Publication 519 |
2000 Tax Year |
Resident Aliens
You are a resident alien of the United States for tax purposes if
you meet either the green card test or the substantial
presence test for the calendar year (January 1-December
31). Even if you do not meet either of these tests, you may be able to
choose to be treated as a U.S. resident for part of the year. See
First-Year Choice under Dual-Status Aliens,
later.
Green Card Test
You are a resident for tax purposes if you are a lawful permanent
resident of the United States at any time during the
calendar year. (However, see Dual-Status Aliens, later.)
This is known as the "green card" test. You are a lawful
permanent resident of the United States at any time if you have been
given the privilege, according to the immigration laws, of residing
permanently in the United States as an immigrant. You generally have
this status if the Immigration and Naturalization Service (INS) has
issued you an alien registration card, also known as a "green card."
You continue to have resident status under this test unless the status
is taken away from you or is administratively or judicially determined
to have been abandoned.
Resident status taken away.
Resident status is considered to have been taken away from you if
the U.S. government issues you a final administrative or judicial
order of exclusion or deportation. A final judicial order
is an order that you may no longer appeal to a higher court of
competent jurisdiction.
Resident status abandoned.
An administrative or judicial determination of abandonment of
resident status may be initiated by you, the INS, or a U.S. consular
officer.
If you initiate the determination, your resident status is
considered to be abandoned when you file either of the following with
the INS or U.S. consular officer:
- Your application for abandonment, or
- Your Alien Registration Receipt Card attached to a letter
stating your intent to abandon your resident status.
You must file the letter by certified mail, return receipt
requested. You must keep a copy of the letter and proof that it was
mailed and received.
If the INS or U.S. consular officer initiates this determination,
your resident status will be considered to be abandoned when the final
administrative order of abandonment is issued. If you are granted an
appeal to a federal court of competent jurisdiction, a final judicial
order is required.
A long-term resident who ceases to be a lawful permanent resident
may be subject to special reporting requirements and tax provisions.
See Expatriation Tax in chapter 4.
Substantial Presence Test
You will be considered a U.S. resident for tax purposes if you meet
the substantial presence test for the calendar year. To meet this
test, you must be physically present in the United States on at least:
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current
year and the 2 years immediately before that, counting:
- All the days you were present in the current year, and
- 1/3 of the days you were present in the first
year before the current year, and
- 1/6 of the days you were present in the second
year before the current year.
Example.
You were physically present in the United States on 120 days in
each of the years 1998, 1999, and 2000. To determine if you meet the
substantial presence test for 2000, count the full 120 days of
presence in 2000, 40 days in 1999 ( 1/3 of 120), and 20
days in 1998 ( 1/6 of 120). Since the total for the 3-year
period is 180 days, you are not considered a resident under the
substantial presence test for 2000.
The term United States includes the following:
- All 50 states and the District of Columbia,
- The territorial waters of the United States, and
- The seabed and subsoil of those submarine areas that are
adjacent to U.S. territorial waters and over which the United States
has exclusive rights under international law to explore and exploit
natural resources.
The term does not include U.S. possessions and territories or
U.S. airspace.
Figure 1-A Nonresident alien or Resident Alien?
Days of Presence
in the United States
You are treated as present in the United States on any day you are
physically present in the country at any time during the day. However,
there are exceptions to this rule. Do not count the following as days
of presence in the United States for the substantial presence test.
- Days you commute to work in the United States from a
residence in Canada or Mexico if you regularly commute from Canada or
Mexico.
- Days you are in the United States for less than 24 hours
when you are in transit between two places outside the United
States.
- Days you are in the United States as a crew member of a
foreign vessel.
- Days you are unable to leave the United States because of a
medical condition that develops while you are in the United
States.
- Days you are an exempt individual.
The specific rules that apply to each of these categories are
discussed next.
Regular commuters from Canada or Mexico.
Do not count the days on which you commute to work in the United
States from your residence in Canada or Mexico if you regularly
commute from Canada or Mexico. You are considered to commute regularly
if you commute to work in the United States on more than 75% of the
workdays during your working period.
For this purpose, "commute" means to travel to work and return
to your residence within a 24-hour period. "Workdays" are the
days on which you work in the United States or Canada or Mexico.
"Working period" means the period beginning with the first day in
the current year on which you are physically present in the United
States to work and ending on the last day in the current year on which
you are physically present in the United States to work. If your work
requires you to be present in the United States only on a seasonal or
cyclical basis, your working period begins on the first day of the
season or cycle on which you are present in the United States to work
and ends on the last day of the season or cycle on which you are
present in the United States to work. You can have more than one
working period in a calendar year, and your working period can begin
in one calendar year and end in the following calendar year.
Example.
