Taxation For Non-resident Aliens (1040NR)

Non-Resident Alien – Substantial Presence Test (SPT) & Greencard Test (GC) - Explained


Who is an Alien for the US Tax Filing Purpose?

An alien is an individual who is not a U.S. citizen or U.S. national. An alien is a foreign person/foreign national individual who has not passed the Substantial Present Test [SPT] or the Green card test.


What is a Substantial Presence Test (SPT)?

If the Foreign National (Non-US Person) you are considered to hit the SPT physically present test in the United States (U.S.) if these days add up as noted on (a) and (b) listed below:


a) 31 days during the current year, and

b) 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:


Example for Substantial Present Test days in the USA:

If a Non-US Person/Foreign National is physically present in the U.S. on 140 days in each of the years 2018, 2019, and 2020.


To determine if you meet the substantial presence test for 2020,

  1. Add the full 140 days of presence in 2020,

  2. 47 days in 2019 (1/3 of 140),

  3. and 23 days in 2018 (1/6 of 140).

Since the total for the 3-year period is 210 days[exceeds 183 days], The individual foreign person in this example is considered a resident of the United States and needs to file a US tax return if the individual meets the substantial presence test for 2020.


What is a Green Card (GC) Test?

Foreign Nationals or Non-US Citizens who hold a Green card are considered as if they are a resident of the United States even if they are currently living outside of United States with the valid or expired Green Card and for U.S. federal tax purposes, the Green Card holders are treated as a lawful permanent resident of the United States at any time during the calendar year. This is known as the "green card" test.


Non-US citizens/Foreign Nationals are treated as lawful permanent residents of the United States, at any time, if they 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 U.S. Citizenship and Immigration Services (USCIS) issued you an alien registration card, Form I-551, also known as a "green card."


Individuals who have been given a Green Card continue to have U.S. resident status, under this test, unless:

  • The Foreign Person voluntarily renounce and abandon this status in writing to the USCIS,

  • The Foreign Persons immigrant status is administratively terminated by the USCIS, or

  • The Foreign person’s immigrant status is judicially terminated by a U.S. federal court.

Note: Do not assume if your Green Card is expired, then you do not have a US tax filing obligation. Until you renounce it you are required to report your worldwide income to the US Federal tax department.


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