Keyword: Substantial Presence Test
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
13.3 Aliens and U.S. Citizens Living Abroad: Foreign Income & Foreign Income Exclusion
Do I have to meet the 330-day presence test or have a valid working
resident visa to meet the requirement for foreign income exclusion?
To claim the foreign earned income exclusion, the foreign housing exclusion,
or the foreign housing deduction, you must have foreign earned income, your
tax home must be in a foreign country, and you must be one of the following:
A U.S. citizen who is a bona fide resident of a foreign country or countries
for an uninterrupted period that includes an entire tax year,
A U.S. resident alien who is a citizen or national of a country with which
the United States has an income tax treaty with a nondiscrimination article
in effect and who is a bona fide resident of a foreign country or countries
for an uninterrupted period that includes an entire tax year, or
A U.S. citizen or a U.S. resident alien who is physically present in
a foreign country or countries for at least 330 full days during any period
of 12 consecutive months.
U.S. tax law does not specifically require a foreign resident visa or work
visa for this purpose, but you (must/should) comply with the other country's
laws.
References:
I am a nonresident alien. Can I take the foreign earned income exclusion
if I meet the bona fide resident test or physical presence test? If yes, what
is the tax form used for nonresident taxpayer?
No, nonresident aliens do not qualify for the foreign earned income exclusion.
Only if you are a U.S. citizen or a resident alien of the United States and
live abroad, may you qualify to exclude up to $80,000 of your foreign earned
income for 2003. But, if you are the nonresident alien spouse of a U.S. citizen
or resident alien, you can elect to be treated as a U.S. resident in order
to file a joint return. In this case, you can take the foreign earned income
exclusion if otherwise qualified. Refer to Publication 519 , U.S.
Tax Guide for Aliens , for detailed instructions on how to make this
election.
However, nonresident aliens would be able to exclude their foreign earned
income under the dual-status rules. Refer to Tax Topic 852 for dual-status
information. A nonresident alien is generally not subject to U.S. tax on compensation
for services performed outside the U.S.
References:
13.4 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - General
I am a foreign national and came to this country on June 30th of
last year. I have a H-1 visa. What is my tax status regarding residency nonresident
alien, or resident alien?
You were a dual status alien last year. As an H-1 visa holder in the U.S.
for 183 days or more, you likely became a resident, for tax purposes, as of
June 30th. For the part of the year you are a resident alien, you are taxed
on income from all sources.
For the part of the year that you are not a resident alien, you are not
taxed on income from sources outside the United States, unless the income
is effectively connected with a trade or business in the United States.
Income from U.S. sources is taxable whether you receive it while a nonresident
alien or a resident alien unless specifically exempt under the Internal Revenue
Code or a tax treaty provision. Generally, tax treaty provisions apply only
to the part of the year you were a nonresident and only if you are a resident
for treaty purposes of a country that has a treaty with the United States.
For that part of the year that you are a nonresident, file Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. For that
part of the year you are a resident, file Form 1040 (PDF) .
Refer to Tax Topic 852 for dual-status information.
References:
I have an H-1 visa and my husband has an F-1 visa. We both lived
in the United States all last year and had income. What kind of form should
we file? Do we file our taxes separately or jointly?
You will have met the substantial presence test and will be taxed as a
resident alien for last year, while your husband is likely to be a nonresident
alien. Refer to Tax Topic 851 for an explanation of the relevant tax
forms. You may file a joint tax return if your husband makes the choice to
be treated as a resident for the entire year. Generally, however, you cannot
claim tax treaty benefits as a resident alien. Please refer to Publication 519, U.S.
Tax Guide for Aliens , for detailed instructions on making this choice.
References:
I was an international student (F-1 visa) until October 1, then
my visa status was changed to H-1. Should I file my income tax return as a
dual status or nonresident alien?
Assuming you were not in the U.S. on your F-1 student visa for over 5 years,
you may file as a nonresident for the entire year or, if you qualify under
the first year choice, you may file as a dual status alien. Please refer to Publication 519, U.S. Tax Guide for Aliens, for additional information.
