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9 Cards in this Set
- Front
- Back
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An Alien has one of the following statuses: |
1) Resident: Is a US resident for tax pursposes by meeting either the green card test or the substantial presence test 2) Nonresident: Is not a resident of the United States 3) Dual Status: Is both a nonresident and resident alien for the tax year
Placement in the correct category is crucial in determining what income to report and which tax return to file. |
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Resident Status |
An alien may qualify as a US resident for tax purposes by meeting either the green card test or the substantial presence test for the calendar year. Resident aliens generally are taxed on their worldwide income, the same as US citizens. Therefore, resident aliens should use the same tax forms as US Citizens. |
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Green Card test |
an alien is a lawful permament resident of the United States at any tome during the calendar year (holder of a green card) |
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Substatial presence test: |
if the alien does not meet the green card test, but was physically present in the United States for at least 31 days during the prior calendar year and for a total of at least 183 days in the prior and the two preceding calendar years. |
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Nonresident Status |
Nonresident aliens generally must pay tax only on income received from sources within the United States. If the income is connected with conducting a trade or business in the US, the income after allowable deductions is taxed at regular US tax rates. Nonresident aliens must file a Form 1040NR - US Nonresident Alien income tax Return |
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Choice to treat nonresident Spouse as a Resident |
A nonresident alien spouse may choose to be treated as a resident alien if all the following conditions are met: 1) The nonresident alien spouse must be married to a US citizen or resident alien at the end of the tax year 2) both spouses must choose to treat the alien spouse as a resident alien 3) One of the spouses must be a US citizen or resident alien on the last day of the tax year. A statement signed by both spouses must be attached to the joint return for the first tax year for which the choice applies. |
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Once the choice is made, it applies to all later tax years unless one of the following situations occurs: |
1) Revocation be either spouse 2) Death of either spouse 3) Legal separation 4) Inadequate records |
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Dual-status aliens |
an alien may be both a nonresident and resident alien dueing the same tax year. The most common dual-status tax years are the years of arrival and departure. Dual-status aliens are taxed on income from all sources for the part of the year they are resident aliens. They are taxed on the US sources only for the part they are nonresident aliens. Dual status aliens for Form 1040 and mark it "Dual-Status Return" if they are residents on the last day of the year, if not, they filr forn 1040NR and mark it the same way. |
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Undocumented Aliens |
typically, undocumented aliens who meet the substantial presence test are considered resident aliens for tax purposes. |
