United States tax residency explained for newcomers

What Is US Tax Residency?

Tax residency determines whether you owe taxes on your worldwide income to the United States. Unlike some countries that only tax money earned within their borders, the US taxes residents on income from everywhere — no matter where you earn it. Understanding this matters because it affects how much you owe and which forms you need to file.

The Substantial Presence Test

The most common way the US determines if you're a tax resident is through the "substantial presence test." This is a simple calculation based on how many days you spend in the country:

• Current year: Count all days you're physically in the US
• Prior year: Count one-third of those days
• Two years before that: Count one-sixth of those days
• Add them up — if the total is 183 days or more, you're generally considered a tax resident

Days include partial days when you arrive or leave. Medical emergencies where you can't leave the country may be exempt, but you must document this carefully.

Green Card Holders and Citizens

If you have a green card (permanent resident status) or US citizenship, you're automatically a tax resident — the substantial presence test doesn't apply. You must file taxes even if you spent the entire year outside the US.

Exceptions and Special Rules

Some people can claim exceptions to being a tax resident even if they meet the substantial presence test:

• Students and trainees on certain visas may qualify for relief if they're temporarily in the country
• People with closer connections to another country can claim they're not a US resident
• Professional athletes competing in the US have special rules

These exceptions require proving your situation meets specific conditions and filing the right forms.

What You Need to Do

If you're determined to be a tax resident, you must:

• File a federal income tax return each year
• Report all worldwide income
• May owe state and local taxes depending on where you live
• Pay self-employment taxes if you're self-employed

Non-residents have different filing requirements and typically only report US-source income.

Getting Professional Help

Tax rules become complicated when you have income from multiple countries, own property, run a business, or have dependents. A tax professional familiar with international taxation can help you understand your specific situation and ensure you're filing correctly.

This is general self-help information, not legal advice. Always verify current rules on the official government website.