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Are you a resident of the United States for tax purposes?

Are you a resident of the United States for tax purposes?

Table of content

Many of our clients ask us if the type of VISA is related to the way they pay taxes within the United States as foreigners and the answer is no. To declare as an American resident, you must compulsorily meet the following:

1. Possess a citizenship card (Green Card) to be a permanent resident. 

2. Comply with the 183-day rule. (Tax residence)

Now, how the 183-day rule works:

a) Add the days you were present in the US during the fiscal year. (Example: 50 days).

b) Add a third of the days of the previous year in which you were present in the US (Example: 60 days/3 = 20 days).

c) Add the sixth part of the days of the second previous year in which you were present in the US (Example: 60 days/6= 10 days).

d) If the sum of these 3 years equals or exceeds 183 days, you are an American tax resident within the US, even if you are not a resident for immigration matters. This means that a foreign person with a tourist visa can be considered an American tax resident, as long as they meet the above premises.

Important: Arrival and departure days must be counted as full days.

According to the example raised in the previous premises:

Current fiscal year: 50 days.

Previous fiscal year: 20 days.

Second previous fiscal year: 10 days.

Total days: 80 days

Consequently, this person would not be a US Tax Resident because the sum of the days spent within the territory in the last 3 years is less than 183 days.

Additional information to take into consideration:

1. The taxpayer must be present for at least 31 days within the calendar year object of the computation and additionally comply with what is mentioned in previous paragraphs. 

2. There are exceptions for people: In transit, who have medical conditions that prevent them from traveling, studentsonsular staff, and others.

Visit the IRS website for more information.

Jhoan Landaez
CFO Prodezk

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