Topic Summary

This topic discussed residency status of foreign students and scholars for filing U.S. taxes.

Aliens are considered residents for tax purposes if they hold a green card at any time during the calendar year. Nonresident aliens meet the substantial presence test if they were present in the U.S. more than 183 days. Dual status aliens are resident aliens and nonresident aliens at different times in the same tax year.

Exemptions from counting days toward the substantial presence are granted for:

• Students
• Teachers or trainees
• Individuals who can show a closer connection to a home country

For taxpayers who meet the 183-day substantial presence test, the start date of residency for tax purposes is the first day the person was in the U.S. in the tax year in which the substantial presence test was met.

Nonresident aliens may be treated as residents for tax purposes if they make an election to be treated as a resident alien when filing jointly with their spouse who is a U.S. citizen or resident. The election continues until formally revoked.

Also, nonresident students from Barbados and Jamaica, as well as trainees from Jamaica, may qualify for an election to be treated as U.S. residents for tax purposes under their tax treaty provisions with the U.S. A formal, signed, election statement must be attached to Form 1040 (Out of Scope). The election continues until formally revoked.

Rev. Proc. 2020-20 provides for exceptions to the physical presence test for those impacted by COVID-19.