Non-Resident Alien Lawyers

In general, under federal tax laws an alien refers to a person who is not a U.S. citizen or U.S. national but is living and working in the country. There are two categories of aliens, both resident and nonresident. Students and teachers are viewed as nonresident aliens most of the time, unless they have been here for a set amount of years.

However, this is not always the case and these are not the only individuals that can qualify as nonresident aliens. There are rules and laws that set forth requirements to determine residency status for aliens, which will be discussed further below.

Whether someone is a resident or nonresident alien will determine whether they have to pay taxes on all of their income for a given year or just on the income that resulted from work performed within the U.S. borders. Nonresident aliens are only responsible for the latter obligation.

If you are a citizen of another country earning income in the U.S., it is important to understand when you are considered a nonresident alien so you will not unnecessarily pay taxes on income earned from a source outside of the country. If you fail to file your taxes correctly, serious penalties could follow so learning the basic principles is crucial. Besides taxes, nonresident aliens also do not enjoy certain rights that resident aliens have. Nonresident aliens should become familiar with any other legal rights that are limited to avoid consequences in these areas as well.

How Does the U.S. Determine Alien Residency Status?

A resident alien needs to meet one of two tests that pertains to that person’s living status within the U.S. during the calendar year. Otherwise, the person is considered to be a nonresident alien. These two tests are:

• Green Card Test: If you are a green card holder at any point during the calendar year, then your resident alien status is automatic. A green card gives immigrants the privilege of permanently residing in the U.S. and is also referred to as a permanent visa or alien registration card.
• Substantial Presence Test: This test looks at a person’s physical presence within the U.S. during the calendar year. This needs to have occurred at least 31 days the current year and 183 days in the past three years.
  • For the second requirement, calculations can become quite tricky. The current year is included as one of the three years that the government will analyze, and all days you were physically present that year will count. For the other two years before that, only one-third of the days looking two years back will count towards the total and one-sixth of the days looking three years back will count towards the total.
  • There are also some potential exemptions where days do not count, like if you are only present in the U.S. as a professional athlete intending to live there temporarily for a charitable sport competition.

If one of these tests is not met, then you will be considered to be a nonresident alien for tax purposes. However, there are some situations where individuals can override these tests, like the first year choice to be treated as a resident or nonresident spouses electing to be treated as a resident. You will need to see if all the requirements are met for your specific situation in order to take advantage of these elections.

On the other side of things, a person who qualifies as a resident alien under the substantial presence test but also meets the elements establishing “closer connection to a foreign country” can be treated as a nonresident alien for tax purposes. Tax treaties with other nations also affect alien residency status.

Keep in mind that there are also rules around residency start and end dates. One interesting rule is that if someone obtains a green card but does not also meet the substantial presence test, then the first day of residency will not be until that person is actually physically present in the country.

Lastly, an individual’s residence status can be changed or terminated in certain instances. This includes when a person abandons their status by voluntarily moving to another different country or fails to renew their visa status. Other immigration procedures like removal from the U.S. for a legal reason can also terminate residence status.

What Tax Consequences Can Aliens Face for Filing Taxes Incorrectly?

If you or a relative are considered to be an alien living in the U.S., it is very important to closely monitor the days you are physically present in the country and any other factors that impact residency determination. Incorrectly filing taxes can carry a variety of legal consequences. This includes the following:

• Tax amendments;
• Owing additional money to the Internal Revenue Service;
• Fines;
• Criminal charges;
• Affected visa status; and/or
• Roadblocks to becoming a permanent resident or gaining citizenship in the future.

To avoid these tax issues, make sure that you are filing correctly as a resident or nonresident alien. Also remember that resident aliens have to report income made outside of the U.S. and nonresident aliens will not be required to do this. Nonresident aliens will be subject to different tax rates and use different forms, so it is important to make sure you are actually considered a nonresident alien when completing your taxes. If you incorrectly use the wrong forms, you can face some of the consequences listed above.

Another important thing to be aware of is how the tax laws treat nonresident aliens making a gift to another person. If a nonresident alien gives a gift of tangible property located in the U.S. to someone else, they will have to pay a gift tax when the gift exceeds a certain amount. However, gifts given from a nonresident alien to their spouse who is a U.S. citizen will not have to pay a gift tax. If their spouse is also a nonresident alien, there will also be a gift tax imposed when it reaches past the exclusion amount.

What Other Legal Rights are Limited for Nonresident Aliens?

As noted above, besides tax filings the law treats nonresident aliens different in other areas as well. For example, nonresident aliens do not have the right to vote in any U.S. elections. While resident aliens are not allowed to vote in federal elections, some state and local laws will allow green card holders to vote in their state and local elections. You will need to check relevant laws to determine if your state, city, village, or township allows for this privilege.

However, both resident and nonresident aliens must remember that voting in a federal election can result in serious consequences like deportation. Only actual citizens of the U.S. can vote in these elections.

Do I Need to Hire a Lawyer for Issues Involving Alien Status?

Residency laws involving non-citizens are very important and often complicated. As noted above, filing taxes under the wrong status can have serious legal consequences. This is why it is crucial to become educated on the applicable laws and make sure your resident status is represented correctly.

Hiring an immigration lawyer to help with taxes and other matters where the distinction between resident and nonresident status would be very helpful. A lawyer can review your residency and determine the correct status, help you file taxes, advise you on important legal decisions, and represent you in court if necessary to resolve any issues that arise in the future.