Maria Perez lives in Mexico and works for Compania ABC in its
office in Mexico. She was assigned to her firm's office in the United
States from February 1 through June 1. On June 2, she resumed her
employment in Mexico. On 69 days, Maria commuted each morning from her
home in Mexico to work in Compania ABC's U.S. office. She returned to
her home in Mexico on each of those evenings. On 7 days, she worked in
her firm's Mexico office. For purposes of the substantial presence
test, Maria does not count the days she commuted to work in the United
States because those days equal more than 75% of the workdays during
the working period (69 workdays in the United States divided by 76
workdays in the working period equals 90.8%).
Days in transit.
Do not count the days you are in the United States for less than 24
hours and you are in transit between two places outside the United
States. You are considered to be in transit if you engage in
activities that are substantially related to completing travel to your
foreign destination. For example, if you travel between airports in
the United States to change planes en route to your foreign
destination, you are considered to be in transit. However, you are
not considered to be in transit if you attend a business
meeting while in the United States. This is true even if the meeting
is held at the airport.
Crew members.
Do not count the days you are temporarily present in the United
States as a regular crew member of a foreign vessel engaged in
transportation between the United States and a foreign country or a
U.S. possession. However, this exception does not apply if you
otherwise engage in any trade or business in the United States on
those days.
Medical condition.
Do not count the days you intended to leave, but could not leave
the United States because of a medical condition or problem that
developed while you were in the United States. Whether you intended to
leave the United States on a particular day is determined based on all
the facts and circumstances. For example, you may be able to establish
that you intended to leave if your purpose for visiting the United
States could be accomplished during a period that is not long enough
to qualify you for the substantial presence test. However, if you need
an extended period of time to accomplish the purpose of your visit and
that period would qualify you for the substantial presence test, you
would not be able to establish an intent to leave the United States
before the end of that extended period.
In the case of an individual who is judged mentally incompetent,
proof of intent to leave the United States can be determined by
analyzing the individual's pattern of behavior before he or she was
judged mentally incompetent.
If you qualify to exclude days of presence because of a medical
condition, you must file a fully completed Form 8843 with the IRS. See
Form 8843, later.
You cannot exclude any days of presence in the United States under
the following circumstances.
- You were initially prevented from leaving, were then able to
leave, but remained in the United States beyond a reasonable period
for making arrangements to leave.
- You returned to the United States for treatment of a medical
condition that developed during a prior stay.
- The condition existed before your arrival in the United
States and you were aware of the condition. It does not matter whether
you needed treatment for the condition when you entered the United
States.
Exempt individual.
Do not count days for which you are an exempt individual. The term
"exempt individual" does not refer to someone exempt from U.S.
tax, but to anyone in the following categories.
- An individual temporarily present in the United States as a
foreign government-related individual.
- A teacher or trainee temporarily present in the United
States under a "J" or "Q" visa, who substantially complies
with the requirements of the visa.
- A student temporarily present in the United States under an
"F," "J," "M," or "Q" visa, who substantially
complies with the requirements of the visa.
- A professional athlete temporarily in the United States to
compete in a charitable sports event.
The specific rules for each of these four categories are discussed
next.
Foreign government-related individuals.
A foreign government-related individual is an individual (or a
member of the individual's immediate family) who is temporarily
present in the United States:
- As a full-time employee of an international organization,
- By reason of diplomatic status, or
- By reason of a visa (other than a visa that grants lawful
permanent residence) that the Secretary of the Treasury determines
represents full-time diplomatic or consular status.
An international organization is any public
international organization that the President of the United States has
designated by Executive Order as being entitled to the privileges,
exemptions, and immunities provided for in the International
Organizations Act. An individual is a full-time employee if his or her
work schedule meets the organization's standard full-time work
schedule.
An individual is considered to have full-time diplomatic or
consular status if he or she:
- Has been accredited by a foreign government that is
recognized by the United States,
- Intends to engage primarily in official activities for that
foreign government while in the United States, and
- Has been recognized by the President, Secretary of State, or
a consular officer as being entitled to that status.
Members of the immediate family include the individual's
spouse and unmarried children (whether by blood or adoption) but only
if the spouse's or unmarried children's visa statuses are derived from
and dependent on the exempt individual's visa classification.
Unmarried children are included only if they:
- Are under 21 years of age,
- Reside regularly in the exempt individual's household, and
- Are not members of another household.
The immediate family of an exempt individual does not
include attendants, servants, or personal employees.
Teachers and trainees.
A teacher or trainee is an individual, other than a student, who is
temporarily in the United States under a "J" or "Q" visa and
substantially complies with the requirements of that visa. You are
considered to have substantially complied with the visa requirements
if you have not engaged in activities that are prohibited by U.S.
immigration laws and could result in the loss of your visa status.
