Tax Residency Status
Before you begin your tax return preparation, you will need to determine your tax residency status as Non-Resident Alien or Resident Alien for tax purposes. You may also be a Dual Status Alien if you were both a resident alien and a nonresident alien during the same tax year. Different rules apply for the part of the year you are a resident alien and the part of the year you are a nonresident alien.
Non-resident alien, resident alien, and dual status alien are tax terms, not immigration terms. If you do not know your tax residency status, you can check the information on the IRS website and IRS Publication 519, the U.S. Tax Guide for Aliens. The Sprintax Tax Prep software can also help you determine your status.
Your tax residency status for federal income tax purposes will depend on your immigration status and U.S. presence over a three-calendar-year period. In general, a nonimmigrant is considered a Resident Alien if he or she has been physically present in the U.S. for 183 days or more, based on a formula unless an exception applies. Most students and scholars will meet one of the exceptions for at least part of their stay.
Determining Residency Status for Federal Income Tax Purposes
Resident aliens are taxed in the same manner as U.S. citizens. They are taxed on their worldwide income and required to report ownership of certain foreign financial assets; they are allowed the same deductions and credits as U.S. citizens; and they may file a joint tax return if they are married.
Non-resident aliens are subject to different rules. They are taxed only on income that they receive from sources within the U.S.; they have limited deductions and credits; and they cannot file a joint tax return with their spouse. They are required to file a different U.S. income tax return, either Form 1040NR or Form 1040NR-EZ.
Generally, F-1 students are exempt from counting days of U.S. presence for a period of five years over their lifetime, and J-1 scholars are exempt from counting days of US presence for every 2 out of 6 years. See IRS Publication 519 for more information.