References:
13.5 Aliens and U.S. Citizens Living Abroad: Nonresident Alien - Tax Withholding
I entered the U.S. in August and I have a J-2 visa with an Employment
Authorization (work permit). Can I be considered as a U.S. resident for tax
purposes under the substantial presence test? Since my visa does not allow
me to stay in this country am I subjected to social security tax and Medicare
tax?
You will be considered a U.S. resident for tax purposes if you meet the
substantial presence test for the calendar year. As an exempt individual,
a J-2 visa holder will not initially meet this test.
For purposes of the substantial presence test, certain days of physical
presence do not count, such as the days during which you were an exempt individual
. Please refer to Publication 519, U.S. Tax Guide for Aliens , for
a detailed explanation of this issue.
In general, U.S. social security and Medicare taxes apply to payments of
wages for services performed as an employee in the United States, regardless
of the citizenship or residence of either the employee or the employer. In
limited situations, these taxes apply to wages for services performed outside
the United States. This exception does not apply to a derivative visa holder.
References:
Under my visa as a temporary nonresident alien, I'm not subject
to social security and Medicare withholding. My employer withheld the taxes
from my pay. What should I do to get a refund of my social security and Medicare?
If social security tax and Medicare were withheld in error from pay received
which was not subject to the taxes, you must first contact the employer who
withheld the taxes for reimbursement. If you are unable to get a refund from
the employer, file a claim for refund with the Internal Revenue Service on Form 843 (PDF), Claim for Refund and Request for Abatement.
You must attach the following to your claim:
a copy of your Form W-2 (PDF) , Wage
and Tax Statement, to prove the amount of tax withheld;
Form I-797, INS Approval Notice, is needed if you have changed
your status from F-1 or J-1 to another status prior to filing the claim;
if your visa status changed during the tax year you should attach copies
of the pay stubs that cover the period of exemption from social security taxes;
a copy of INS Form I-94, Arrival/Departure Record, if you are still in
the United States;
a copy of your valid entry visa;
Form 8316, Information Regarding Request for Refund of Social Security
Tax , or a signed statement stating that you have requested a refund
from the employer and have not been able to obtain one; and
a copy of Form 1040NR (PDF) , US Nonresident
Alien Income Tax Return (or Form 1040NR-EZ (PDF)),
for tax the year in question. Processing of your claim may be delayed if you
submit it less than six weeks after you filed Form 1040NR or 1040NR-EZ.
In addition to the documentation listed above foreign student visa holders
should also attach the following:
a copy of Form I-20, Certificate of Eligibility, endorsed by your student
advisor and stamped by the Bureau of Citizenship and Immigration Services;
and
a copy of the Employment Authorization Document of your Optional Practical
Training (e.g., Form I-766, I-538 or 688B).
if you are an exchange visitor, attach a copy of Form IAP-66 or DS-2019
to your claim.
File the claim, with attachments, with the IRS where the employer's returns
were filed. If you do not know where the employer's returns were filed, send
your claim to the Internal Revenue Service Center, Philadelphia, PA 19255.
For more information, refer to Publication 519, U.S. Tax Guide
for Aliens .
References:
I am a U.K. resident and I need to recover withholding tax on a
U.S. capital gain. Do I need an ITIN?
To claim a refund of U.S. tax withheld you need to file Form 1040NR (PDF) , U.S. Nonresident Alien Income Tax Return . Therefore,
you need to secure an Individual Taxpayer Identification Number, or ITIN.
To secure an ITIN, you must file Form W-7 (PDF), Application
for IRS Individual Taxpayer Identification Number . For detailed information
on applying for an ITIN, go to Tax Topic 857 , Individual Taxpayer
Identification Number - W-7
References:
- Publication 515, Withholding of Tax on Nonresident
Aliens and Foreign Corporations
- Publication 519, U.S. Tax Guide for Aliens
- Publication 1915 (PDF), Understanding Your IRS
Individual Taxpayer Identification Number
- Form W-7 (PDF), Application for
IRS Individual Taxpayer Identification Number
- Tax Topic 857, Individual Taxpayer Identification
Number - Form W-7
- Form 1040NR (PDF) , U.S, Nonresident
Alien Income Tax Return
- Tax Topic 857 , Individual Taxpayer Identification
Number - Form W-7
Tax Topics & FAQs | 2003 Tax Year Archives | Tax Help Archives | Home
|
