6-year “lookback rule”. Because she had already been an exempt individual as an F-1 student during 2 of the 6 years prior to 2019, she cannot be an exempt individual during 2019 and must start counting days of presence on the date of her arrival in the United States. During her prior visit as an F-1 student, applying the 5-year rule, she ceased to be an exempt individual on 12-31-2017.

Number of nonexempt days in United States during 2019: 153 days (08-01-2019 through 12-31-2019)

Count days as follows:

Current year (2019) days in United States (153) × 1 = 153 days
Prior year (2018) days in United States (181 for 01-01-2018 through 06-30-2018) × 1/3 = 60 1/3 days
Year before that (2017) days in United States (0) × 1/6 = 0 days
Total = 213 days

D meets the substantial presence test on 12-01-2019.  From 2018, 60 1/3 days, plus 123 days from 2019 (08-01-2019 through 12-01-2019) = 183 days.

D's residency start date is 08-01-2019. D had not been present in the United States long enough to establish residency during 2018, nor to qualify for the First-Year Choice under IRC § 7701(b)(2)(A) – she was present in the United States for less than 75% of the days from 01-01-2018, when she was in the United States, to the last day of 2018. Thus, her residency must begin on 08-01-2019, the first day she is present in the United States during the year she meets the substantial presence test.

Analysis for 2020

Date of entry into United States: 08-01-2019
Exempt individual: 08-15-2013 through 12-31-2017 (5 calendar years, 2013 through 2017)
 Nonexempt individual 01-01-2018 through 06-30-2018 and 08-01-2019 through 12-31-2019
Begin counting days of presence in the United States on 08-01-2019
Number of nonexempt days in United States during 2020: 366 days

Count days as follows:

Current year (2020) days in United States (366) × 1 = 366 days
Prior year (2019) days in United States (153) × 1/3 = 51 days
Year before that (2018) days in United States (181) × 1/6 = 30 1/3 days
Total = 447 days

D meets the substantial presence test for 2020.

Since she was a resident alien on 12-31-2019, and has not left the United States, her residency in the United States established in 2019 continues into 2020 with no residency ending date.

What kind of federal income tax returns will D file for 2019 and 2020?

2019:
D is a dual-status alien and will file a dual-status income tax return.

2020:
D will file Form 1040 as a resident alien.

Example 10

M was a citizen and resident of a foreign country who had never been in the United States prior to her arrival 08-15-2017 as a researcher on a J-1 visa. Without leaving the United States, she became a student and changed to F-1 status on 08-10-2019. Determine her residency starting date.

Solution:
Analysis for 2019

Date of entry into United States: 08-15-2017
Exempt individual: 2017 and 2018 (researcher on J-1 visa is an exempt individual for 2 calendar years with a 6-year “lookback rule”)
Nonexempt individual: 01-01-2019 through 08-09-2019
Begin counting days on 01-01-2019. However, days as an exempt individual start again on 08-10-2019. Since M became an F-1 student on 08-10-2019, the 6-year “lookback rule” does not apply to her after that date.

Since M has already been an exempt individual during 2017 and 2018, her status as a student exempt individual can only continue through 2019, 2020, and 2021. As a student in F-1 status, M is an exempt individual for 5 calendar years, 2017 through 2021.

During 2019 her status as an exempt individual begins on 08-10-2019. Therefore, the number of nonexempt days in the United States during 2019 is 221 days.

Number of nonexempt days in United States during 2019: 221 days (01-01-2019 through 08-09-2019)

Count days as follows:

Current year (2019) days in United States (221) × 1 = 221 days
Prior year (2018) days in United States (0) × 1/3 = 0 days
Year before that (2017) days in United States (0) × 1/6 = 0 days
Total = 221 days

M meets the substantial presence test on 07-02-2019 (the 183rd day after 12-31-2018).
M's residency start date is 01-01-2019 (her first day present in the United States during the year she met the substantial presence test).

Under the general rule, the residency ending date under the substantial presence test is December 31st of the year in which M ceases to be present in the United States. However, an exception is allowed for a residency ending date that is earlier than December 31 in an alien's last calendar year in the United States. Refer to Residency Starting and Ending Dates.

The exception allows M’s residency ending date to be the last day during the calendar year that she ceases to be present in the United States if, for the remainder of the calendar year:

  1. her tax home is in a foreign country (Rev. Rul. 93-86); and 
  2. she maintains a closer connection to that foreign country than to the United States (Treas. Reg. § 301.7701(b)-2(d)).

If she qualifies for the exception, M’s residency ending date under the exception to the general rule is 08-09-2019 (the date she ceases to be considered present in the United States, since she became an exempt individual on that date).

However, M does not qualify for the exception to the general rule for determining her residency ending date because, after 08-09-2019, she did not have a tax home in a foreign country, and she did not maintain a closer connection to a foreign country than to the United States.

Since M does not qualify for the exception to the residency ending date general rule, her residency ending date remains 12-31-2019.

Analysis for 2020

Date of entry into United States: 08-15-2017
Exempt individual: 2017 and 2018
Nonexempt individual: 01-01-2019 through 08-09-2019
Number of nonexempt days in United States during 2019: 221 days (01-01-2019 through 08-09-2019)
Number of nonexempt days in United States during 2020: 0 days

Count days as follows:

Current year (2020) days in United States (0) × 1 = 0 days
Prior year (2019) days in United States (221) × 1/3 = 73 2/3 days
Year before that (2018) days in United States (0) × 1/6 = 0 days
Total = 73 days

M does not meet the substantial presence test for 2020.

Summary for M:

2017:
Nonresident Alien

2018:
Nonresident Alien

2019:
Resident Alien

2020:
Nonresident Alien

What kind of federal income tax returns will M file for 2017 through 2020?

2017 and 2018:
M will file Form 1040NR as a nonresident alien each year.

2019:
M will file Form 1040 as a resident alien.

2020:
M will file Form 1040NR as a nonresident alien.

References/Related Topics

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.