Also included are immediate family members of exempt teachers and
trainees. See the definition of immediate family, earlier, under
Foreign government-related individuals.
You will not be an exempt individual as a teacher or
trainee if you were exempt as a teacher, trainee, or student for any
part of 2 of the 6 preceding calendar years. However, you will be
an exempt individual if you were exempt as a teacher, trainee,
or student for any part of 3 (or fewer) of the 6 preceding calendar
years and:
- A foreign employer paid all of your compensation during the
current year, and
- A foreign employer paid all of your compensation during each
of the preceding 6 years you were present in the United States as a
teacher or trainee.
A foreign employer includes an office or place of business of
an American entity in a foreign country or a U.S. possession.
If you qualify to exclude days of presence as a teacher or trainee,
you must file a fully completed Form 8843 with the IRS. See Form
8843, later.
Example.
Carla was temporarily in the United States during the year as a
teacher on a "J" visa. Her compensation for the year was paid by
a foreign employer. Carla was treated as an exempt teacher for the
past 2 years but her compensation was not paid by a foreign employer.
She will not be considered an exempt individual for the current year
because she was exempt as a teacher for at least 2 of the past 6
years.
If her compensation for the past 2 years had been paid by a foreign
employer, she would be an exempt individual for the current year.
Students.
A student is any individual who is temporarily in the United States
on an "F," "J," "M," or "Q" visa and who
substantially complies with the requirements of that visa. You are
considered to have substantially complied with the visa requirements
if you have not engaged in activities that are prohibited by U.S.
immigration laws and could result in the loss of your visa status.
Also included are immediate family members of exempt students. See
the definition of immediate family, earlier, under Foreign
government-related individuals.
You will not be an exempt individual as a student if you have been
exempt as a teacher, trainee, or student for any part of more than 5
calendar years unless you establish to the satisfaction of the IRS
Field Assistance Area Director that you do not intend to reside
permanently in the United States and you have substantially complied
with the requirements of your visa. The facts and circumstances to be
considered in determining if you have demonstrated an intent to reside
permanently in the United States include, but are not limited to:
- Whether you have maintained a closer connection to a foreign
country (discussed later), and
- Whether you have taken affirmative steps to change your
status from nonimmigrant to lawful permanent resident as discussed,
later, under Closer Connection to a Foreign Country.
If you qualify to exclude days of presence as a student, you must
file a fully completed Form 8843 with the IRS. See Form
8843, later.
Professional athletes.
A professional athlete who is temporarily in the United States to
compete in a charitable sports event is an exempt individual. A
charitable sports event is one that meets the following conditions:
- The main purpose is to benefit a qualified charitable
organization,
- The entire net proceeds go to charity, and
- Volunteers perform substantially all the work.
In figuring the days of presence in the United States, you can
exclude only the days on which you actually competed in a sports
event. You cannot exclude the days on which you were in the United
States to practice for the event, to perform promotional or other
activities related to the event, or to travel between events.
If you qualify to exclude days of presence as a professional
athlete, you must file a fully completed Form 8843 with the IRS. See
Form 8843, next.
Form 8843.
If you exclude days of presence in the United States because you
fall into any of the following categories, you must file a fully
completed Form 8843.
- You were unable to leave the United States as planned
because of a medical condition.
- You were temporarily in the United States as a teacher or
trainee on a "J" or "Q" visa.
- You were temporarily in the United States as a student on an
"F," "J," "M," or "Q" visa.
- You were a professional athlete competing in a charitable
sports event.
Attach Form 8843 to your 2000 income tax return. If you do not have
to file a return, send Form 8843 to the Internal Revenue Service
Center, Philadelphia, PA 19255, by the due date for filing an income
tax return. The due date for filing is discussed in chapter 7.
If you do not timely file Form 8843, you cannot exclude the days
you were present in the United States as a professional athlete or
because of a medical condition that arose while you were in the United
States. This does not apply if you can show by clear and convincing
evidence that you took reasonable actions to become aware of the
filing requirements and significant steps to comply with those
requirements.
Closer Connection
to a Foreign Country
Even if you meet the substantial presence test, you can be treated
as a nonresident alien if you:
- Are present in the United States for less than 183 days
during the year,
- Maintain a tax home in a foreign country during the year,
and
- Have a closer connection during the year to one foreign
country in which you have a tax home than to the United States (unless
you have a closer connection to two foreign countries,
discussed next).
Closer connection to two foreign countries.
You can demonstrate that you have a closer connection to two
foreign countries (but not more than two) if you meet all of the
following conditions:
- You maintained a tax home beginning on the first day of the
year in one foreign country,
- You changed your tax home during the year to a second
foreign country,
- You continued to maintain your tax home in the second
foreign country for the rest of the year,
- You had a closer connection to each foreign country than to
the United States for the period during which you maintained a tax
home in that foreign country, and
- You are subject to tax as a resident under the tax laws of
either foreign country for the entire year or subject to tax as a
resident in both foreign countries for the period during which you
maintained a tax home in each foreign country.
