Who’s a U.S. resident vs nonresident for tax purposes — visa-by-visa guide

The two tests that decide tax residency: 

For U.S. federal income tax you are an alien (non-citizen) and are classified as either a resident alien or a nonresident alien for a calendar year. You generally become a resident if you meet either:

1. Green Card Test — you were a lawful permanent resident (had an I-551 “green card”) at any time during the year.
   
   

2. Substantial Presence Test (SPT) — you were physically present in the U.S. at least 31 days in the current year and 183 days total using the weighted 3-year formula (current year days + 1/3 prior year + 1/6 second prior year).
   
   

If you meet neither test you are a nonresident for tax purposes. Nonresidents are taxed on U.S.-source income; residents are taxed on worldwide income.

Common visa categories and the exempt individual rules (how long days don’t count toward SPT)

Some nonimmigrant visa holders are “exempt individuals” for purposes of the Substantial Presence Test — days present in the U.S. while an exempt individual do not count toward the SPT. The IRS defines who is exempt and the time limits for each category: 

Note: “Exempt” here means exempt from counting days for SPT only — it does not mean exempt from tax if you have U.S.-source income. Also, prior time in other exempt categories can limit whether you qualify (see J-1 lookback rules). Always check exact IRS definitions and your immigration history. 

When can certain visa holders start filing as a resident?

• Green card holders: If you were a lawful permanent resident at any time in the calendar year, you file as a resident (Form 1040).
  
  

• F-1 / J-1 students & M-1 students: Typically nonresidents for the first 5 calendar years (their days are exempt). Once that student exempt period ends, their days count and they can become residents if they meet SPT in that calendar year — then they'd file Form 1040 as resident for that year (or be dual-status if transition occurs mid-year). File Form 8843 to document exempt status even if no income.
  
  

• J-1 teachers/researchers/trainees: Usually exempt for 2 calendar years (with possible extensions/renewals under narrow rules). After the exempt period, their days count and they can meet SPT in later years and be residents.
  
  

• Diplomats (A/G): Generally exempt while status exists; normally do not become resident while holding exempt diplomatic status.
  
  

Forms you need to know

• Form 1040 — used by resident aliens (report worldwide income).
  
  

• Form 1040-NR — used by nonresident aliens (report U.S.-source income).
  
  

• Form 8843 — Statement for Exempt Individuals — used to explain why days don’t count (common for F/J/M/Q nonresident students/teachers). File even if you had no U.S. income.
  
  

• Form 8840 — Closer Connection Exception Statement — file this if you meet SPT but claim a closer connection to a foreign country and therefore should be treated as a nonresident.
  
  

Special rules & exceptions (short guide)

• First-Year Choice — If you don’t meet SPT or green card test for Year A but do in Year B, under certain conditions you can elect to be treated as a resident for part of Year A (first-year choice). See Pub. 519 for details.
  
  

• Closer Connection Exception — Even if you meet SPT, you may still be treated as a nonresident if you can show you had a closer connection to a foreign country during that year (file Form 8840).
  
  

• Dual-status year — If you change from nonresident to resident (or reverse) during the same year, you may have a dual-status tax year with special filing rules. Pub. 519 explains how to compute tax for each portion of the year.
  
  

Examples: 

• F-1 student in U.S. years 1–5: Exempt years — you must file Form 8843 each year (even without income). After year 5, days start counting; if you meet SPT in year 6, file Form 1040 as resident (or dual-status if transition mid-year).
  
  

• J-1 research scholar present 2020–2021 (2 exempt years), still present in 2022: Exempt for 2020 & 2021; beginning 2022 days generally count and SPT may be met in 2022 making you a resident for tax purposes beginning on the residency start date rules in Pub. 519.

Contact Z-Tax & Accounting today at (214) 699-4790 to discuss and determine your residency situation and file your Tax returns in compliance with IRS and the Applicable US State Taxes based upon your Residency.