An alien’s period of residency in the United States must have an official starting date and ending date. The rules for determining these dates are as follows.
Residency Starting Date Under the Green Card Test
If you meet the green card test at any time during a calendar year, but do not meet the substantial presence test for that year, your residency starting date is the first day in the calendar year on which you are present in the United States as a lawful permanent resident (the date on which the United States Citizenship and Immigration Services (USCIS) has officially approved your petition to become an Immigrant). If you receive your green card abroad, then the residency starting date is your first day of physical presence in the United States after you receive your green card. Section 7701(b)(1)(A)(i) of the Internal Revenue Code allows you to be treated as a resident alien for the entire calendar year if you were a Lawful Permanent Resident of the United States at any time during the calendar year if you have been present in the United States for at least one day during the calendar year.
Residency Starting Date Under the Substantial Presence Test
If you meet the substantial presence test for a calendar year, your residency starting date is generally the first day you are present in the United States during that calendar year.
Residency Starting Date Under the terms of a Tax Treaty
In general, your residency starting date under the terms of a Tax Treaty is the date on which you first satisfy the definition of a resident under the terms of the Tax Treaty. As a general rule, each treaty looks first to the domestic tax law of each country to define residency for that country. If dual residency in two countries results, then most treaties contain "tie-breaker" rules to determine to which country residency pertains.
Residency Ending Date Under The Green Card Test
Your last day of presence in the United States on which you are considered to be a lawful permanent resident of the United States is the residency ending date under the immigration laws of the United States. However, green-card holders who reside outside the United States are still considered to be resident aliens of the United States for tax purposes unless such persons: (1) voluntarily turn in their green cards to USCIS and renounce their U.S. immigrant status; (2) have their immigrant status administratively revoked by USCIS; or (3) have their immigrant status judicially revoked by a United States federal court.
Residency Ending Date Under The Substantial Presence Test
Your last day of presence in the United States followed by a period during which:
- You are not present in the United States,
- You have a closer connection to a foreign country than to the United States, and
- You are not a resident of the United States during the calendar year following that of your last day of presence in the United States.
Under the general rule, the residency ending date is December 31 of the calendar year in which you left the United States. However, an exception is allowed for a residency ending date earlier in the alien's last calendar year in the United States as follows: the alien's residency ending date shall be the last day during the calendar year that the individual is physically present in the United States if, for the remainder of the calendar year:
- the individual's tax home is in a foreign country (cf. Rev. Rul. 93-86); and
- he or she maintains a closer connection to that foreign country than to the United States (cf. Treas. Reg. § 301.7701(b)-2(d)).
Note that when applying these rules an " exempt individual" is not considered to be "present in the United States." This rule may result in situations in which a person who was once a resident under the substantial presence test, and who later becomes an "exempt individual," can subsequently become a nonresident once more without ever having left the United States.
References/Related Topics
Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court.
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