Tax home.
Your tax home is the general area of your main place of business,
employment, or post of duty, regardless of where you maintain your
family home. Your tax home is the place where you permanently or
indefinitely work as an employee or a self-employed individual. If you
do not have a regular or main place of business because of the nature
of your work, then your tax home is the place where you regularly
live. If you do not fit either of these categories, you are considered
an itinerant and your tax home is wherever you work.
For determining whether you have a closer connection to a foreign
country, your tax home must also be in existence for the entire
current year, and must be located in the same foreign country for
which you are claiming to have a closer connection.
Foreign country.
In determining whether you have a closer connection to a foreign
country, the term "foreign country" means:
- Any territory under the sovereignty of the United Nations or
a government other than that of the United States,
- The territorial waters of the foreign country (determined
under U.S. law),
- The seabed and subsoil of those submarine areas which are
adjacent to the territorial waters of the foreign country and over
which the foreign country has exclusive rights under international law
to explore and exploit natural resources, and
- Possessions and territories of the United States.
Establishing a closer connection.
You will be considered to have a closer connection to a foreign
country than the United States if you or the IRS establishes that you
have maintained more significant contacts with the foreign country
than with the United States. In determining whether you have
maintained more significant contacts with the foreign country than
with the United States, the facts and circumstances to be considered
include, but are not limited to, the following.
- The country of residence you designate on forms and
documents.
- The types of official forms and documents you file, such as
Form W-9, Form W-8BEN, or Form W-8ECI.
- The location of:
- Your permanent home,
- Your family,
- Your personal belongings, such as cars, furniture, clothing,
and jewelry,
- Your current social, political, cultural, or religious
affiliations,
- Your business activities (other than those that constitute
your tax home),
- The jurisdiction in which you hold a driver's license, and
- The jurisdiction in which you vote.
It does not matter whether your permanent home is a house, an
apartment, or a furnished room. It also does not matter whether you
rent or own it. It is important, however, that your home be available
at all times, continuously, and not solely for short stays.
You cannot claim you have a closer connection to a foreign country
if either of the following applies:
- You personally applied, or took other steps during the year,
to change your status to that of a permanent resident, or
- You had an application pending for adjustment of status
during the current year.
Steps to change your status to that of a permanent resident
include, but are not limited to, the filing of the following forms.
- Form I-508, Waiver of Rights, Privileges,
Exemptions and Immunities
- Form I-485, Application to Register Permanent
Residence or Adjust Status
- Form I-130, Petition for Alien Relative, on
your behalf
- Form I-140, Immigrant Petition for Alien Worker,
on your behalf
- Form ETA-750, Application for Alien Employment
Certification, on your behalf
- Form OF-230, Application for Immigrant Visa and
Alien Registration
Form 8840.
You must attach a fully completed Form 8840 to your income tax
return to claim you have a closer connection to a foreign country or
countries.
If you do not have to file a return, send the form to the Internal
Revenue Service Center, Philadelphia, PA 19255, by the due date for
filing an income tax return. The due date for filing is discussed
later in chapter 7.
If you do not timely file Form 8840, you cannot claim a closer
connection to a foreign country or countries. This does not apply if
you can show by clear and convincing evidence that you took reasonable
actions to become aware of the filing requirements and significant
steps to comply with those requirements.
Effect of Tax Treaties
The rules given here to determine if you are a U.S. resident do not
override tax treaty definitions of residency. If your residency is
determined under a treaty and not under the rules discussed here, you
must file a fully completed Form 8833 if the payments or income items
reportable because of that determination are more than $100,000. If
you are a dual resident taxpayer, you can still claim the benefits
under an income tax treaty. A dual resident taxpayer is one
who is a resident of both the United States and another country under
each country's tax laws. The income tax treaty between the two
countries must contain a provision that provides for resolution of
conflicting claims of residence. If you are treated as a resident of a
foreign country under a tax treaty, you are treated as a nonresident
alien in figuring your U.S. income tax. For purposes other than
figuring your tax, you will be treated as a U.S. resident. For
example, the rules discussed here do not affect your residency time
periods as discussed, later, under Dual-Status Aliens.
Information to be reported.
If you are a dual resident taxpayer and you claim treaty benefits,
you must timely file a return (including extensions) using Form 1040NR
or Form 1040NR-EZ, and compute your tax as a nonresident alien.
You must also attach a fully completed Form 8833. See Reporting
Treaty Benefits Claimed in chapter 9
for more information on
reporting treaty benefits.
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