Tag Archive for resident alien

Nonresident Alien Vs. Resident Alien: Understanding The Difference

Nonresident Alien Vs. Resident Alien: Understanding The Difference

WHAT IS A NONRESIDENT ALIEN?
A nonresident alien is an individual who does not meet the criteria for being classified as a resident alien for tax purposes in the United States. According to the Internal Revenue Code, nonresident aliens are generally only subject to U.S. income tax on their U.S.-sourced income. For example, if a nonresident alien works in the U.S. for six months and earns income from a U.S. employer, that income would be subject to U.S. income tax.

Nonresident aliens are required to file a tax return if they have U.S.-sourced income and want to claim a refund of any taxes withheld. They may also need to report any income from sources outside the U.S. if it is effectively connected with a U.S. trade or business. Nonresident aliens are not eligible for certain tax deductions and credits that are available to resident aliens and U.S. citizens.


WHAT IS A RESIDENT ALIEN?
A Resident Alien is an individual who meets the substantial presence test, which is based on their physical presence in the United States over a three-year period or meets the Green Card test. This means that they have been present in the U.S. for at least 31 days in the current year and 183 days in total over the past three years.

Resident aliens are treated similarly to U.S. citizens for tax purposes and are required to report their worldwide income on their tax returns. They are eligible for the same tax deductions and credits as U.S. citizens and are fully subject to U.S. income taxes. They may also have certain reporting requirements, such as reporting their foreign bank accounts if the total value exceeds a certain threshold.

Related: FBAR and FATCA: Reporting foreign accounts as US Expat
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Written by | Posted in Non Resident Alien • Resident Alien

Aliens: Non Resident or Resident – What Is Your Status?

Star Trek came much later to Indian television, growing up, I was always a big fan of the science fiction stuff, every Sunday morning my brother & I would be glued to the telly waiting for the next episode of “Star Trek”,not even the tantalizing smell of special Sunday breakfasts would get us to budge from our spots. Many, many re-runs of the Star Wars series and the cult movie, E.T later, when I landed in the United States, I was amused to find out that I was considered an “alien”!

Of course, that was not meant as a “stranger-landing-from-a-space-ship” kind of an alien, but it was more as a sedate, ubiquitous immigrant alien. So let’s get to the mundane type of complicated rules to determine – for income tax purposes- if you are an alien, that is, not an U.S. citizen, there are certain criteria you have to examine. Read More

Written by | Posted in Individual • International • United States