Non-Resident Filing

Tax filing in general has a very strict set of rules. However, those rules could be more complicated for foreign nationals.

Foreign nationals (just like US Nationals) will need a social security number in order to file tax. If a social security number cannot be obtained, form w7 will need to be submitted in order to apply for an ITIN. An ITIN is an Individual Tax Identification Number and it is only used to file income tax returns, it is not a substitute to a social security number and may not be used for employment purposes. Tax filing deadline for foreign nationals with US sourced income is April 15th of the following year (if the 15th falls on a non-business day, the filing deadline will be extended to following business day). If form 4868 (Request for Extension of Time to File) was filed, then the deadline will be extended for 6 months. However, this is only an extension of time to file, not an extension of payment and any tax liability owed will have to be paid together with form 4868. If you are an exempt individual and do not have to file a tax return, you will still need to file form 8843 Statement for Exempt Individuals and Individuals with a Medical Condition.

Before starting your tax return, you will need to determine whether to file a Resident return (1040EZ, 1040A, or 1040) or a Non-Resident Return (1040NR-EZ or 1040NR). This will be determined by two factors, your visa status and the amount of time you have been in the country. Not to be confused with immigration status, your tax status will only be used to determine the way in which you will be taxed.

To be eligible to file a Resident return, you will need to pass either the green card test or the physical presence test. Any foreign national holding a green card files a resident return regardless of the amount of time they have been in the country.

The substantial presence test is a bit more complicated and the time from which you begin to count your days will depend on your visa status. In general, the substantial presence test is determined as follows: For tax purposes, you will be considered a US resident if you have been physically present in the United States for at least 31 days during the current year AND for 183 days during the 3-year period (including the current year and the 2 years before that). You will need to count all the days you were present in the US, 1/3 of the days you were present the year immediately before, and 1/6 of the days you were present 2 years before the current.

As mentioned before, your visa status will in part determine how you will file your return. Individuals on F Visa are considered exempt1 for 5 calendar years. Years exempt do not reset and do not need to be consecutive. After the 5 calendar years, F Visa holders will begin to count presence days to determine if they will continue to file as resident or non resident. J & Q Visa holders are exempt for 2 calendar years and after 2 years will begin to count presence days to determine if they will continue to file as resident or non resident. G Visa holders are exempt from tax on all income from International Organizations, however, they are subject to tax on any US Capital gains if the physical presence test is met. There are other visa types in which an exemption period applies, however, discussing every single one will require an extensive essay and is best discussed with a tax professional in person.

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About The Author

Justine Zhou

Justine Zhou is the CEO of Zhou Agency. She is also a senior CPA and extremely knowledgeable advisor with well-rounded expertise in tax, real estate investment and insurance services.

Justine believes in understanding clients’ needs first and providing tailored consultation to clients’ unique situation. She uses language that the audience can easily understand and is good at incorporating her expertise in both tax & real estate to help real estate investors achieve maximum tax savings.

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Zhou Agency assumes no liability for actions taken in reliance upon the information contained herein.