Dual Status Aliens - Residency Status

• Dual Status Aliens determine their residency status under both the Internal Revenue Code and tax treaties. If an individual changes status during the current year from a nonresident alien to a resident alien or from a resident alien or from a resident alien to a nonresident alien, he or she is a Dual Status Alien and must file a special tax return called a Dual Status Return described in IRS Publication 519.
• If the individual is a Nonresident Alien who will become a Resident Alien under the Substantial Presence test in the year following this taxable year, he or she may elect to be treated as a Dual Status Alien for this taxable year and a Resident Alien for the next taxable year if he or she meets certain tests.
• Resident alien taxes - As a legal U.S. resident, you're subject to the same tax rules a U.S. citizens. This means that you must report all income you earn on annual tax returns, regardless of which country in which you earn it.
• Nonresident alien taxes - A nonresident must also pay income taxes to the IRS but only on the income that's effectively connected to the U.S., which generally includes the money you earn while in the U.S. The IRS, however, has no authority to impose tax on the income that nonresidents earn in their home countries or in any foreign country for that matter. You will only report amounts that are considered US-source income. Just like resident aliens and U.S. citizens, there are deductions and credits you can claim to reduce your taxable income.
• In a Dual Status Aliens status you can choose to be treated as a U.S. resident for part of the year. To make this choice you must:
• Be present in the United States for at least 31 days in a row in the last year, and;
• Be present in the United States for at least 75% of the number of days beginning with the first day of the 31-day period and ending with the last day of the last year. For purposes of this 75% requirement, you can treat up to 5 days of absence from the United States as days of presence in the United States.